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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: ways we can up our game for this critical election.

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Speaker 1: We rely on our premium subs to expand coverage, upgrade

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Speaker 1: the studio ad staff, give you, guys, the best independent

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Speaker 1: coverage that is possible. If you like what we're all about,

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Speaker 1: it just means the absolute world to have your support.

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Speaker 1: But enough with that, Let's get to the show. Good morning, everybody,

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Speaker 1: Happy Tuesday. We have an amazing show for everybody today.

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Speaker 1: What do we have, Crystal, Indeed, we do a lot

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Speaker 1: of big stories breaking this morning, a horrific mass shooting

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Speaker 1: at a Christian school outside of Nashville. We will bring

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Speaker 1: you all the details, at least as much as we

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Speaker 1: know at this point. Chaos continuing in the state of Israel,

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Speaker 1: Benjamin Netanyahu pausing the judicial reforms that sparked those protests

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Speaker 1: at breaking on that as well, We've also gotten new

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Speaker 1: hearings into what exactly the hell happened with SVB this

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Speaker 1: as former President Trump weighs in with his own hot

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Speaker 1: take on both the Federal Reserve and the SVB bailout.

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Speaker 1: Really troubling story about front of the show, Matt Tayib,

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Speaker 1: who apparently, while he was testifying before Congress had an

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Speaker 1: IRS agent show up at his doorstep. We don't really

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Speaker 1: know why. And Elon Musk also is basically paywalling Twitter.

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Speaker 1: We'll tell you those details. Too excited to talk as

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Speaker 1: well to Peter Beinart, who is going to be part

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Speaker 1: of covering that story on of Israel. He's been really

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Speaker 1: pretty courageous in his views and his analysis and his

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Speaker 1: journalism with regard to that nation. So a lot to

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Speaker 1: get to you before we get to Nashville. Crystal, do

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Speaker 1: you want to address why you're at home today? Yes,

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Speaker 1: So I've been a little bit under the weather, nothing

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Speaker 1: too bad, but there is a horrific stomach bug that

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Speaker 1: is rampaging through my household. So I did not want

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Speaker 1: to risk inflicting this plague upon you, Saga, or anyone

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Speaker 1: else in the studio, So out of an abundance of caution,

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Speaker 1: decided to do the show remotely for today. But I'm

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Speaker 1: already feeling better. I was feeling pretty rough yesterday, but

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Speaker 1: I'm already feeling a lot better. I'm sure I'll be

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Speaker 1: back on Thursday. Well, we thank you for saving our stomachs,

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Speaker 1: and we hope that you remain better and all the kids,

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Speaker 1: of course get better as well. So it's sad to

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Speaker 1: not have you in the studio, but hopefully everything is

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Speaker 1: going to be okay. Thursday, all right, let's get to it.

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Speaker 1: Terrible news that happened late yesterday Christian School, mass school

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Speaker 1: shooting that occurred there. We had an update from Nashville

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Speaker 1: Police after the shooting and after the suspect was actually

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Speaker 1: killed by police. Here's what the police chief had to say.

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Speaker 1: Our investigations tell us that she was a former student

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Speaker 1: at the school. I don't know what grade she's attended

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Speaker 1: a grades, but we do from Delite she was a

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Speaker 1: student there. She identified student she does identify as Trends. Yes.

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Speaker 1: So it was five officers that immediately went in and address.

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Speaker 1: We have video that we're going to release, but you

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Speaker 1: can see in a video, you can hear un fire

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Speaker 1: going on as they're in the school. They address the

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Speaker 1: threat and take that threat down. We know there were

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Speaker 1: two AR style weapons, one a rifle, another was an

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Speaker 1: AR style pistol, and the other was a handgoing We

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Speaker 1: believe two of those may have been obtained legally locally. Here.

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Speaker 1: No we have a manifesto. We have some writings that

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Speaker 1: we're going over that pertain to this day, the actual incident.

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Speaker 1: We have a map drawn out of how this was

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Speaker 1: all going to take place. There's right now a theory

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Speaker 1: of that we may be able to talk about later,

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Speaker 1: but it's not confirmed, and so we'll put that out

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Speaker 1: as soon as we can. A couple of important things

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Speaker 1: we could take away from their number one police chief

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Speaker 1: saying the suspect is a female to male transgender. Appears

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Speaker 1: to have left behind a manifesto. We don't yet know

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Speaker 1: what the contents of that manifesto have been. There haven't

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Speaker 1: been any leaks or any of anything that was posted. However,

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Speaker 1: it appears to be motivated at least in some way

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Speaker 1: against this school. The person was previously had attended this

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Speaker 1: Christian school. We know a little bit, unfortunately, most about

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Speaker 1: the victims, going to put this up there on the screen,

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Speaker 1: one of them including a nine year old daughter of

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Speaker 1: the pastor. So we have six victims of the Covenant

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Speaker 1: School shooting, including the private Christian academy headmistress, a custodian,

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Speaker 1: and the young daughter of the school's pastor, and officials

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Speaker 1: identified three of the Slange students as Evelyn deek House,

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Speaker 1: Hallie Scruggs, and William Kinney, all aged nine years old,

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Speaker 1: in addition to three members of the faculty from both

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Speaker 1: sixty one and the school head actually Katherine Kohon. So

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Speaker 1: obviously it's just a heartbreaking case that's happening here in

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Speaker 1: Nashville at Chris Lane. You know, we were talking a

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Speaker 1: little bit when the outbreak of the shooting. Unfortunately, it

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Speaker 1: almost seems cooked up in a lab to try and

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Speaker 1: you know, trigger a culture war here in the United States.

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Speaker 1: And you know, I just think it's very upsetting anytime,

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Speaker 1: you know, children especially are killed in a school, and

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Speaker 1: more so, you know, almost what we saw in Uvaldi

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Speaker 1: and elsewhere, like the immediate kind of twisting for political

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Speaker 1: purposes that I'm watching a lot of people on the

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Speaker 1: right also partake in right now is exactly what they

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Speaker 1: decry whenever it happens up on the left. And you know, clearly,

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Speaker 1: anybody who shoots up a school and murders innocent children

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Speaker 1: is a drained individual. That is the case, regardless of

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Speaker 1: whether they're transgender or not. I see a lot of

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Speaker 1: these kind of people playing in the same political space

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Speaker 1: as a lot of people do whenever it's a you know,

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Speaker 1: let's say, a right wing motivated shooting like El Paso

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Speaker 1: or something like that, which is obviously, of course not

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Speaker 1: seized upon or defended against in similar veins saying why

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Speaker 1: are you politicizing it here? Most immediately, I'm curious what

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Speaker 1: your takeaways were, you know, beyond just the obvious heartbreak

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Speaker 1: for the parents and for the children who were killed here. Yeah,

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Speaker 1: I mean, I don't know what the takeaways can be.

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Speaker 1: It's horrific, and it speaks to some sort of deep

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Speaker 1: sickness at the core of our society, because it's easy

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Speaker 1: to forget that, you know, this doesn't happen regularly in

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Speaker 1: other countries. And you know, there's a couple ways in

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Speaker 1: which we're outliers. One is certainly the level amount of

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Speaker 1: guns that we are a wash in and that culture.

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Speaker 1: And the other is, I think a lack of access

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Speaker 1: to healthcare and a lack of access in particular to

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Speaker 1: mental health care. So I'm just at a loss at

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Speaker 1: this point. You know, of course there have been calls

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Speaker 1: for increased gun control. Those are things that I'm open to,

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Speaker 1: but I also have always been sort of realistic and

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Speaker 1: pragmatic about I don't know that just banning an ar

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Speaker 1: fifteens or you know, banning particular weapons are really gonna

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Speaker 1: completely solve the issue. A lot of folks are pointing

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Speaker 1: to the fact that the congressman who represents this district,

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

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Speaker 1: speak to the culture of being a wash in guns.

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Speaker 1: This was the Christmas card that this congressman put out

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Speaker 1: last year. I believe he is a freshman member, And

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Speaker 1: for those of you who are just listening, it's him

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Speaker 1: with his kids and his wife all, you know, holding

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Speaker 1: some sort of weapon here. So you know, obviously this

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Speaker 1: is someone who has been very much in favor of

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Speaker 1: why spread availability and access of firearms. But you know,

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Speaker 1: it's just a disgusting occurrence that, again I think, just

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Speaker 1: speaks to some sort of deep sickness at the core

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Speaker 1: of our society. Yeah, I mean, I just you know,

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Speaker 1: I really just wish that it wasn't a grab bag

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Speaker 1: of everything. So, you know, from what I look at,

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Speaker 1: you know, on my Twitter, in terms of the reaction

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Speaker 1: right wing lawmakers elsewhere, everything is about the discussion of

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Speaker 1: the transidentity here of the shooter and listen I mean,

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Speaker 1: if there were hormones involved, or lack of mental health resources,

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Speaker 1: or that was something that was referenced. Look, I mean,

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Speaker 1: we can't surmise the actual motive, but it doesn't take

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Speaker 1: a genius to figure out that they may have had

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Speaker 1: some resentment at the school that they had attended as

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Speaker 1: opposed to their current identity. I think that's absolutely worth

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Speaker 1: a discussion as well. However, you know, also there's just

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Speaker 1: as you said, you know, almost immediately that tweet that

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Speaker 1: you've showed, you know, went immediately viral talking about gun access. Well,

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Speaker 1: we've had gun access in this country for a long time,

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Speaker 1: like you've had ar style weapons, you know, it used

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Speaker 1: to actually not be all that uncommon, especially where I'm

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Speaker 1: from in Texas, for like kids to have literal guns

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Speaker 1: in their trucks like in the nineteen eighties. But there

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Speaker 1: were no school shootings. It's something that just like Columbine

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Speaker 1: and afterwards, just ignited something I'm not exactly sure what

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Speaker 1: it was. On top of that, we of course are

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Speaker 1: having a discussion here about mental health resources. It was

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Speaker 1: actually a major takeaway from Uvaldi that I think the

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Speaker 1: most unfortunate part actually of the entire Uvaldi discourse around

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Speaker 1: the mental health resource accessibility and all that was a

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Speaker 1: lot of the hypocrisy that I saw in particular that

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Speaker 1: really frustrates me. So for example, like Texas Governor Greg

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Speaker 1: Abbott talking about the need for mental health resources when

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Speaker 1: you literally denied funding for mental health Medicare and federal

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Speaker 1: funds that would have funded such facilities, you know, at

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Speaker 1: the same time, you know, look, taking away guns is

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Speaker 1: not going to solve First of all, it's not going

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Speaker 1: to happen. It's just not I'm already on the record

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Speaker 1: it literally against gun control specifically for this reason because

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Speaker 1: I don't think it would actually solve anything. But beyond that,

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Speaker 1: on a non practical level, it's not just guns, as

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Speaker 1: I just as laid out. It's multifaceted. I think at

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Speaker 1: our show our best, you know, difficult moment like this,

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Speaker 1: we just try to show people like, well, there's no

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Speaker 1: one size fits all solution. We can be open to it.

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Speaker 1: We should just approach each other with compassion that I

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Speaker 1: don't think there's any other way to do it, especially

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Speaker 1: in a horrific time like they actually know somebody who

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Speaker 1: knew some of the people who were killed in the

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Speaker 1: shooting and we're close family friends with them, and those

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Speaker 1: people are really hurting right now. Yeah, I mean that

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Speaker 1: is certainly the case. I think it's also just worth

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Speaker 1: saying there's a lot we don't know. You know. One

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Speaker 1: of the things that I will definitely be looking for is,

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Speaker 1: you know, how are the firearms acquired? Yeah? Was this

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Speaker 1: person on the radar of law enforcement previously? In that

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Speaker 1: press conference that we played a bit of, they said

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Speaker 1: that she didn't have any prior record or convictions. Doesn't

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Speaker 1: necessarily mean that there were no previous interactions with law

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Speaker 1: enforcement though, as we know. So those will be some

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Speaker 1: of the questions that we have. And not to mention

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Speaker 1: whatever is in this manifesto that this killer pend. I'm

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Speaker 1: glad that you brought that up because that's also my

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Speaker 1: number one you know, everyone also else, Everyone immediately reaches

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Speaker 1: for the guns or the trance thing. I'm like, hey,

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Speaker 1: you know Parkland Evaldi, we can go on for Charleston,

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Speaker 1: all this, every single case known to law enforcement, No

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Speaker 1: mass murderer just wakes up one day and commits and

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Speaker 1: act like this, from a terrorist to a school shooter,

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Speaker 1: there are breadcrumbs that are everywhere. There are always it's

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Speaker 1: a drop drop bag. And as you said, looking and

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Speaker 1: going to be paying very close attention to, was the

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Speaker 1: nine to one to one call ever made? You know

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Speaker 1: why exactly? Even in the motivation? What about social media postings?

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Speaker 1: Did somebody ever report what was going on here? So

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Speaker 1: let's also not take our eye off the ball of

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Speaker 1: this could be a law enforcement failure that we don't

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Speaker 1: yet know some of the details of and that we're

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Speaker 1: going to be hoping that some local media and maybe

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Speaker 1: even mainstream media will dig into. So look, guys, you know,

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Speaker 1: that's basically everything that we have here. As Crystal talked

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Speaker 1: about the spark for gun control, President Biden in his

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Speaker 1: first initial comment and seized upon the shooting to talk

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Speaker 1: about this. Here's what he had to say. We're mondering

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Speaker 1: this situation really closely, Ben, as you know, and we

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Speaker 1: have to do more to stop gun violence. It's ripping

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Speaker 1: our communities apart, ripping the soul of this nation, ripping

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Speaker 1: it's the very sole of the nation. And we have

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Speaker 1: to do more to protect our schools so they aren't

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Speaker 1: turned into prisons. You know, a shooter in this situation

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Speaker 1: reported we had two assault weapons in a pistol to

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Speaker 1: ak forty seven, so I call on Congress again to

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Speaker 1: pass my assault weapons ban. So we had the call

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Speaker 1: for the assault weapons ban here. However, you know, the

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Speaker 1: police chief said that they were legally acquired. We still

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Speaker 1: do know need to know some of the details. At

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Speaker 1: least two of firearms and another three I believe we're

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Speaker 1: involved in this case. So you know, it's not also

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Speaker 1: uncommon for any of these guns to be illegally purchased,

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Speaker 1: even in the event of increased background check, et cetera.

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Speaker 1: So we'll see if there's any you know, red flags

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Speaker 1: from psychiatrists, from medical system, from the police chief, law enforcement,

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Speaker 1: the details on all that, and we'll continue to stick

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Speaker 1: on the story. I know. The Counterpoints also will bring

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Speaker 1: you guys an update if needed tomorrow as well as

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Speaker 1: on our show on Thursday. However, let's get to Israel,

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Speaker 1: which is what we're going to start our show within

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Speaker 1: the first place. Before this tragedy occurred, there have been

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Speaker 1: really wild and widespread protests in Israel among Israeli Jews

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Speaker 1: over proposed plans by Benjamin Netnaho to quote unquote reform

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Speaker 1: the judiciary. It's basically a major power grab as he

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Speaker 1: himself faces corruption charges and would lead to undermining the

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Speaker 1: independent judiciary. So there's been a huge response to this,

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Speaker 1: and this really came to a peak over the weekend

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Speaker 1: and into Monday morning. Let's ahead and put this up

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Speaker 1: on the screen so we can see a little bit

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Speaker 1: of what this looked like. These protests, which were truly nationwide,

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Speaker 1: followed Netnya who's decision to sack his defense minister. His

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Speaker 1: defense minister had actually called for a pause on these

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Speaker 1: judicial reforms. Netnaho fired him, and then there was a

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Speaker 1: massive up in the protest nationwide, including their largest trade

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Speaker 1: union which I think had some like seven hundred thousand members,

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Speaker 1: and Israeli embassies being shut down. So this was a

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Speaker 1: massive escalation in the level of protest, and we do

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Speaker 1: now have a reaction from Netanyahu. Let's go ahead and

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Speaker 1: put this up on the screen. Because of the pushback,

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Speaker 1: he announced a delay in that judicial overhaul plan. He's

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Speaker 1: deferring the controversial proposals to next parliamentary session after mass protests.

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Speaker 1: So he's not saying we're not doing it, but he

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Speaker 1: is saying we're going to press pause. He said he

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Speaker 1: would delay those changes because he wants to give time

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Speaker 1: to seek a compromise over the contentious package. Speaking in

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Speaker 1: a televised address on Monday evening, ten hours after he

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Speaker 1: was originally scheduled to give a statement net Yahoo, they say,

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Speaker 1: looking tired and striking an unusually flat tone, said he

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Speaker 1: was not willing to tear the nation in half, and

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Speaker 1: there's a possibility of avoiding fraternal war through dialogue. I

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Speaker 1: as Prime Minister, will take a time out for that dialogue.

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Speaker 1: There's another piece of this too, Sagur, which is as

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Speaker 1: part of this deal to pause the judicial reform. Because

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Speaker 1: remember Netanyahu's part of a coalition government with some really

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Speaker 1: hard right figures who wanted to press forward with this

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Speaker 1: regardless of the public reaction. So in order to secure

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Speaker 1: this delay as part of the deal, he announced that

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Speaker 1: they would form a civil National Guard, which will be

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Speaker 1: led by this Minister of National Security. It'samar Ben Gavier,

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Speaker 1: who is i mean effectively an out and out fascist,

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Speaker 1: is basically called for Palestin means to be wiped down,

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Speaker 1: and a member of the far right Jewish Power Party.

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Speaker 1: So this is coming not without a cost. And again

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Speaker 1: it's not like the reforms are being completely quashed. They're

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Speaker 1: just being pushed off to the next parliamentary session. Yeah,

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Speaker 1: this is a really interesting episode and we'll talk about

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Speaker 1: it more with our guest Peter Beinart. But it really

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Speaker 1: is a revenge or i guess, a revolt of the

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Speaker 1: secular Jewish el inside of Israel, who have been much

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Speaker 1: more kind of wedded to Western democratic ideals and are

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Speaker 1: very upset at the both religious component of the government,

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Speaker 1: the most religious government I think, yeah, in modern Israeli history.

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Speaker 1: And on top of that, you know, the judicial reform,

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Speaker 1: of which has never been popular amongst them, is one

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Speaker 1: which a lot of like mass cultural Israeli society was

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Speaker 1: revolting against. This is one of those where kind of

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Speaker 1: the secular Jewish elite inside of Israel, the business elite,

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Speaker 1: the tech elite, so to speak, in conjunction with a

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Speaker 1: lot of the younger people who would agree with them,

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Speaker 1: who are also raised secular, were the ones who took

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Speaker 1: to the streets. We should, you know, say though there

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Speaker 1: was also a protest to support the judicial reform, and

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Speaker 1: it's one of those which just just underscores that, Look,

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Speaker 1: you know, Netanyahu in the religious government, they do also

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Speaker 1: maintain some support inside of Israel, especially amongst kind of

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Speaker 1: the Orthodox, the ultra Orthodox Jews who maintain a significant

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Speaker 1: portion of Israeli population in society. That's one of the

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Speaker 1: major cleavages that exists in israel Is fights over welfare,

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Speaker 1: military service, you know what exactly qualifies as what the

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Speaker 1: level of support that they would receive from the Israeli state,

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Speaker 1: And it's caused quite a bit of tension in their society,

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Speaker 1: which is kind of erupting all over this judicial reform.

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Speaker 1: But it's much much deeper than that. It's really just

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Speaker 1: not about the court. It's both singularly about Netteenyah himself,

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Speaker 1: who is obviously, you know, facing serious legal trouble if

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Speaker 1: he doesn't get any of this through, but so many

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Speaker 1: different coalitions and factions to kind of hitch their wagon

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Speaker 1: to him or to the opposing side, that it's all

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Speaker 1: kind of coming out in this major protest. Yeah, I

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Speaker 1: think that's well said that this was the lightning rod,

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Speaker 1: but the schism goes much much deeper. We have one

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Speaker 1: other piece we can show you here, which is just

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Speaker 1: the extent of the protests among Israeli Jews. It went

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Speaker 1: so far. God and put this up on the screen.

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Speaker 1: As Israeli embassies and consulates around the world, closed THEIRS

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Speaker 1: on Monday in protests over this judicial overhaul. As I

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Speaker 1: mentioned before, the largest labor union instructed all government employees

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Speaker 1: to go on strikes. So you truly had a general

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Speaker 1: strike among Israeli Jews in the country and even at

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Speaker 1: these embassies around the world. I mean, they shut down

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Speaker 1: the airport, everything was shut down. And so that level

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Speaker 1: of action actually forced Netanyahu's hand to have to do

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Speaker 1: something and at least press pause and hope that some

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Speaker 1: of the furor over this dies down. We also have

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Speaker 1: some breaking news this morning, which is that President Biden

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Speaker 1: has now extended an invitation in the wake of this

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Speaker 1: pause to netn Yahoo to come visit the White House.

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Speaker 1: You know, this is notable because there had been a

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Speaker 1: sort of you know, chill you might say, on their

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Speaker 1: relationships somewhat at least as this was all unfolding. Now

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Speaker 1: there is no specific date set, but it's kind of

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Speaker 1: you know, the White House extending in all of branch

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Speaker 1: and saying, okay, we appreciate that you paused these judicial

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Speaker 1: reforms and to give you a little bit more specifics

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Speaker 1: about what was being proposed here effectively, the courts in Israel.

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Speaker 1: It's not like they're like pro Palestinian or anything like that,

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Speaker 1: but they will occasionally side with Palestinians in land disputes.

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Speaker 1: And so that's why the far right politicians that including

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Speaker 1: net Nyahu and his allies, feel that the Court has

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Speaker 1: too much power and they want to be able to

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Speaker 1: overrule the court with the majority vote in the Kanesset.

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Speaker 1: So that's effectively. There's some other pieces here, but that's

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Speaker 1: effectively what it would do. It also give them more

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Speaker 1: power to place judges on the court, so that they

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Speaker 1: would have more power that way as well. So this

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Speaker 1: is both about nets Yahu trying to escape the corruption

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Speaker 1: charges that he's facing, but it's also an ideological battle

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Speaker 1: here too. Yep, exactly, and that's why it's so important

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Speaker 1: to note. It's like he has a personal angle, but

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Speaker 1: also it's one of those very convenient ones where politically

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Speaker 1: he's The Biden administration also in a real bind because

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Speaker 1: originally they had protested or at least issued a word

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Speaker 1: of condemnation about judicial overhaul that frosty relations. The State

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Speaker 1: Department didn't have actually any reaction to the protest movement

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Speaker 1: inside of Israel, which a lot of people took certain

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Speaker 1: notice of, and then also immediately inviting him to the

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Speaker 1: White House after he called it off. I will say,

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Speaker 1: from what I've seen this morning, the US Ambassador to

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Speaker 1: Israel says there's no date yet been set for the

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Speaker 1: visit or for the meeting, so it's not like frosty

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Speaker 1: relations won't remain. We should remember too, Biden and Obama

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Speaker 1: are no heroes amongst the ultra religious coalition inside of Israel.

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Speaker 1: They don't forget the UN resolutions that the Obama administration

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Speaker 1: allowed to go through in the last days of his presidency,

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Speaker 1: condemning It's been a while since I've studied it, but essentially,

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Speaker 1: I think around Israel's settlements, they kind of viewed that

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Speaker 1: as a quote stab in the back. It caused a

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Speaker 1: big thing. Of course, Netanyahu is the one who came

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Speaker 1: to America and spoke out against the Iran deal before Congress,

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Speaker 1: against the explicit protest of President Obama, so there was

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Speaker 1: a lot of bad blood there. And President Biden has

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Speaker 1: always been a little bit more staunchly pro Israel than

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Speaker 1: President and Obama was has always kind of called himself

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Speaker 1: that and was certainly in Israeli ally within Congress, but

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Speaker 1: many of the people who work for him, were a

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Speaker 1: part of that Obama team, inviting a lot of deep

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Speaker 1: suspicion from what I understand inside the Israeli government. So

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Speaker 1: he has probably never been more of a frosty relations

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Speaker 1: between President Biden and Netaan Yahoo as well within this.

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Speaker 1: So we'll see whether that meeting actually does occur anytime

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Speaker 1: in this near future, because it wouldn't necessarily be politically

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Speaker 1: advantages Netanyahu and then certainly for Biden it would look weak,

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Speaker 1: you know, for both criticizing somebody and then inviting them

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Speaker 1: over here on top of the fact that there is

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Speaker 1: a significant I know there was a poll I think,

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Speaker 1: I know you were thinking about covering it can bring

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Speaker 1: up here, which is that democratic support for Israel is

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Speaker 1: an all time low today that it has been in

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Speaker 1: I think like modern American history if you look at

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Speaker 1: the that many just rank and filed Democratic voters feel

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Speaker 1: about the issue. So Biden himself is a little bit

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Speaker 1: of a bind. Yeah, that's interesting that you bring that up.

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Speaker 1: There was some new polling that showed positive sentiment and

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Speaker 1: sort of like sympathy within the for the Palestinian cause.

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Speaker 1: It skyrocketed among Democrats is now majority held position, which

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Speaker 1: is you know, quite remarkable, given that I have to

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Speaker 1: always be careful about the way you phrased that, but

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Speaker 1: given how much more organized and influential the Israel lobby

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Speaker 1: is in Washington and in terms of the media. So

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Speaker 1: this is another instance of you know, the public is

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Speaker 1: being told one thing, but they're making up their mind themselves,

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Speaker 1: especially on the Democratic side. And there was a separate

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Speaker 1: poll that also gave, you know, expose the lie that

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Speaker 1: being critical of the Israeli government is somehow anti Semitic,

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Speaker 1: because at the same time you had a lot of

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Speaker 1: sympathy for the Palestinian cause among Democratic voters. You also

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Speaker 1: have very warm and positive feelings towards Jewish people in general.

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Speaker 1: So you can critique the Israeli government obviously without being

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Speaker 1: anti Semitic, and it's absurd to suggest otherwise. The other

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Speaker 1: piece of this I want to get to, and we

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Speaker 1: have a wonderful guest, Peter Binart, to talk to us

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Speaker 1: about this, is, you know, there's a hypocrisy at the

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Speaker 1: core of these protests, which is you have Israeli Jews

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Speaker 1: who are fighting so hard and so passionately for their

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Speaker 1: own democratic rights, while you have you know, majority Palestinian

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Speaker 1: population which has no democracy, no democratic rights, and they're wondering,

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Speaker 1: where's your concern for democracy where we are concerned. So

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Speaker 1: let's go ahead and bring in Peter and we can

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Speaker 1: talk about that aspect of things as well. Really excited

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Speaker 1: to be joined this morning by Peter Baynart. He is

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Speaker 1: a professor of political science and journalism at the City

430
00:22:59,080 --> 00:23:01,239
Speaker 1: University of New York, and he also is author of

431
00:23:01,280 --> 00:23:04,440
Speaker 1: the bune Art notebook on Substack. Recommend that you all

432
00:23:04,520 --> 00:23:07,240
Speaker 1: to subscribe to that. Great to see you, Peter, You sir,

433
00:23:07,800 --> 00:23:10,520
Speaker 1: nice to be with you. I want to get into

434
00:23:10,560 --> 00:23:12,920
Speaker 1: some of what you've been writing about. But first off

435
00:23:12,920 --> 00:23:14,960
Speaker 1: the top, we've got some breaking news this morning, which

436
00:23:15,040 --> 00:23:19,560
Speaker 1: is that President Biden has extended an invitation to Israeli

437
00:23:19,600 --> 00:23:24,080
Speaker 1: Prime Minister Benjamin Netanya, who, after Natya, who decided to

438
00:23:24,320 --> 00:23:27,879
Speaker 1: at least pause these judicial reforms. You know, what do

439
00:23:27,960 --> 00:23:32,280
Speaker 1: you make of the invitation and the timing? You know,

440
00:23:32,600 --> 00:23:34,879
Speaker 1: maybe they saw it as a payoff Jetanya, who for

441
00:23:34,960 --> 00:23:40,040
Speaker 1: having for having delayed this judicial overhall effort. It's not

442
00:23:40,080 --> 00:23:43,480
Speaker 1: surprising that an American president would invite any Israeli prime minister,

443
00:23:43,600 --> 00:23:46,080
Speaker 1: given how close a relationship the US and Israel have

444
00:23:46,400 --> 00:23:55,720
Speaker 1: now whether it's morally justified the fact an apartad state

445
00:23:55,800 --> 00:23:58,320
Speaker 1: by the world's leading human rights organizations, and in fact,

446
00:23:58,400 --> 00:24:01,320
Speaker 1: Israel's leading human rights organization, not to mention Palestinia human

447
00:24:01,359 --> 00:24:04,040
Speaker 1: rights organizations is a different question. But in the political

448
00:24:04,080 --> 00:24:07,600
Speaker 1: reality that exists in Washington, it's not surprising that Menshayakhu

449
00:24:07,640 --> 00:24:12,200
Speaker 1: would get an invitation. Okay, got it, And so Peter.

450
00:24:12,280 --> 00:24:14,960
Speaker 1: If we're digging into the bigger situation here, we've got

451
00:24:14,960 --> 00:24:18,840
Speaker 1: protests all over Israel. Does how should we make sense

452
00:24:18,840 --> 00:24:22,080
Speaker 1: of this in terms of Israeli domestic politics and then

453
00:24:22,080 --> 00:24:24,399
Speaker 1: the way that the US has approached the protest movement.

454
00:24:27,000 --> 00:24:30,560
Speaker 1: So what you have among Jewish Israelis is a kind

455
00:24:30,600 --> 00:24:33,840
Speaker 1: of a culture war that has certain analogs to what

456
00:24:33,840 --> 00:24:35,840
Speaker 1: you see in the United States. First of all, you

457
00:24:36,000 --> 00:24:39,439
Speaker 1: have a corrupt prime minister who's trying to bend the

458
00:24:39,520 --> 00:24:42,560
Speaker 1: judicial system to make sure he doesn't get prosecuted. That

459
00:24:42,800 --> 00:24:47,320
Speaker 1: might sound somewhat familiar to us. Secondly, Israeli Jewish society

460
00:24:47,400 --> 00:24:51,879
Speaker 1: is deeply divided along religious versus secular lines. This is

461
00:24:52,119 --> 00:24:55,720
Speaker 1: the most religious government in Israeli history, and one of

462
00:24:55,760 --> 00:24:58,159
Speaker 1: the things that it wants to do is ensure that

463
00:24:58,280 --> 00:25:01,520
Speaker 1: ultra orthodox Israelis Jews do not have to serve in

464
00:25:01,560 --> 00:25:05,320
Speaker 1: the military, which is a very very divisive issue among

465
00:25:05,400 --> 00:25:10,200
Speaker 1: Israeli Jewish society. You also have an ultranationalist I was

466
00:25:10,240 --> 00:25:14,040
Speaker 1: the even fascist element in the government that wants to

467
00:25:14,119 --> 00:25:18,520
Speaker 1: prevent the Supreme Court from allowing it to go even

468
00:25:18,800 --> 00:25:22,960
Speaker 1: further in seizing land from Palestinians. The street will already

469
00:25:23,000 --> 00:25:26,800
Speaker 1: allows the Israeli government to seize land from Palestinians fairly easily.

470
00:25:27,080 --> 00:25:29,320
Speaker 1: But there are elements in this government that I think

471
00:25:29,359 --> 00:25:33,520
Speaker 1: whose ultimate agenda is the expulsion of Palestinians, and they

472
00:25:33,640 --> 00:25:35,760
Speaker 1: want to ensure the Supreme Court can't get in the

473
00:25:35,800 --> 00:25:38,840
Speaker 1: way of that. So those are the cluster of issues

474
00:25:38,880 --> 00:25:42,000
Speaker 1: that have produced this fight, which is really among Jewish

475
00:25:42,040 --> 00:25:46,639
Speaker 1: Israelis with Palestinians largely as bystanders. Well, let's talk a

476
00:25:46,680 --> 00:25:48,720
Speaker 1: little bit more about that, because that's a piece that

477
00:25:48,760 --> 00:25:51,679
Speaker 1: you've been writing about and speaking about on your substack.

478
00:25:51,760 --> 00:25:53,520
Speaker 1: Let's go ahead and put this up on the screen.

479
00:25:53,960 --> 00:25:56,919
Speaker 1: From Peter, you say that in a certain kind of

480
00:25:57,000 --> 00:26:00,840
Speaker 1: bizarre way, it's almost worse more painful to see the

481
00:26:00,920 --> 00:26:02,919
Speaker 1: links that Israeli Jews are willing to go to to

482
00:26:02,920 --> 00:26:05,560
Speaker 1: fight for democracy for themselves, given that most of them

483
00:26:05,560 --> 00:26:09,160
Speaker 1: and most diaspora Jews are so profoundly oblivious or dismissive

484
00:26:09,240 --> 00:26:11,880
Speaker 1: or even hostile to the idea that Palestinian should also

485
00:26:11,880 --> 00:26:14,880
Speaker 1: have democracies themselves. Here in this tweet, you say Jewish

486
00:26:14,960 --> 00:26:18,760
Speaker 1: Israelis truly invited Palestinians to join their democratic struggle and

487
00:26:18,800 --> 00:26:21,040
Speaker 1: made it a struggle for freedom for everyone, not just

488
00:26:21,080 --> 00:26:23,960
Speaker 1: for Jews. That movement wouldn't just defeat Phoebe, it would

489
00:26:24,000 --> 00:26:28,000
Speaker 1: defeat apartheid and change the world. So talk a little

490
00:26:28,040 --> 00:26:31,680
Speaker 1: bit about the lens through which Palestinians must be viewing

491
00:26:31,720 --> 00:26:35,040
Speaker 1: these protests right so fresh, and we have to understand

492
00:26:35,040 --> 00:26:37,960
Speaker 1: the reality about eighty percent of the Palestinians who live

493
00:26:38,040 --> 00:26:42,040
Speaker 1: under Israeli control are not citizens, cannot become citizens of

494
00:26:42,119 --> 00:26:44,560
Speaker 1: the state in which they live, and cannot vote for

495
00:26:44,560 --> 00:26:46,919
Speaker 1: the government that controls their lives. These are the Palestinians

496
00:26:46,920 --> 00:26:50,679
Speaker 1: who live under military occupation in the West Bank and

497
00:26:50,720 --> 00:26:53,840
Speaker 1: East Jerusalem, those who live under block Hate, Israeli block

498
00:26:53,840 --> 00:26:58,280
Speaker 1: Hate and Gaza. The twenty percent of Palestinians are Israeli citizens,

499
00:26:58,280 --> 00:27:01,679
Speaker 1: but even they are citizens of a very profoundly second

500
00:27:01,680 --> 00:27:05,680
Speaker 1: class nature. So again to accuse a crude analogy, it's

501
00:27:05,720 --> 00:27:07,520
Speaker 1: almost as if you were in the kind of white

502
00:27:07,600 --> 00:27:11,640
Speaker 1: segregated American South and you had this huge protest movement

503
00:27:11,680 --> 00:27:14,439
Speaker 1: because you saw a white politician who seemed like they

504
00:27:14,440 --> 00:27:17,760
Speaker 1: were going to erode the democratic rights of white Southerners,

505
00:27:17,800 --> 00:27:20,720
Speaker 1: and then you'd have black people looking and say, wait

506
00:27:20,760 --> 00:27:23,520
Speaker 1: a second, here, this is really bizarre that you're kind

507
00:27:23,560 --> 00:27:26,400
Speaker 1: of launching this democracy movement as if we don't even

508
00:27:26,520 --> 00:27:31,000
Speaker 1: exist when we are denied all basic democratic rights. There

509
00:27:31,040 --> 00:27:36,000
Speaker 1: have been some Palestinian politicians inside Israel who have thought, well,

510
00:27:36,320 --> 00:27:40,200
Speaker 1: we should support these protests because what Natanyahu is doing

511
00:27:40,240 --> 00:27:43,520
Speaker 1: would allow the government to abuse us even more. But

512
00:27:43,600 --> 00:27:47,280
Speaker 1: I think the dominant reaction from Palestinian intellectuals and activists

513
00:27:47,680 --> 00:27:50,520
Speaker 1: on the ground and in the diaspora has been that

514
00:27:50,880 --> 00:27:55,960
Speaker 1: there's something really perverse and bizarre and insulting about Israelis

515
00:27:56,000 --> 00:28:01,760
Speaker 1: launching a movement to protect democracy when Palestinians who constitate

516
00:28:01,880 --> 00:28:04,399
Speaker 1: more constitute more than half of the people under is

517
00:28:04,440 --> 00:28:08,240
Speaker 1: really control, don't live in a democracy. And I think

518
00:28:08,280 --> 00:28:11,240
Speaker 1: that was the point I was trying to highlight. Got it, Peter,

519
00:28:11,400 --> 00:28:13,359
Speaker 1: how should you know, people who are looking at this,

520
00:28:13,560 --> 00:28:15,720
Speaker 1: One of the takeaway I've seen is that this actually

521
00:28:15,800 --> 00:28:18,640
Speaker 1: might bring down the Netuayau government. Just for context, because

522
00:28:18,640 --> 00:28:21,520
Speaker 1: I don't know people understand the roiling nature of Israel.

523
00:28:21,760 --> 00:28:25,199
Speaker 1: Israel's like constant shuffling of government. How realistic of a

524
00:28:25,240 --> 00:28:28,520
Speaker 1: possibility is that does the you know, as you said,

525
00:28:28,560 --> 00:28:32,439
Speaker 1: religious kind of ulternationalists coalition is will it remain together?

526
00:28:32,520 --> 00:28:36,359
Speaker 1: And how core is judicial overhaul actually to Nettaya, who's

527
00:28:36,400 --> 00:28:40,360
Speaker 1: tenuous script on power. If I had to guess, I

528
00:28:40,360 --> 00:28:43,480
Speaker 1: would guess the government will not fall because what's happened

529
00:28:43,480 --> 00:28:45,320
Speaker 1: as a result of these protests is that the government

530
00:28:45,400 --> 00:28:49,040
Speaker 1: has actually become pretty unpopular. And so in a parliamentary system,

531
00:28:49,120 --> 00:28:51,880
Speaker 1: if you're unpopular, you don't want to bring down your

532
00:28:51,880 --> 00:28:54,240
Speaker 1: government and go to elections because you're not going to

533
00:28:54,320 --> 00:28:57,160
Speaker 1: do very well. So I think that for that reason,

534
00:28:57,200 --> 00:29:01,200
Speaker 1: I think this coalition is likely to hang together. Coalition.

535
00:29:01,400 --> 00:29:05,560
Speaker 1: There were elements in this coalition that really wanted judicial overhaul,

536
00:29:05,600 --> 00:29:09,160
Speaker 1: but not everyone in this in this coalition wanted judicial overhaul,

537
00:29:09,360 --> 00:29:12,920
Speaker 1: And my guess, My guess would be that they will

538
00:29:12,960 --> 00:29:17,720
Speaker 1: now focus on pursuing other strategies of things they want

539
00:29:17,760 --> 00:29:20,840
Speaker 1: to do that are less not that will not produce

540
00:29:20,960 --> 00:29:24,240
Speaker 1: quite as ferocious a backlash. But I'm not sure they're

541
00:29:24,320 --> 00:29:26,920
Speaker 1: pausing it till May, and I think it'll partly What

542
00:29:27,000 --> 00:29:30,120
Speaker 1: will partly determine it is whether this protest movement continues

543
00:29:30,440 --> 00:29:32,440
Speaker 1: or whether it peters out and they feel like they

544
00:29:32,440 --> 00:29:35,240
Speaker 1: have a little bit more political of kind of runway

545
00:29:35,280 --> 00:29:37,640
Speaker 1: to it to go on. Got it. Part of the

546
00:29:37,680 --> 00:29:41,040
Speaker 1: deal that was struck here involves creating a new civil

547
00:29:41,400 --> 00:29:44,600
Speaker 1: national Guard, which looks like it will be led by

548
00:29:44,680 --> 00:29:47,720
Speaker 1: a far right politician. It'samar Ben Gaviro is the current

549
00:29:48,000 --> 00:29:51,720
Speaker 1: Minister of National Security and member of the Jewish Power Party.

550
00:29:52,640 --> 00:29:55,920
Speaker 1: Can you talk about that development, what it means and

551
00:29:56,280 --> 00:30:01,280
Speaker 1: how it's being received. Yeah, I mean again, I'm searching

552
00:30:01,320 --> 00:30:04,320
Speaker 1: for analogies for America. In some ways, it's a little

553
00:30:04,320 --> 00:30:08,400
Speaker 1: bit kind of like taking some very very far right

554
00:30:08,680 --> 00:30:11,480
Speaker 1: person in the Trump orbit and kind of not turning

555
00:30:11,520 --> 00:30:14,280
Speaker 1: the Proud Boys into some kind of national guard. I mean,

556
00:30:14,640 --> 00:30:19,120
Speaker 1: Ben Gavier is someone who's really been flirted with the

557
00:30:19,240 --> 00:30:24,160
Speaker 1: edges of terrorism. His entire career was actually considered so

558
00:30:24,280 --> 00:30:26,400
Speaker 1: much of a you know, was involved in the group

559
00:30:26,440 --> 00:30:30,480
Speaker 1: of people who assassinated Yitzak Rabin, the Prime Minister, in

560
00:30:30,520 --> 00:30:32,520
Speaker 1: the mid nineteen nineties, even though he himself was not

561
00:30:32,640 --> 00:30:37,120
Speaker 1: fingered for that had was a long time devotee and

562
00:30:37,200 --> 00:30:41,480
Speaker 1: follower of rab America Hana, whose entire political identity was

563
00:30:41,480 --> 00:30:45,080
Speaker 1: wrapped up with the idea of expelling Palestinians, and who

564
00:30:45,120 --> 00:30:47,320
Speaker 1: for many years in his home had a poster of

565
00:30:47,360 --> 00:30:50,320
Speaker 1: a man named Beroke Goldstein, a terrorist who walked into

566
00:30:50,360 --> 00:30:52,960
Speaker 1: the Ebra, the Cave, the tomb of the Patriarchs, the

567
00:30:52,960 --> 00:30:56,400
Speaker 1: Ibrahimi Mosque and Pevron in nineteen eighty four and massacred

568
00:30:57,040 --> 00:31:00,000
Speaker 1: I think twenty nine Palestinians while they were in prayer.

569
00:31:00,200 --> 00:31:06,080
Speaker 1: So this is this man's basic agenda is to free

570
00:31:06,120 --> 00:31:09,640
Speaker 1: the Israeli military and police from any restrictions on their

571
00:31:09,680 --> 00:31:13,920
Speaker 1: ability to brutalize Palestinians, I think, with the ultimate aim

572
00:31:14,200 --> 00:31:18,680
Speaker 1: of trying to expel Palestinians, so an utterly lawless of

573
00:31:18,760 --> 00:31:21,840
Speaker 1: human beings. So to put this guy in charge of

574
00:31:21,880 --> 00:31:25,320
Speaker 1: some kind of private security for us, it's not clear, frankly,

575
00:31:25,360 --> 00:31:28,400
Speaker 1: how many people will actually serve in this, but is

576
00:31:28,600 --> 00:31:31,680
Speaker 1: you know, imagine what this means for Palestinians who don't

577
00:31:31,720 --> 00:31:34,360
Speaker 1: have their own police force and army that can protect them,

578
00:31:34,480 --> 00:31:38,440
Speaker 1: who are basically defenseless in the face of the Israeli

579
00:31:38,520 --> 00:31:41,200
Speaker 1: military and police as it stands now. And then you're

580
00:31:41,200 --> 00:31:44,840
Speaker 1: going to give this guy authority of some special unit.

581
00:31:44,880 --> 00:31:48,840
Speaker 1: I mean, it's a really terrifying situation. And finally, Peter,

582
00:31:49,760 --> 00:31:51,280
Speaker 1: you know a question that I think is at the

583
00:31:51,320 --> 00:31:54,600
Speaker 1: core of all of this. As you see Israeli Jews

584
00:31:54,640 --> 00:31:57,680
Speaker 1: fighting so hard for their democracy, while as you put it,

585
00:31:57,760 --> 00:32:01,320
Speaker 1: you know, the Palestinian majority is complete, we denied any

586
00:32:01,400 --> 00:32:06,240
Speaker 1: voice or any Democratics say, can you have a democracy

587
00:32:07,120 --> 00:32:11,800
Speaker 1: an ethno state? I think fundamentally no, because I think

588
00:32:11,800 --> 00:32:14,120
Speaker 1: at the core of liberal democracy is the idea of

589
00:32:14,160 --> 00:32:18,280
Speaker 1: equality under the law, irrespective of your race, religion, ethnicity.

590
00:32:18,520 --> 00:32:20,720
Speaker 1: And there is a global struggle we see all around

591
00:32:20,760 --> 00:32:23,680
Speaker 1: the world between this idea of equality under the law

592
00:32:24,080 --> 00:32:26,840
Speaker 1: and the idea that countries should be the property of

593
00:32:26,880 --> 00:32:31,040
Speaker 1: one racial, religious, ethnic tribe. You see it in India

594
00:32:31,080 --> 00:32:35,200
Speaker 1: where Narendramoti is trying to turn India into a Hindu state.

595
00:32:35,560 --> 00:32:37,440
Speaker 1: You see it, of course in the United States, where

596
00:32:37,440 --> 00:32:39,600
Speaker 1: we have powerful forces that want to make this a

597
00:32:39,640 --> 00:32:43,160
Speaker 1: white Christian state. In Europe as well, similar forces like that,

598
00:32:43,280 --> 00:32:47,360
Speaker 1: And so the notion we have gotten so used to

599
00:32:47,360 --> 00:32:50,320
Speaker 1: talking about Israel as a Jewish and democratic state that

600
00:32:50,400 --> 00:32:53,959
Speaker 1: I think people don't think enough about the fundamental contradictions

601
00:32:53,960 --> 00:32:58,720
Speaker 1: of that idea. And the problem is that Israel has

602
00:32:58,800 --> 00:33:02,680
Speaker 1: actually become a model for the kind of ethno state

603
00:33:03,080 --> 00:33:06,120
Speaker 1: that people all around the world who threatened the idea

604
00:33:06,160 --> 00:33:09,520
Speaker 1: of liberal democracy are trying to create, even including in

605
00:33:09,560 --> 00:33:12,600
Speaker 1: our own country. So no, I think what I would

606
00:33:12,640 --> 00:33:15,480
Speaker 1: hope is that one day is rebocomes a state for

607
00:33:15,520 --> 00:33:19,240
Speaker 1: all its citizens, a state that treats everybody the same

608
00:33:19,360 --> 00:33:22,920
Speaker 1: way legally, irrespective of what religion they are. And I

609
00:33:22,920 --> 00:33:26,040
Speaker 1: think that's the fight that you know that we need

610
00:33:26,080 --> 00:33:29,800
Speaker 1: to have all across the world. Yeah, well, we appreciate

611
00:33:29,800 --> 00:33:31,960
Speaker 1: you joining us, Peter. I really appreciate your insight and

612
00:33:32,000 --> 00:33:34,320
Speaker 1: your analysis on this. I know there's a lot going

613
00:33:34,320 --> 00:33:35,600
Speaker 1: on here and we're all trying to make sense of it,

614
00:33:35,680 --> 00:33:38,320
Speaker 1: So thank you. Thank you. A bunch of breaking news

615
00:33:38,360 --> 00:33:41,480
Speaker 1: to talk about with regard to Silicon Valley Bank. They

616
00:33:41,520 --> 00:33:44,920
Speaker 1: are holding their first hearings today in Congress as to

617
00:33:45,000 --> 00:33:47,720
Speaker 1: what the hell happens here. Before we get to that, though,

618
00:33:48,000 --> 00:33:50,680
Speaker 1: there has been at least a partial sale of Silicon

619
00:33:50,760 --> 00:33:52,560
Speaker 1: Valley Bank. Let's put this up on the screen. This

620
00:33:52,680 --> 00:33:55,479
Speaker 1: was brokered by the fd i C. The headline here

621
00:33:55,480 --> 00:33:57,800
Speaker 1: for the New York Times is Silicon Valley Bank sold

622
00:33:57,840 --> 00:34:01,680
Speaker 1: to First Citizens in government back deal. Banking regulators, which

623
00:34:01,720 --> 00:34:04,640
Speaker 1: announced announced the deal late Sunday, had been looking for

624
00:34:04,720 --> 00:34:09,440
Speaker 1: a buyer since seizing control of that failed bank. So

625
00:34:09,520 --> 00:34:12,800
Speaker 1: this includes the purchase of about seventy two billion dollars

626
00:34:12,840 --> 00:34:16,120
Speaker 1: in loans. There was a significant discount here of sixteen

627
00:34:16,120 --> 00:34:19,200
Speaker 1: point five billion dollars. They're also transferring all of the

628
00:34:19,239 --> 00:34:23,440
Speaker 1: bank's deposits worth fifty six billion dollars. Roughly ninety billion

629
00:34:23,480 --> 00:34:26,120
Speaker 1: dollars in Securities and other assets were not included in

630
00:34:26,160 --> 00:34:29,280
Speaker 1: the sale. But the bottom line for depositors now you

631
00:34:29,280 --> 00:34:32,279
Speaker 1: you know, are part of First Citizens Bank shares. They're

632
00:34:32,280 --> 00:34:34,640
Speaker 1: the ones who hold your money. You go to their branches,

633
00:34:34,719 --> 00:34:38,839
Speaker 1: and they own the Silicon Valley Bank branches as well.

634
00:34:38,960 --> 00:34:41,319
Speaker 1: Let's go ahead and put the FDIC announcement up on

635
00:34:41,360 --> 00:34:43,080
Speaker 1: the screen just so we can get a sense of that.

636
00:34:43,160 --> 00:34:46,240
Speaker 1: Their press release says First Citizens Bank and Trust Company

637
00:34:46,239 --> 00:34:49,400
Speaker 1: in Raleigh, North Carolina, to assume all deposits and loans

638
00:34:49,800 --> 00:34:53,279
Speaker 1: of Silicon Valley Bridge Bank that is the sort of

639
00:34:53,360 --> 00:34:58,640
Speaker 1: like temporary holding company for the bank. And you know,

640
00:34:58,960 --> 00:35:02,040
Speaker 1: one thing that was noteworthy here is this bank for

641
00:35:02,360 --> 00:35:04,800
Speaker 1: Citizens Bank and Trust Company based out in North Carolina.

642
00:35:04,840 --> 00:35:07,920
Speaker 1: This purchased it has apparently been making a habit of

643
00:35:08,000 --> 00:35:13,640
Speaker 1: purchasing distressed banks from the FDIC. Their size has grown

644
00:35:13,800 --> 00:35:17,520
Speaker 1: dramatically as they purchased more than twenty different government sees lenders.

645
00:35:17,640 --> 00:35:19,759
Speaker 1: Their assets have grown to more than one hundred billion

646
00:35:19,800 --> 00:35:23,640
Speaker 1: from about twenty billion dollars a decade ago. So that

647
00:35:23,719 --> 00:35:26,800
Speaker 1: sale has been brokeer, which, of course, you know Soccker

648
00:35:26,920 --> 00:35:30,440
Speaker 1: is worth remembering this didn't take that long to unfold.

649
00:35:30,880 --> 00:35:33,919
Speaker 1: You know, the normal process that could have played out

650
00:35:33,960 --> 00:35:37,879
Speaker 1: from the FDIC would have involved a similar sale depositors

651
00:35:37,920 --> 00:35:41,120
Speaker 1: being made, if not completely holed close to whole. It

652
00:35:41,200 --> 00:35:44,000
Speaker 1: just would have taken somewhat more time than what they

653
00:35:44,040 --> 00:35:48,360
Speaker 1: were able to guarantee. But clearly there was a buyer

654
00:35:48,880 --> 00:35:52,760
Speaker 1: for this bank and the assets here. Well, there certainly

655
00:35:52,800 --> 00:35:55,160
Speaker 1: was a buyer. And there's some even more of those

656
00:35:55,200 --> 00:35:58,960
Speaker 1: details which are pretty interesting just about how much the FED,

657
00:35:59,080 --> 00:36:03,520
Speaker 1: the FDIC and regulators screwed this before the actual crisis

658
00:36:03,560 --> 00:36:05,640
Speaker 1: even began. You flag this is going to put it

659
00:36:05,719 --> 00:36:09,160
Speaker 1: up there on the screen that in a February presentation

660
00:36:09,719 --> 00:36:14,360
Speaker 1: before the Federal Reserve, they had specifically brought up before

661
00:36:14,400 --> 00:36:17,880
Speaker 1: the Board of Governors rising interest rates on bank's financial

662
00:36:17,880 --> 00:36:24,120
Speaker 1: conditions and discussed the issues broadly, but highlighted svb's interest

663
00:36:24,200 --> 00:36:28,600
Speaker 1: rate and liquidity risk. In particular, staff relayed. They were

664
00:36:28,680 --> 00:36:31,920
Speaker 1: actively engaged with SVB, but as it turned out, the

665
00:36:31,920 --> 00:36:35,720
Speaker 1: full extent of the bank's vulnerability was not apparent until

666
00:36:35,760 --> 00:36:39,240
Speaker 1: the actual bank run on March ninth, So, in other words,

667
00:36:39,400 --> 00:36:41,680
Speaker 1: they knew exactly what was going on. They had some

668
00:36:41,840 --> 00:36:44,040
Speaker 1: time to try and pressure SVB to try and do

669
00:36:44,080 --> 00:36:46,320
Speaker 1: something about it, to try and head off this crisis.

670
00:36:46,400 --> 00:36:48,480
Speaker 1: They didn't do anything about it, and then the government

671
00:36:48,480 --> 00:36:51,800
Speaker 1: stepped in and guaranteed all of the deposits at SVB

672
00:36:52,120 --> 00:36:54,960
Speaker 1: and effectively at all large banks in the country, while

673
00:36:55,000 --> 00:36:58,880
Speaker 1: also screwing the smaller community banks. So the precedent, we

674
00:36:59,000 --> 00:37:01,480
Speaker 1: really can't let go of what happened. I know, everybody's

675
00:37:01,520 --> 00:37:03,399
Speaker 1: moved on. You know, Oh, nobody lost any money. There

676
00:37:03,440 --> 00:37:05,920
Speaker 1: was no real bank run for normal people, so okay,

677
00:37:05,960 --> 00:37:09,120
Speaker 1: but I mean this still is an extraordinary, most extraordinary

678
00:37:09,320 --> 00:37:12,680
Speaker 1: financial action by the United States government since two thousand

679
00:37:12,680 --> 00:37:15,360
Speaker 1: and eight, and the president which has set is still

680
00:37:15,400 --> 00:37:18,200
Speaker 1: not yet being grapple with. And unfortunately, you know, even

681
00:37:18,239 --> 00:37:20,359
Speaker 1: in the two thousand and eight context, at least there

682
00:37:20,440 --> 00:37:23,279
Speaker 1: was some anger about what happened. I'm glad that we

683
00:37:23,320 --> 00:37:26,520
Speaker 1: are having some congressional hearings, but there is no serious

684
00:37:26,560 --> 00:37:29,400
Speaker 1: effort yet to actually grapple with what happened here. And

685
00:37:29,440 --> 00:37:33,200
Speaker 1: I don't think people should underestimate the political vulnerability that

686
00:37:33,239 --> 00:37:37,480
Speaker 1: the Biden administration and really anybody who supported these actions

687
00:37:37,600 --> 00:37:40,239
Speaker 1: could face. Talk a little bit about you know, President Form.

688
00:37:40,320 --> 00:37:43,120
Speaker 1: President Trump definitely seizing on it because he's not an idiot.

689
00:37:43,160 --> 00:37:46,359
Speaker 1: Anybody could see this is a real political vulnerability. When

690
00:37:46,520 --> 00:37:49,600
Speaker 1: you know, big bankers get bailouts even whenever they do

691
00:37:49,719 --> 00:37:51,920
Speaker 1: something where they screw up, and they get to literally

692
00:37:51,960 --> 00:37:54,880
Speaker 1: continue to do business as usual and keep their regular

693
00:37:54,960 --> 00:37:57,400
Speaker 1: amounts of profit. It seems like a little bit of

694
00:37:57,400 --> 00:38:00,120
Speaker 1: special treatment for one people and not special treatment for

695
00:38:00,160 --> 00:38:05,480
Speaker 1: everybody else. Well, and to that point, yes, nobody has

696
00:38:05,480 --> 00:38:09,719
Speaker 1: any sympathy for bankers, the shareholders, et cetera. But I

697
00:38:09,760 --> 00:38:12,400
Speaker 1: got to say, these depositors put this up on the screen.

698
00:38:12,800 --> 00:38:16,880
Speaker 1: We're getting some more details about exactly who was bailed out.

699
00:38:17,239 --> 00:38:20,680
Speaker 1: Put this next piece up here. We now know per

700
00:38:20,840 --> 00:38:25,839
Speaker 1: the FDIC chair, that the ten largest deposit accounts at

701
00:38:26,000 --> 00:38:34,360
Speaker 1: SVB held thirteen point three billion dollars in the aggregate. Okay,

702
00:38:34,920 --> 00:38:42,319
Speaker 1: ten accounts had more than thirteen billion dollars combined. What

703
00:38:42,480 --> 00:38:46,440
Speaker 1: is wrong with you that you're holding billions of dollars

704
00:38:46,719 --> 00:38:49,239
Speaker 1: in an account that is only insured up to two

705
00:38:49,320 --> 00:38:51,560
Speaker 1: hundred and fifty thousand dollars. And keep in mind the

706
00:38:51,600 --> 00:38:54,440
Speaker 1: way this was sold to people, all the small businesses

707
00:38:54,480 --> 00:38:58,319
Speaker 1: and the mom and pop food panch bull shit. This

708
00:38:58,480 --> 00:39:01,120
Speaker 1: is the people that you bailed out. So even the

709
00:39:01,120 --> 00:39:03,960
Speaker 1: depositors who were the most sympathetic group here. You know,

710
00:39:04,120 --> 00:39:07,839
Speaker 1: I got some real questions about any company, CEO or

711
00:39:07,840 --> 00:39:12,520
Speaker 1: CFO that's holding over a billion dollars in a bank account.

712
00:39:12,880 --> 00:39:16,640
Speaker 1: You are an idiot ultimately, and you do not deserve

713
00:39:16,719 --> 00:39:19,879
Speaker 1: a bailan. You could wait a couple a week or

714
00:39:19,920 --> 00:39:22,680
Speaker 1: two weeks for a sale to occur to have access

715
00:39:22,680 --> 00:39:25,120
Speaker 1: to all of your billions of dollars here. Yeah, christl,

716
00:39:25,200 --> 00:39:28,480
Speaker 1: that is an average of one point three billion in

717
00:39:28,719 --> 00:39:31,920
Speaker 1: cash sitting in these accounts so let's think about that.

718
00:39:32,040 --> 00:39:34,640
Speaker 1: We all made fun of Roku for keeping half a

719
00:39:34,680 --> 00:39:37,480
Speaker 1: bill in the bank. It turns out they were junior

720
00:39:37,480 --> 00:39:41,640
Speaker 1: players and not even top ten inside the deposits. Inside

721
00:39:41,680 --> 00:39:44,280
Speaker 1: of this, it's also funny to me. You know, these

722
00:39:44,320 --> 00:39:47,840
Speaker 1: people are supposedly the most sophisticated financial minds, and tech

723
00:39:48,239 --> 00:39:50,279
Speaker 1: is the future. And I spoke to some of my

724
00:39:50,360 --> 00:39:53,440
Speaker 1: friends on Wall Street. They were laughing at them, and

725
00:39:53,480 --> 00:39:55,640
Speaker 1: they were like, hey, you think you're the first rich

726
00:39:55,680 --> 00:39:58,799
Speaker 1: person to ever exist. All our high network clients have

727
00:39:59,000 --> 00:40:02,480
Speaker 1: much more spread out assets. Specifically, in cases doesn't happen,

728
00:40:02,800 --> 00:40:06,600
Speaker 1: they buy private insurance on their deposits because this type

729
00:40:06,640 --> 00:40:09,080
Speaker 1: of stuff has happened before. And for somebody who has

730
00:40:09,120 --> 00:40:11,080
Speaker 1: got a net worth of you know, five six billion,

731
00:40:11,320 --> 00:40:13,600
Speaker 1: the interest payment that you'd be making on that is

732
00:40:13,680 --> 00:40:16,080
Speaker 1: well worth it in the case of catastrophic risk, which

733
00:40:16,200 --> 00:40:20,080
Speaker 1: exactly what happened here. They were actually literally laughing at

734
00:40:20,160 --> 00:40:23,000
Speaker 1: many of these tech billionaires and other people who might

735
00:40:23,040 --> 00:40:25,680
Speaker 1: have had assets like this concentrated in their bank accounts,

736
00:40:25,719 --> 00:40:29,200
Speaker 1: just saying that it was amateur hour. And so when

737
00:40:29,280 --> 00:40:32,600
Speaker 1: Wall Street is laughing at you for being irresponsible, I

738
00:40:32,640 --> 00:40:37,279
Speaker 1: don't really know what to say when even they are like,

739
00:40:37,320 --> 00:40:39,480
Speaker 1: you've got you people are a joke. You know, you

740
00:40:39,600 --> 00:40:41,640
Speaker 1: talk about how you're the future, and you don't even

741
00:40:41,680 --> 00:40:44,040
Speaker 1: know the very basics of what it's like to bank

742
00:40:44,239 --> 00:40:46,799
Speaker 1: as a high networth individual or as a high well

743
00:40:46,840 --> 00:40:50,040
Speaker 1: capitalized company. I think you could see that there were

744
00:40:50,040 --> 00:40:52,399
Speaker 1: some serious problems, not just with the bank. And that's

745
00:40:52,440 --> 00:40:54,480
Speaker 1: also why it was important in the first place. Why

746
00:40:54,480 --> 00:40:56,120
Speaker 1: did all these people have so much money in the bank.

747
00:40:56,320 --> 00:40:59,000
Speaker 1: Because this bank specifically catered to this one industry. They

748
00:40:59,040 --> 00:41:02,400
Speaker 1: became fantastically over a period of time. They had exclusive

749
00:41:02,440 --> 00:41:06,239
Speaker 1: lockup deals, they offered very favoring financing, very favorable terms.

750
00:41:06,239 --> 00:41:09,520
Speaker 1: I saw hilarious one from a depositor who talked about

751
00:41:09,520 --> 00:41:11,600
Speaker 1: how they had to move their deposits from Silicon Valley

752
00:41:11,640 --> 00:41:15,000
Speaker 1: Bank to somewhere else and that bank canceled their account

753
00:41:15,000 --> 00:41:17,279
Speaker 1: because they asked for a physical address. And he goes

754
00:41:17,320 --> 00:41:20,080
Speaker 1: that never happened to me and somebody at Silicon Valley Bank,

755
00:41:20,239 --> 00:41:22,399
Speaker 1: and someone replied, You're like, hey, that's actually the law.

756
00:41:22,440 --> 00:41:24,920
Speaker 1: You're supposed to have a physical address. So what are

757
00:41:24,960 --> 00:41:27,120
Speaker 1: you talking about. He's like, Oh, Silicon Valley Bank never

758
00:41:27,120 --> 00:41:29,920
Speaker 1: asked me that. For seven years while I was a

759
00:41:29,960 --> 00:41:32,360
Speaker 1: client in them. It's like, so they were illegal, basically

760
00:41:32,360 --> 00:41:35,879
Speaker 1: illegally banking for seven years while at this one bank.

761
00:41:35,960 --> 00:41:38,040
Speaker 1: Why because they catered to the tech industry, which is

762
00:41:38,120 --> 00:41:41,920
Speaker 1: high moving startup and all that. And look, risky industries

763
00:41:42,120 --> 00:41:46,000
Speaker 1: are going to attract risk. That's something which everybody likes

764
00:41:46,040 --> 00:41:48,719
Speaker 1: on the upside. Nobody seems to like it on the downside,

765
00:41:48,840 --> 00:41:52,080
Speaker 1: except in this case, the downside, the US government is

766
00:41:52,080 --> 00:41:53,799
Speaker 1: the one that steps in and says everybody's going to

767
00:41:53,800 --> 00:41:57,080
Speaker 1: be okay. So I just think it's totally ridiculous. And

768
00:41:57,440 --> 00:42:01,320
Speaker 1: there is, of course still continue to be many questions

769
00:42:01,480 --> 00:42:04,200
Speaker 1: about how the regulators were asleep at the switch here,

770
00:42:04,320 --> 00:42:09,040
Speaker 1: with which I think reflects a deep ideological failing among

771
00:42:09,120 --> 00:42:13,640
Speaker 1: all of our supposed regulators, who have seen their role

772
00:42:13,920 --> 00:42:17,160
Speaker 1: basically postgreens Band and in the quote unquote neoliberal era,

773
00:42:17,360 --> 00:42:20,440
Speaker 1: as rather than actually serving as the cops on the

774
00:42:20,440 --> 00:42:23,319
Speaker 1: beat to make sure that any sort of obvious risk

775
00:42:23,440 --> 00:42:25,680
Speaker 1: is being mitigated and these banks are being dealt with,

776
00:42:26,280 --> 00:42:29,799
Speaker 1: they've seen their role as just providing transparency to the

777
00:42:29,840 --> 00:42:33,680
Speaker 1: market because the market will handle the regulation. I mean,

778
00:42:33,680 --> 00:42:37,680
Speaker 1: it really is like the most classic possible situation because

779
00:42:38,440 --> 00:42:42,319
Speaker 1: not only from Michael Barr's testimony here, but there was

780
00:42:42,440 --> 00:42:45,960
Speaker 1: previous reporting that the FED did know there were issues

781
00:42:46,000 --> 00:42:48,680
Speaker 1: here for not just like a month in advance, for years.

782
00:42:48,760 --> 00:42:51,239
Speaker 1: They knew that there was an interest rate risk exposure.

783
00:42:51,280 --> 00:42:53,600
Speaker 1: They sent their little memos to the bank of like, hey, guys,

784
00:42:53,680 --> 00:42:56,000
Speaker 1: you got to do something about this, but they didn't

785
00:42:56,000 --> 00:42:59,160
Speaker 1: actually take any action. And so who ends up on

786
00:42:59,200 --> 00:43:01,640
Speaker 1: the hook at the end of that, Well, it's all

787
00:43:01,680 --> 00:43:05,080
Speaker 1: of us. The last piece about the that I just

788
00:43:05,120 --> 00:43:08,840
Speaker 1: can't get over with the you know, depositors with billions

789
00:43:08,880 --> 00:43:12,879
Speaker 1: of dollars in the bank. We were really sold this

790
00:43:13,000 --> 00:43:15,759
Speaker 1: narrative of we've got to act and take these extraordinary

791
00:43:15,840 --> 00:43:19,400
Speaker 1: actions because this particular bank is special and this is

792
00:43:19,440 --> 00:43:21,759
Speaker 1: going to have huge reverberating impacts on all of these

793
00:43:21,760 --> 00:43:24,920
Speaker 1: small businesses, et cetera. I think we can see now

794
00:43:25,040 --> 00:43:28,840
Speaker 1: that there was perhaps no bank and group of depositors

795
00:43:29,280 --> 00:43:34,440
Speaker 1: better prepared to weather a financial storm than this bank

796
00:43:34,560 --> 00:43:38,399
Speaker 1: and this group of depositors. So, you know, if they

797
00:43:38,719 --> 00:43:41,719
Speaker 1: had to get a bridge loan from their wealthy backers

798
00:43:41,880 --> 00:43:44,400
Speaker 1: until you know, the next week when they'd have access

799
00:43:44,400 --> 00:43:47,840
Speaker 1: to their deposits, most of these people would have been fine.

800
00:43:47,920 --> 00:43:51,279
Speaker 1: So again, this speaks to the core problem and the

801
00:43:51,360 --> 00:43:55,040
Speaker 1: ramifications of these actions, which is, if you're going to

802
00:43:55,120 --> 00:44:01,359
Speaker 1: intervene in this incredibly extraordinary system wide way when it's

803
00:44:01,400 --> 00:44:05,280
Speaker 1: Silicon Valley Bank, a mid size bank with a bunch

804
00:44:05,360 --> 00:44:11,480
Speaker 1: of billionaire depositors, that means that you basically have every

805
00:44:11,520 --> 00:44:14,960
Speaker 1: significant bank in the country, you have deemed them all

806
00:44:15,160 --> 00:44:17,480
Speaker 1: too big to fail. You have put the taxpayers on

807
00:44:17,480 --> 00:44:20,759
Speaker 1: the hook for all of these banks and whatever idiotic

808
00:44:20,800 --> 00:44:23,960
Speaker 1: decisions they're making. And that's the piece of this that

809
00:44:24,000 --> 00:44:27,719
Speaker 1: we really can't lose sight of. Soger. Yeah, that's right.

810
00:44:27,800 --> 00:44:29,839
Speaker 1: And you know we're not the only ones we're talking

811
00:44:29,880 --> 00:44:32,920
Speaker 1: about this. As I alluded to, somebody who's got pretty

812
00:44:32,920 --> 00:44:36,120
Speaker 1: good political spidery senses is immediately going off form. Or

813
00:44:36,160 --> 00:44:39,040
Speaker 1: President Trump weighing in last night after taking a shot

814
00:44:39,040 --> 00:44:41,960
Speaker 1: at Ron DeSantis going after the Silicon Valley Bank bailout.

815
00:44:42,080 --> 00:44:44,160
Speaker 1: Let's take a listen to what he said. And would

816
00:44:44,160 --> 00:44:48,360
Speaker 1: you have supported the bailout of Silicon Valley Bank? Okay, ready,

817
00:44:48,640 --> 00:44:50,239
Speaker 1: I had a lot of questions you're asking me. I

818
00:44:50,239 --> 00:44:52,320
Speaker 1: wouldn't have supported the bailout. The bank would have to

819
00:44:52,320 --> 00:44:54,239
Speaker 1: get along by itself. And maybe they could have. What

820
00:44:54,280 --> 00:44:56,440
Speaker 1: happened with the bank's interest rates went too high. And

821
00:44:56,520 --> 00:44:58,480
Speaker 1: you know, I had my own situation with Powell, and

822
00:44:58,520 --> 00:45:00,520
Speaker 1: I beat the hell out of them. Was not a

823
00:45:00,560 --> 00:45:03,000
Speaker 1: big fan of pal He was recommended by some people.

824
00:45:03,000 --> 00:45:06,560
Speaker 1: I didn't like him. He's too interest rate happy. What

825
00:45:06,640 --> 00:45:09,120
Speaker 1: you do is you get the up prices down. That's

826
00:45:09,120 --> 00:45:11,480
Speaker 1: bigger than interest rates. The only thing. And what happened

827
00:45:11,520 --> 00:45:12,920
Speaker 1: is we took an oil and now we take an

828
00:45:12,960 --> 00:45:15,680
Speaker 1: interest rates. Those banks failed because the interest rates were

829
00:45:15,719 --> 00:45:18,400
Speaker 1: do they stupidly bought long term treasure is ten year treasures, Well,

830
00:45:18,400 --> 00:45:20,200
Speaker 1: they bought a long term longer than that even and

831
00:45:20,280 --> 00:45:23,040
Speaker 1: they bought a long term and those treasuries got crushed

832
00:45:23,040 --> 00:45:26,839
Speaker 1: because palal Key's raising interest rates. Shockingly good answer there

833
00:45:26,920 --> 00:45:30,120
Speaker 1: from for President Trump. He is right, he always was

834
00:45:30,200 --> 00:45:33,360
Speaker 1: against raising interest rates, specifically for this reason. He is

835
00:45:33,400 --> 00:45:35,399
Speaker 1: also correct that one of the best ways to bring

836
00:45:35,440 --> 00:45:39,319
Speaker 1: down inflation costs is by the supply side, not necessarily

837
00:45:39,360 --> 00:45:42,000
Speaker 1: on the demand side through the blood instrument of the

838
00:45:42,040 --> 00:45:46,239
Speaker 1: Federal Reserve. And then criticized Silicon Valley Bank specifically for

839
00:45:46,320 --> 00:45:49,640
Speaker 1: the way that they were managing their balance sheet. I

840
00:45:49,680 --> 00:45:52,640
Speaker 1: have to say that is the most substantive policy response

841
00:45:52,719 --> 00:45:55,960
Speaker 1: yet in the twenty twenty four campaign. Crystal, I have

842
00:45:56,040 --> 00:45:58,560
Speaker 1: not heard President Biden say a single word about this,

843
00:45:58,640 --> 00:46:03,319
Speaker 1: simply that the banking system is totally safe and sound. Yeah, no,

844
00:46:03,520 --> 00:46:05,560
Speaker 1: I mean on this one. Trump gets a lot of

845
00:46:05,600 --> 00:46:08,120
Speaker 1: things right. It's funny to see the horseshoe of like

846
00:46:08,200 --> 00:46:12,200
Speaker 1: basically like him and Elizabeth Warren having this deep hatred

847
00:46:12,400 --> 00:46:17,200
Speaker 1: for Jerome pal and deep critique of him. But the

848
00:46:17,280 --> 00:46:20,560
Speaker 1: thing that he gets at, you know, it's sort of

849
00:46:20,560 --> 00:46:22,759
Speaker 1: like confused what he says a little bit and not

850
00:46:22,880 --> 00:46:24,680
Speaker 1: like tell you have to like read the tea leaves

851
00:46:24,760 --> 00:46:27,000
Speaker 1: or read between the lines of what he actually means here.

852
00:46:27,400 --> 00:46:30,560
Speaker 1: But to the extent that he raises the issue of hey,

853
00:46:30,680 --> 00:46:34,000
Speaker 1: interest rates are not really getting at the problem that

854
00:46:34,040 --> 00:46:36,200
Speaker 1: you have here with regard to inflation, which is of

855
00:46:36,239 --> 00:46:40,480
Speaker 1: course something we've been talking about the whole time. Okay, inflation, Okay,

856
00:46:40,600 --> 00:46:43,440
Speaker 1: part of it might be dealt with with interest rates,

857
00:46:43,520 --> 00:46:47,520
Speaker 1: which means you're dealing with inflation just by crushing labor

858
00:46:47,640 --> 00:46:50,640
Speaker 1: and trying to spike unemployment. But the bulk of inflation

859
00:46:50,800 --> 00:46:53,879
Speaker 1: is being caused by corporate price gouging, being caused by

860
00:46:53,920 --> 00:46:57,200
Speaker 1: supply chain issues being caused by spiking food and energy

861
00:46:57,239 --> 00:47:00,359
Speaker 1: prices in part because of the war in Ukraine. Those

862
00:47:00,360 --> 00:47:02,840
Speaker 1: aren't the things that the FED can do anything about.

863
00:47:03,360 --> 00:47:07,120
Speaker 1: And lo and behold, even with what has been an

864
00:47:07,160 --> 00:47:12,120
Speaker 1: extraordinary period of interest rate hikes, it hasn't solved the problem.

865
00:47:12,360 --> 00:47:15,000
Speaker 1: There's a reason for that, because it's the wrong tool

866
00:47:15,120 --> 00:47:19,120
Speaker 1: to use. So not only is this instinct correct, I

867
00:47:19,120 --> 00:47:22,080
Speaker 1: think with regard to the FED, but obviously his political

868
00:47:22,160 --> 00:47:25,120
Speaker 1: instinct with regard to Silicon Valley Bank, a critique which

869
00:47:25,120 --> 00:47:27,000
Speaker 1: I you know, which I share in which I agree with,

870
00:47:27,440 --> 00:47:30,239
Speaker 1: is also spot on. It'll be interesting to see if

871
00:47:30,239 --> 00:47:32,520
Speaker 1: he leans into this, though, and I hadn't heard him

872
00:47:32,520 --> 00:47:35,399
Speaker 1: say anything about it before, so he didn't jump right

873
00:47:35,440 --> 00:47:38,000
Speaker 1: on top of it the way, for example, like Vivek

874
00:47:38,080 --> 00:47:40,440
Speaker 1: Ramaswami came out right away and was opposed to and

875
00:47:40,440 --> 00:47:42,560
Speaker 1: put out a Wall Street Journal ont bed. It'll be

876
00:47:42,600 --> 00:47:45,360
Speaker 1: interesting to see if he adds this to the litany

877
00:47:45,400 --> 00:47:48,880
Speaker 1: of issues that he really makes core to his campaign

878
00:47:49,040 --> 00:47:51,960
Speaker 1: in the way that he has, like Medicare and social security,

879
00:47:52,280 --> 00:47:55,840
Speaker 1: the Ukraine war, and then you know his like election

880
00:47:56,120 --> 00:47:59,440
Speaker 1: denial nonsense, So it'll be it would be quite something

881
00:47:59,480 --> 00:48:02,760
Speaker 1: if he had opted this as another core piece of

882
00:48:02,840 --> 00:48:06,680
Speaker 1: his you know, pseudo populist rhetoric at least. Right, Yeah,

883
00:48:07,080 --> 00:48:09,200
Speaker 1: I'm also interested in that, whether it was a one

884
00:48:09,239 --> 00:48:11,440
Speaker 1: off or whether it's something that he'll pick up on.

885
00:48:11,600 --> 00:48:13,799
Speaker 1: Most likely, if he sees a good response to it,

886
00:48:13,880 --> 00:48:16,360
Speaker 1: he will continue to pick up. So we'll see the

887
00:48:16,400 --> 00:48:19,200
Speaker 1: trial balloon. This one's a trial balloon at the very least.

888
00:48:20,320 --> 00:48:24,040
Speaker 1: It Yeah, at the very least. Let's let's get some interest. Yeah,

889
00:48:24,080 --> 00:48:27,240
Speaker 1: maybe we can get Look, maybe this qualifies mister president.

890
00:48:27,280 --> 00:48:30,160
Speaker 1: Please talk more about this and not cat turn poles,

891
00:48:30,160 --> 00:48:31,799
Speaker 1: although you should keep doing that because that is just

892
00:48:31,840 --> 00:48:35,160
Speaker 1: objectively funny. There's just no way of being around entertaining. Indeed,

893
00:48:35,160 --> 00:48:38,520
Speaker 1: absolutely all right, let's talk about this new poll from

894
00:48:38,640 --> 00:48:42,040
Speaker 1: Wall Street Journal, basically pouring gasoline on the fire of

895
00:48:42,040 --> 00:48:45,319
Speaker 1: the discourse. Absolutely fascinating. I spent a lot of time

896
00:48:45,400 --> 00:48:48,480
Speaker 1: yesterday talking about with Andrew Schultz on the Flagrant podcast

897
00:48:48,800 --> 00:48:51,480
Speaker 1: about this. Everybody kind of seems to have a take,

898
00:48:51,600 --> 00:48:53,759
Speaker 1: and I'm curious what yours is as well. So let's

899
00:48:53,760 --> 00:48:55,640
Speaker 1: go ahead and put it up there on the screen.

900
00:48:55,880 --> 00:48:59,440
Speaker 1: And it talks about how America pulls back from the

901
00:48:59,560 --> 00:49:02,600
Speaker 1: value us that once defined it. So let's go ahead

902
00:49:02,640 --> 00:49:04,839
Speaker 1: and actually put D two up there so people can

903
00:49:04,880 --> 00:49:07,200
Speaker 1: see the visual. I'll read it for everybody who is

904
00:49:07,320 --> 00:49:11,080
Speaker 1: just listening. Number one is patriotism. In nineteen ninety eight,

905
00:49:11,160 --> 00:49:14,800
Speaker 1: seventy percent of Americans consider themselves patriotic. Sixty one percent

906
00:49:14,840 --> 00:49:17,560
Speaker 1: said so. In twenty nineteen, only thirty eight percent say

907
00:49:17,640 --> 00:49:21,320
Speaker 1: in thirty thirty eight percent say so in twenty twenty three.

908
00:49:21,440 --> 00:49:24,520
Speaker 1: For religion, it was sixty two percent in nineteen ninety eight,

909
00:49:24,560 --> 00:49:27,319
Speaker 1: forty eight percent in twenty nineteen, thirty nine percent in

910
00:49:27,320 --> 00:49:30,520
Speaker 1: twenty twenty three. For having children, it's fifty nine percent

911
00:49:30,680 --> 00:49:33,719
Speaker 1: in nineteen ninety eight, down to thirty percent in twenty

912
00:49:33,800 --> 00:49:37,200
Speaker 1: twenty three. Community involvement was at forty seven actually spiked

913
00:49:37,239 --> 00:49:39,719
Speaker 1: in twenty nineteen to sixty two percent, but now down

914
00:49:39,719 --> 00:49:41,960
Speaker 1: to a record low of twenty seven percent. And then

915
00:49:42,000 --> 00:49:45,839
Speaker 1: finally money and in terms of what values are quote

916
00:49:45,960 --> 00:49:48,840
Speaker 1: very important to people, money has now gone from thirty

917
00:49:48,840 --> 00:49:52,880
Speaker 1: one percent to forty three percent. So my takeaway, Crystal,

918
00:49:53,160 --> 00:49:56,479
Speaker 1: was that it's easy to be patriotic. In nineteen ninety eight,

919
00:49:56,880 --> 00:50:01,960
Speaker 1: it's unipolar moment, no dot com bubble. You could buy

920
00:50:02,000 --> 00:50:04,600
Speaker 1: a house. You can basically sustain a family of four

921
00:50:04,760 --> 00:50:07,800
Speaker 1: on a single income, So who cares about money because

922
00:50:07,840 --> 00:50:09,680
Speaker 1: money isn't actually all that relevant to your life. You

923
00:50:09,680 --> 00:50:13,440
Speaker 1: actually are becoming basically rich or richer by participating in

924
00:50:13,480 --> 00:50:16,640
Speaker 1: general society. Wage inflation had gone down, but it wasn't

925
00:50:16,640 --> 00:50:20,080
Speaker 1: necessarily know even close to how bad it's gotten now. Also,

926
00:50:20,320 --> 00:50:23,200
Speaker 1: my takeaway too was that I think that people are

927
00:50:23,280 --> 00:50:27,080
Speaker 1: viewing this clearly through a left phenomenon, but in reality,

928
00:50:27,160 --> 00:50:29,480
Speaker 1: if you look at where the major drop in patriotism

929
00:50:29,520 --> 00:50:31,680
Speaker 1: comes from, a lot of it also comes from the right.

930
00:50:31,920 --> 00:50:33,839
Speaker 1: And part of the reason why I think that is

931
00:50:33,840 --> 00:50:38,360
Speaker 1: is we have dual narratives of catastrophes that are happening.

932
00:50:38,400 --> 00:50:41,000
Speaker 1: So clearly, you know, while Trump was president, we had

933
00:50:41,000 --> 00:50:43,160
Speaker 1: a decline in patriotism because people said, I can't even

934
00:50:43,239 --> 00:50:45,719
Speaker 1: believe that America would elect somebody like Donald Trump. But

935
00:50:45,760 --> 00:50:48,080
Speaker 1: if you are a Republican, especially a Mago type believer,

936
00:50:48,440 --> 00:50:52,040
Speaker 1: you literally believe that the election was stolen from Donald Trump.

937
00:50:52,120 --> 00:50:54,400
Speaker 1: So how can you then believe in your country you

938
00:50:54,440 --> 00:50:58,080
Speaker 1: have a dual kind of catastrophizing that is happening, where

939
00:50:58,160 --> 00:51:00,239
Speaker 1: you have lack of faith in the country's most basic

940
00:51:00,320 --> 00:51:03,000
Speaker 1: institutions from both right and left in a lot of ways,

941
00:51:03,080 --> 00:51:05,760
Speaker 1: really the only thing you really unites us at all anymore.

942
00:51:06,400 --> 00:51:08,719
Speaker 1: On top of that, religion has been going down now

943
00:51:08,920 --> 00:51:11,719
Speaker 1: for decades. But I think a money piece and the

944
00:51:11,760 --> 00:51:15,120
Speaker 1: increase of money is not just about the rise of individualism.

945
00:51:15,160 --> 00:51:17,040
Speaker 1: It's about how much you actually do have to care

946
00:51:17,080 --> 00:51:19,759
Speaker 1: about money today just to get by, Whereas in the

947
00:51:19,800 --> 00:51:22,080
Speaker 1: past it's not something that would have been very important

948
00:51:22,120 --> 00:51:24,600
Speaker 1: to you, when it would have been something where it

949
00:51:24,840 --> 00:51:27,040
Speaker 1: was more of a foregone conclusion where you'd be able

950
00:51:27,080 --> 00:51:29,200
Speaker 1: to participate and foster all of these other things. We

951
00:51:29,239 --> 00:51:31,959
Speaker 1: already know that the main hindrance to people getting married

952
00:51:32,000 --> 00:51:34,839
Speaker 1: today is money. Also to having children. People are having

953
00:51:34,920 --> 00:51:37,280
Speaker 1: less children than they want to, and the main reason

954
00:51:37,280 --> 00:51:39,320
Speaker 1: that they cite is that it's too expensive. I believe

955
00:51:39,320 --> 00:51:41,799
Speaker 1: the average childbirth is some thirty one thousand dollars or

956
00:51:41,840 --> 00:51:43,399
Speaker 1: something here in the US, on top of the one

957
00:51:43,440 --> 00:51:45,839
Speaker 1: million dollars or so that it costs if you want

958
00:51:45,880 --> 00:51:47,880
Speaker 1: to send a child to college, and I think at

959
00:51:47,880 --> 00:51:50,560
Speaker 1: two hundred fifty thousand dollars just for raising somebody up

960
00:51:50,680 --> 00:51:52,640
Speaker 1: through eighteen years old. I mean, this is not a

961
00:51:53,400 --> 00:51:56,600
Speaker 1: not a small cost that a lot of these families

962
00:51:56,760 --> 00:52:00,080
Speaker 1: are incurring here, and the reality of even trying to

963
00:52:00,160 --> 00:52:01,880
Speaker 1: buy a house or any of the foundational types of

964
00:52:01,880 --> 00:52:03,880
Speaker 1: things are now so out of reach that money has

965
00:52:03,920 --> 00:52:08,640
Speaker 1: to become more important. What do you think, Yeah, I mean, look,

966
00:52:08,760 --> 00:52:12,960
Speaker 1: I think on a basic level, our economy is supposed

967
00:52:12,960 --> 00:52:16,239
Speaker 1: to serve the people, and our government is supposed to

968
00:52:16,280 --> 00:52:20,560
Speaker 1: serve the people, and instead both our economy and our

969
00:52:20,600 --> 00:52:25,920
Speaker 1: government serve a handful of elites. So of course, when

970
00:52:26,320 --> 00:52:30,799
Speaker 1: you feel like the societal institutions that are supposed to

971
00:52:30,840 --> 00:52:33,759
Speaker 1: have your back don't, what's that going to lead to

972
00:52:33,840 --> 00:52:36,080
Speaker 1: among a certain group of people, It's going to lead

973
00:52:36,120 --> 00:52:39,560
Speaker 1: to a well, I just got to get mindset. And

974
00:52:39,680 --> 00:52:42,279
Speaker 1: so I think that's where you see the rise in

975
00:52:42,880 --> 00:52:45,680
Speaker 1: money being all important, which of course is a core

976
00:52:45,800 --> 00:52:49,800
Speaker 1: sort of value of neoliberalism anyway, putting profits and cash

977
00:52:49,880 --> 00:52:54,680
Speaker 1: maximization over everything else. And then also it makes sense

978
00:52:54,719 --> 00:52:57,920
Speaker 1: in terms of decline of patriotism if the government doesn't

979
00:52:57,920 --> 00:53:00,440
Speaker 1: reflect you, doesn't serve you, if the institute of the

980
00:53:00,440 --> 00:53:02,880
Speaker 1: economy don't reflect you and don't serve you, which you

981
00:53:02,880 --> 00:53:04,720
Speaker 1: know makes sense. Coming on the heels of the Silicon

982
00:53:04,800 --> 00:53:08,359
Speaker 1: Valley bail out discussion we just had. It's quite relevant. Yeah,

983
00:53:08,360 --> 00:53:11,360
Speaker 1: why would you feel patriotic about a country that isn't

984
00:53:11,400 --> 00:53:14,120
Speaker 1: doesn't seem to be there for you? And Matt Stoller

985
00:53:14,239 --> 00:53:16,479
Speaker 1: made this point that I thought was pretty profound. Let's

986
00:53:16,480 --> 00:53:20,640
Speaker 1: put his his analysis up on the screen. Here his

987
00:53:20,680 --> 00:53:22,640
Speaker 1: tweet that he put out. Go ahead and throw this

988
00:53:22,760 --> 00:53:24,479
Speaker 1: up on the screen, guys, you can see a chart.

989
00:53:25,080 --> 00:53:28,640
Speaker 1: He says, these two phenomenon are causal. America is in

990
00:53:28,680 --> 00:53:32,440
Speaker 1: a mass die off. So Americans have become much less patriotic.

991
00:53:32,520 --> 00:53:35,680
Speaker 1: When your country's systems end up killing your friends and family,

992
00:53:36,000 --> 00:53:39,319
Speaker 1: you tend to lose your faith. And what he shows is,

993
00:53:39,400 --> 00:53:42,960
Speaker 1: you know the grass we already showed you from this poll.

994
00:53:43,320 --> 00:53:47,799
Speaker 1: But he also has here the decline in life expectancy

995
00:53:48,239 --> 00:53:51,759
Speaker 1: that we have seen in the United States over decades

996
00:53:51,960 --> 00:53:55,200
Speaker 1: and as compared to other nations. So this is a

997
00:53:55,360 --> 00:53:58,759
Speaker 1: US specific phenomenon. Now it was accelerated by COVID, But

998
00:53:58,840 --> 00:54:02,160
Speaker 1: a lot of the underling things we've covered at nauseum

999
00:54:02,320 --> 00:54:04,480
Speaker 1: Sager has to do with a lot of death to despair,

1000
00:54:04,920 --> 00:54:08,640
Speaker 1: the fact that you have these mass addiction crises. But

1001
00:54:08,840 --> 00:54:11,480
Speaker 1: I think Derek Thompson has also talked about how it's

1002
00:54:11,560 --> 00:54:14,399
Speaker 1: a whole range of issues where Americans are more likely

1003
00:54:14,440 --> 00:54:19,719
Speaker 1: to die than their compatriots and other nations. So yeah,

1004
00:54:19,719 --> 00:54:21,839
Speaker 1: it doesn't surprise me to see that people don't feel

1005
00:54:21,880 --> 00:54:24,680
Speaker 1: too great about the country when that's the landscape. I'm

1006
00:54:24,719 --> 00:54:26,879
Speaker 1: reminded of a book I read a while ago, maybe

1007
00:54:26,880 --> 00:54:30,440
Speaker 1: in like twenty fifteen, twenty sixteen, about the American Dream

1008
00:54:30,640 --> 00:54:33,800
Speaker 1: and how it was being interpreted, especially by white working

1009
00:54:33,840 --> 00:54:37,080
Speaker 1: class voters in and around Youngstown. Is written by a

1010
00:54:37,200 --> 00:54:40,920
Speaker 1: researcher named Justin Guest. It's called I Think the New Minority.

1011
00:54:40,960 --> 00:54:44,440
Speaker 1: I really recommend it, and he interviewed a bunch of

1012
00:54:44,680 --> 00:54:48,680
Speaker 1: white working class voters about how they felt about the

1013
00:54:48,719 --> 00:54:51,759
Speaker 1: American Dream, and they thought it was dead, you know.

1014
00:54:51,880 --> 00:54:54,080
Speaker 1: They thought, like this idea that you work hard and

1015
00:54:54,120 --> 00:54:56,680
Speaker 1: you get ahead, this is nonsense. This does not reflect

1016
00:54:56,880 --> 00:54:59,640
Speaker 1: my life. And these were people, many of whom their

1017
00:54:59,640 --> 00:55:02,760
Speaker 1: father or their grandfathers had been able to get solid

1018
00:55:02,960 --> 00:55:06,160
Speaker 1: middle class union jobs, been able to have the family,

1019
00:55:06,400 --> 00:55:08,319
Speaker 1: been able to have the house, been able to have

1020
00:55:08,360 --> 00:55:11,920
Speaker 1: some vacation time every year, and then they had watched

1021
00:55:11,960 --> 00:55:17,440
Speaker 1: the standard of living in their area thanks to de industrialization, decline.

1022
00:55:17,640 --> 00:55:20,800
Speaker 1: Just over their lifetime, so they weren't able to achieve

1023
00:55:21,040 --> 00:55:24,799
Speaker 1: the basics of middle class stability that their father or

1024
00:55:24,840 --> 00:55:29,839
Speaker 1: grandfather was able to obtain. So yeah, when I think

1025
00:55:29,880 --> 00:55:32,520
Speaker 1: you have that feeling of like, you know, this American

1026
00:55:32,600 --> 00:55:34,880
Speaker 1: dream is just a load of croc and this country

1027
00:55:34,920 --> 00:55:37,759
Speaker 1: doesn't have my interest at heart, of course you're going

1028
00:55:37,800 --> 00:55:39,839
Speaker 1: to see these kind of trends. Yeah, and I also

1029
00:55:39,840 --> 00:55:43,680
Speaker 1: think there's just a broader malaise. I mean, you know,

1030
00:55:43,800 --> 00:55:46,640
Speaker 1: you and I were like in the millennial generation. We

1031
00:55:46,760 --> 00:55:49,040
Speaker 1: really have not known in a time in our adult

1032
00:55:49,080 --> 00:55:53,319
Speaker 1: lives of no war and no financial crisis. Like if

1033
00:55:53,360 --> 00:55:56,880
Speaker 1: you lived through like that nineteen ninety eight number, if

1034
00:55:56,920 --> 00:55:59,040
Speaker 1: I was my age then so it'd be thirty years

1035
00:55:59,040 --> 00:56:02,160
Speaker 1: old and nineteen ninety eight, then the Vietnam War was

1036
00:56:02,200 --> 00:56:04,799
Speaker 1: basically over by the time I was like eight years old.

1037
00:56:05,400 --> 00:56:08,040
Speaker 1: Then you had the unipolar moment. Yeah, the seventies were

1038
00:56:08,080 --> 00:56:10,720
Speaker 1: pretty bad, but the eighties were pretty nice, and then

1039
00:56:10,960 --> 00:56:14,040
Speaker 1: the nineties were so awesome in terms of mass culture,

1040
00:56:14,360 --> 00:56:17,080
Speaker 1: in terms of money, the economic boom there was, yeah,

1041
00:56:17,080 --> 00:56:19,560
Speaker 1: I guess like the nineteen eighty two depression, but you know,

1042
00:56:19,600 --> 00:56:21,560
Speaker 1: the biggest problem in the nineteen ninety eight was that

1043
00:56:21,640 --> 00:56:23,880
Speaker 1: the president got a blowjob in the Oval office and

1044
00:56:23,960 --> 00:56:26,160
Speaker 1: lied about it and it was still out of sixty

1045
00:56:26,200 --> 00:56:29,680
Speaker 1: two percent approval rating when all of that was happening,

1046
00:56:29,800 --> 00:56:32,520
Speaker 1: Just showing like how unserious so much of our politics

1047
00:56:32,520 --> 00:56:35,080
Speaker 1: were at that time, Like why wouldn't you have some

1048
00:56:35,440 --> 00:56:38,239
Speaker 1: high level of patriotism? Would we would wish for the

1049
00:56:38,239 --> 00:56:40,520
Speaker 1: problems of nineteen ninety eight Today we had like a

1050
00:56:40,520 --> 00:56:43,000
Speaker 1: budget surplus, right, you know, it's like all these things

1051
00:56:43,160 --> 00:56:45,319
Speaker 1: that were happening that you can't even imagine, and so

1052
00:56:46,120 --> 00:56:49,840
Speaker 1: compare then to compare now of course, same with the housing.

1053
00:56:50,040 --> 00:56:52,000
Speaker 1: You know, I think housing is just so foundational to it.

1054
00:56:52,000 --> 00:56:54,280
Speaker 1: You and I see it so much in our audience

1055
00:56:54,320 --> 00:56:56,480
Speaker 1: as well. Nineteen ninety eight, a starter home was not

1056
00:56:56,560 --> 00:56:58,320
Speaker 1: outside of your reach. Starter home that was built in

1057
00:56:58,400 --> 00:57:00,600
Speaker 1: nineteen seventy You could buy a second hand on the market,

1058
00:57:00,920 --> 00:57:03,000
Speaker 1: not for that much money, with a decent interest rate,

1059
00:57:03,000 --> 00:57:05,600
Speaker 1: with an income that you could easily pay for. You know,

1060
00:57:05,600 --> 00:57:07,359
Speaker 1: I think about somebody like my parents who moved here

1061
00:57:07,360 --> 00:57:09,560
Speaker 1: to this country in nineteen ninety eight or nineteen eighty eight,

1062
00:57:10,080 --> 00:57:12,560
Speaker 1: very easily, you know, moved from condo to you know,

1063
00:57:12,760 --> 00:57:16,880
Speaker 1: modest house, decent neighborhood be able to you know, relatively,

1064
00:57:17,120 --> 00:57:18,960
Speaker 1: you know, it was safe. You get to ride the

1065
00:57:18,960 --> 00:57:21,080
Speaker 1: school bus, you don't have to worry about anything. You

1066
00:57:21,120 --> 00:57:23,520
Speaker 1: go to school, and your schools are pretty good. And

1067
00:57:23,240 --> 00:57:26,280
Speaker 1: that was a very common reality of life for a

1068
00:57:26,320 --> 00:57:27,920
Speaker 1: lot of people, and that's just gone. This just really

1069
00:57:27,960 --> 00:57:30,520
Speaker 1: doesn't exist for people who are my age, or even

1070
00:57:30,560 --> 00:57:33,240
Speaker 1: anybody who's coming to this country now today. So it's

1071
00:57:33,240 --> 00:57:35,600
Speaker 1: one of those where, yeah, the American dream is alive

1072
00:57:35,640 --> 00:57:39,080
Speaker 1: and well for people at the upper echelons of society,

1073
00:57:39,080 --> 00:57:42,200
Speaker 1: they've actually gotten richer, literally than ever. But for everybody,

1074
00:57:42,280 --> 00:57:44,480
Speaker 1: if you lost your house, in my favorite stat on this,

1075
00:57:44,800 --> 00:57:47,200
Speaker 1: you know, for everybody who has any assets or whatever,

1076
00:57:47,360 --> 00:57:49,680
Speaker 1: is if you did not sell your house or any

1077
00:57:49,720 --> 00:57:51,480
Speaker 1: of your assets in two thousand and eight and you

1078
00:57:51,520 --> 00:57:54,120
Speaker 1: waited a decade, you not only made money, you know,

1079
00:57:54,200 --> 00:57:57,400
Speaker 1: on that trade by doing nothing, your house dramatically appreciated

1080
00:57:57,440 --> 00:58:00,680
Speaker 1: in value. But the people who lost that, who never

1081
00:58:00,720 --> 00:58:03,560
Speaker 1: had the ability to hang onto anything, basically had nothing

1082
00:58:03,560 --> 00:58:06,720
Speaker 1: already in the system. They became dramatically poor. So the

1083
00:58:06,800 --> 00:58:11,240
Speaker 1: why the gap between rich and poor expanded more than

1084
00:58:11,280 --> 00:58:14,000
Speaker 1: we can ever really imagine in that decade after two

1085
00:58:14,040 --> 00:58:17,480
Speaker 1: thousand and eight. That's why President Trump became president, in

1086
00:58:17,520 --> 00:58:20,200
Speaker 1: my opinion, for a lot of these reasons. And that's

1087
00:58:20,200 --> 00:58:21,920
Speaker 1: why I think it comes to the heart of so

1088
00:58:22,040 --> 00:58:25,120
Speaker 1: much our political and some of our political and economic

1089
00:58:25,120 --> 00:58:28,080
Speaker 1: problems that we have today. It's really sad. It's sad,

1090
00:58:28,120 --> 00:58:30,840
Speaker 1: and it causes a lot of nihilism too. So I

1091
00:58:30,840 --> 00:58:32,880
Speaker 1: hope that it can be reversed. But you know, we

1092
00:58:32,880 --> 00:58:35,320
Speaker 1: had that discussion with Tim Urban yesterday. I'm not so

1093
00:58:35,360 --> 00:58:36,760
Speaker 1: sure I think he was right. I think we are

1094
00:58:36,800 --> 00:58:38,520
Speaker 1: in the whirlpool. Like I think Trump is just the

1095
00:58:38,560 --> 00:58:40,440
Speaker 1: first part of our problems. It's going to be a

1096
00:58:40,440 --> 00:58:44,880
Speaker 1: long way. It's hard to say. I mean, you know,

1097
00:58:45,920 --> 00:58:48,840
Speaker 1: things can change, dynamics can shift. There's no doubt we're

1098
00:58:48,840 --> 00:58:52,120
Speaker 1: in a sort of like chaotic searching period. I think

1099
00:58:52,160 --> 00:58:55,320
Speaker 1: that's really clear. You know, in a sense, I feel

1100
00:58:55,320 --> 00:58:58,640
Speaker 1: like the declining numbers in patriotism are actually kind of

1101
00:58:58,680 --> 00:59:02,880
Speaker 1: a sign of health in terms of the way the

1102
00:59:02,880 --> 00:59:08,000
Speaker 1: American people are viewing the betrayal of them by both

1103
00:59:08,040 --> 00:59:13,200
Speaker 1: the government and by the you know, economic institutions. Because

1104
00:59:13,440 --> 00:59:17,600
Speaker 1: just having blind patriotism, I don't consider that. I don't

1105
00:59:17,680 --> 00:59:20,160
Speaker 1: consider that a positive thing. I think it's good that

1106
00:59:20,200 --> 00:59:23,360
Speaker 1: there's a recognition that this system has failed in some

1107
00:59:23,440 --> 00:59:27,880
Speaker 1: really key and bedrock type of ways. That can be

1108
00:59:28,000 --> 00:59:31,760
Speaker 1: a positive impetus for change. So in that way, I

1109
00:59:31,800 --> 00:59:35,200
Speaker 1: see a sort of silver lining here, because you're right.

1110
00:59:35,240 --> 00:59:37,320
Speaker 1: You know, we talk about inflation in the context of

1111
00:59:37,440 --> 00:59:40,480
Speaker 1: just the past year or two, but the reality is

1112
00:59:40,560 --> 00:59:46,720
Speaker 1: the basic bedrocks of a middle class life, housing, education,

1113
00:59:47,280 --> 00:59:52,919
Speaker 1: and healthcare have dramatically escalated in cost as to be

1114
00:59:53,160 --> 00:59:57,920
Speaker 1: wildly unaffordable for so many a majority of Americans, and

1115
00:59:58,240 --> 01:00:02,200
Speaker 1: those are kind of the key marks of the a stable,

1116
01:00:02,560 --> 01:00:07,040
Speaker 1: non precarious middle class life. So the American people have

1117
01:00:07,120 --> 01:00:12,520
Speaker 1: been suffering under brutal escalating costs for decades now that have,

1118
01:00:13,080 --> 01:00:16,160
Speaker 1: you know, put stability out of reach for so many.

1119
01:00:16,200 --> 01:00:18,320
Speaker 1: And that's why when you dig into these numbers about

1120
01:00:18,360 --> 01:00:21,840
Speaker 1: patriotism and community involvement and all these other things, the

1121
01:00:21,960 --> 01:00:26,160
Speaker 1: places you see the largest declines are among young people because,

1122
01:00:26,200 --> 01:00:29,680
Speaker 1: like you said, Zagar, they've never known another world. But basically,

1123
01:00:29,720 --> 01:00:32,800
Speaker 1: people my age and younger have never known a different

1124
01:00:32,800 --> 01:00:35,840
Speaker 1: world that wasn't you know, Bush invading a rock on

1125
01:00:35,920 --> 01:00:40,640
Speaker 1: a mountain of lies and media betrayals and societal institutional

1126
01:00:41,240 --> 01:00:47,400
Speaker 1: institutional failures and financial collapse and escalating crises. You know,

1127
01:00:47,520 --> 01:00:50,600
Speaker 1: that's been the world that we've existed in. So it's

1128
01:00:50,640 --> 01:00:52,919
Speaker 1: not a surprise that there's been a sort of radicalization.

1129
01:00:52,960 --> 01:00:56,880
Speaker 1: It's entirely to me, it's an entirely rational response to

1130
01:00:57,040 --> 01:01:00,919
Speaker 1: the set of circumstances that we face. Yeah, I think

1131
01:01:00,920 --> 01:01:04,560
Speaker 1: that's very well said. All right, let's get to Matt Tayeb. Yeah,

1132
01:01:04,600 --> 01:01:08,680
Speaker 1: so this is a wild story. You all will recall

1133
01:01:08,760 --> 01:01:11,720
Speaker 1: that journalist Matt Tayeb who covered a bunch of the

1134
01:01:12,000 --> 01:01:15,840
Speaker 1: Twitter files, you know, with regard to the Elon Musk releases,

1135
01:01:16,000 --> 01:01:19,280
Speaker 1: and testified in front of Congress recently as part of

1136
01:01:19,320 --> 01:01:23,360
Speaker 1: that like weaponization of government hearings. On the day that

1137
01:01:23,440 --> 01:01:25,920
Speaker 1: he was testifying, put this up on the screen, This

1138
01:01:26,000 --> 01:01:29,320
Speaker 1: from the Wall Street Journal. Apparently an I R S

1139
01:01:29,440 --> 01:01:33,560
Speaker 1: agent showed up at his house on that day. Now,

1140
01:01:33,560 --> 01:01:36,480
Speaker 1: this is a tweet from Michael Scheltenberger, who's another journalist

1141
01:01:36,480 --> 01:01:38,280
Speaker 1: who's been covering the Twitter files. He says, well, Matt

1142
01:01:38,240 --> 01:01:41,360
Speaker 1: Taybe and I were testifying before Congress on the weaponization

1143
01:01:41,560 --> 01:01:44,960
Speaker 1: of the federal government. An I R S agent showed

1144
01:01:45,040 --> 01:01:48,240
Speaker 1: up at his house, and he says what an amazing coincidence,

1145
01:01:49,440 --> 01:01:52,080
Speaker 1: you know from the Wall Street Journal report here, and

1146
01:01:52,240 --> 01:01:53,680
Speaker 1: I think we have that we can put up on

1147
01:01:53,720 --> 01:01:57,120
Speaker 1: the screen. How Judiciary Chair Jim Jordan has now set

1148
01:01:57,160 --> 01:02:01,760
Speaker 1: a letter to the I R S on Monday demanding

1149
01:02:01,840 --> 01:02:07,240
Speaker 1: answers about why exactly this happened, because listen, I have

1150
01:02:07,360 --> 01:02:10,640
Speaker 1: been audited before. This is not the way that it works. Yes,

1151
01:02:10,800 --> 01:02:13,720
Speaker 1: IRS agents don't just like show up at your doorstep.

1152
01:02:13,840 --> 01:02:15,720
Speaker 1: You get a letter in the mail that says, hey,

1153
01:02:15,760 --> 01:02:17,919
Speaker 1: you need to contact us, and then you go through

1154
01:02:17,920 --> 01:02:21,760
Speaker 1: a process. But never has have I ever had a

1155
01:02:21,800 --> 01:02:25,240
Speaker 1: situation where an IRS agent actually knocks on your door

1156
01:02:26,120 --> 01:02:30,160
Speaker 1: demanding answers. So and it was an unannounced visit. So

1157
01:02:30,360 --> 01:02:35,320
Speaker 1: it really is a troubling development here well, and some

1158
01:02:35,360 --> 01:02:38,240
Speaker 1: of the details relayed directly to his work over at Substacks,

1159
01:02:38,280 --> 01:02:40,640
Speaker 1: says the taxman left a note to mister Tayibi to

1160
01:02:40,640 --> 01:02:42,960
Speaker 1: call the IRS. Four days later, Taibi was told in

1161
01:02:43,000 --> 01:02:45,640
Speaker 1: a call with the agent. In twenty eighteen and twenty

1162
01:02:45,680 --> 01:02:49,120
Speaker 1: twenty one tax returns were rejected owing to concerns about

1163
01:02:49,320 --> 01:02:53,200
Speaker 1: so called identity theft. Tayib has provided the committee with

1164
01:02:53,240 --> 01:02:56,840
Speaker 1: documentation showing that his twenty eighteen return had already been

1165
01:02:57,240 --> 01:03:01,439
Speaker 1: electronically accepted, and says that the IRS never notified him

1166
01:03:01,920 --> 01:03:04,960
Speaker 1: or his accountants of a problem after he filed that

1167
01:03:04,960 --> 01:03:09,240
Speaker 1: twenty eighteen return more than four and a half years ago.

1168
01:03:09,560 --> 01:03:13,240
Speaker 1: The IRS initially rejected his twenty twenty one return, which

1169
01:03:13,280 --> 01:03:16,320
Speaker 1: he later then refiled. It was rejected again even though

1170
01:03:16,360 --> 01:03:19,760
Speaker 1: he was accountants refiled it with an IRS provided pin number,

1171
01:03:19,920 --> 01:03:22,480
Speaker 1: notes that in neither case was the issue monetary, and

1172
01:03:22,520 --> 01:03:26,120
Speaker 1: that the IRS actually owes him a considerable amount of money.

1173
01:03:26,840 --> 01:03:30,080
Speaker 1: So the bigger question is when did the IRS start

1174
01:03:30,080 --> 01:03:34,080
Speaker 1: dispassing agents for surprise house calls. By the way, Chrystal,

1175
01:03:34,160 --> 01:03:35,800
Speaker 1: you and I are currently could use a call back

1176
01:03:35,840 --> 01:03:39,040
Speaker 1: from the IRS. So that would be nice in terms

1177
01:03:39,040 --> 01:03:41,800
Speaker 1: of actually getting some service for trying to run a

1178
01:03:41,800 --> 01:03:44,320
Speaker 1: small business and do it legally here. You know, it's

1179
01:03:44,480 --> 01:03:48,400
Speaker 1: actually much harder than you might imagine. And yet apparently

1180
01:03:48,760 --> 01:03:52,720
Speaker 1: whenever you go and you testify before Congress and you

1181
01:03:52,840 --> 01:03:56,360
Speaker 1: call out the actions of maybe the National Security State

1182
01:03:56,680 --> 01:04:00,880
Speaker 1: and exposed some pretty troubling and some interesting things, Oh

1183
01:04:01,000 --> 01:04:04,360
Speaker 1: then the tax man just comes to your house on

1184
01:04:04,400 --> 01:04:08,000
Speaker 1: that very same day. Look, as you said, these this

1185
01:04:08,160 --> 01:04:11,480
Speaker 1: is unprecedented people don't just show up at your house

1186
01:04:11,880 --> 01:04:15,120
Speaker 1: completely unannounced. That's crazy. You know, we can barely get

1187
01:04:15,120 --> 01:04:17,720
Speaker 1: a freaking letter back from these people, so to have

1188
01:04:18,720 --> 01:04:22,240
Speaker 1: resources to dispatch somebody directly to your personal residence without

1189
01:04:22,240 --> 01:04:24,880
Speaker 1: a heads up. Also, you know, from what we can

1190
01:04:24,880 --> 01:04:27,520
Speaker 1: see here, you engage a professional accounting firm. They didn't

1191
01:04:27,520 --> 01:04:29,960
Speaker 1: even engage with the professional tax professional, so it would

1192
01:04:29,960 --> 01:04:32,840
Speaker 1: have been the people to contact in this regardless. So

1193
01:04:33,240 --> 01:04:36,800
Speaker 1: all of this just smells so fishy, and I think

1194
01:04:36,800 --> 01:04:38,760
Speaker 1: this could be a real problem. I mean, there's to

1195
01:04:38,800 --> 01:04:42,560
Speaker 1: the idea that it was not political or so that

1196
01:04:42,600 --> 01:04:46,680
Speaker 1: it was not politically motivated, just seems incredibly hard to

1197
01:04:46,840 --> 01:04:51,240
Speaker 1: believe such a both incredible coincidence the exact nature of

1198
01:04:51,320 --> 01:04:54,760
Speaker 1: what's already happening here in this case. And look, I

1199
01:04:54,800 --> 01:04:57,080
Speaker 1: hope that they actually do get to the bottom of it,

1200
01:04:57,120 --> 01:04:59,120
Speaker 1: because this is exactly the type of stuff that the

1201
01:04:59,200 --> 01:05:02,800
Speaker 1: Nixon administration used to do and threatened, specifically about the

1202
01:05:02,840 --> 01:05:05,840
Speaker 1: Washington Post Company and others whenever they were exposing the

1203
01:05:05,880 --> 01:05:07,760
Speaker 1: Pentagon papers. You can go back and read it if

1204
01:05:07,760 --> 01:05:09,800
Speaker 1: you want to. They also consider doing the same thing

1205
01:05:09,960 --> 01:05:12,880
Speaker 1: to Daniel Ellsberg. This is literally all on tape so

1206
01:05:12,960 --> 01:05:15,680
Speaker 1: it is not outside the realm of possibility for how

1207
01:05:15,680 --> 01:05:18,280
Speaker 1: a White House or for how the executive branch lashes

1208
01:05:18,280 --> 01:05:20,560
Speaker 1: out at people that they view as political enemies, and

1209
01:05:20,560 --> 01:05:26,760
Speaker 1: specifically at journalists. Yeah, it's really just bizarre and deeply disturbing.

1210
01:05:27,080 --> 01:05:29,280
Speaker 1: What did you make of I didn't really understand the

1211
01:05:29,320 --> 01:05:32,200
Speaker 1: piece where they said it was related to identity theft

1212
01:05:32,560 --> 01:05:34,400
Speaker 1: you what did you make of that? Yeah, I mean,

1213
01:05:34,480 --> 01:05:36,920
Speaker 1: I guess it could be what it could be one

1214
01:05:36,920 --> 01:05:39,440
Speaker 1: of those where somebody had stolen his identity before and

1215
01:05:39,480 --> 01:05:42,240
Speaker 1: you provide it to additional documentation. Sometimes people do that,

1216
01:05:42,280 --> 01:05:45,280
Speaker 1: I know, whenever they try to steal people's like tax returns,

1217
01:05:45,560 --> 01:05:48,200
Speaker 1: or whenever they try to steal people's what do they

1218
01:05:48,200 --> 01:05:52,840
Speaker 1: called the whatever, this surplus of whatever that you you

1219
01:05:52,880 --> 01:05:55,400
Speaker 1: paid that they'll give you the refund. I try to

1220
01:05:55,480 --> 01:05:59,080
Speaker 1: refund right the tax refund that I know that people

1221
01:05:59,120 --> 01:06:00,800
Speaker 1: have tried in the past and have done that. That's

1222
01:06:00,880 --> 01:06:03,640
Speaker 1: part of the concern about identity that. The crazy part though,

1223
01:06:03,680 --> 01:06:05,920
Speaker 1: as he says, is that why are they contesting in

1224
01:06:05,960 --> 01:06:08,760
Speaker 1: twenty eighteen return from four and a half years ago.

1225
01:06:09,040 --> 01:06:12,240
Speaker 1: You know that's from especially at the federal level. And

1226
01:06:12,480 --> 01:06:15,080
Speaker 1: again he asked professional tax council that he is engaged here,

1227
01:06:15,120 --> 01:06:17,440
Speaker 1: who seemingly, you know, would have been on top of this.

1228
01:06:17,520 --> 01:06:20,120
Speaker 1: So anyway, I'm looking at all this fitchy as hell.

1229
01:06:20,400 --> 01:06:23,160
Speaker 1: They don't just come to your house. It's complete. Especially

1230
01:06:23,440 --> 01:06:25,880
Speaker 1: this is also open sort. It's not just us. Small

1231
01:06:25,920 --> 01:06:30,280
Speaker 1: businesses are struggling dramatically and actually getting response time back

1232
01:06:30,320 --> 01:06:33,000
Speaker 1: from the IRS on their filings. It was one of

1233
01:06:33,040 --> 01:06:35,760
Speaker 1: the reasons that the Biden administration said we needed more

1234
01:06:35,800 --> 01:06:38,760
Speaker 1: agents was to process that backlog. Again, You and I

1235
01:06:38,760 --> 01:06:41,280
Speaker 1: are literally actually stuck in some of that backlog. But

1236
01:06:41,520 --> 01:06:44,320
Speaker 1: he's getting people getting set to his house. So how

1237
01:06:44,360 --> 01:06:48,560
Speaker 1: does that work. It's totally crazy. It's such a great

1238
01:06:48,600 --> 01:06:50,720
Speaker 1: I didn't even think about it in terms of our context.

1239
01:06:50,800 --> 01:06:53,240
Speaker 1: But yeah, we've been waiting for like a response back

1240
01:06:53,280 --> 01:06:55,760
Speaker 1: to just the basic like structure of our business for

1241
01:06:56,760 --> 01:06:59,800
Speaker 1: over a year. But they've got the resources to send

1242
01:06:59,800 --> 01:07:03,280
Speaker 1: some and directly to Matt Diebe's doorstep, right, very very

1243
01:07:03,360 --> 01:07:06,040
Speaker 1: eyebrow raising, I will just say that, Yeah, by the way,

1244
01:07:06,040 --> 01:07:09,520
Speaker 1: if anybody's watching, we would level response back. It actually

1245
01:07:09,520 --> 01:07:11,360
Speaker 1: would clear up a lot of headaches. Come to our

1246
01:07:11,400 --> 01:07:14,320
Speaker 1: doorsteps on the audio, Please come to my doorstep and

1247
01:07:14,440 --> 01:07:18,320
Speaker 1: resolve problems so that we can run our business anyways. Yeah,

1248
01:07:18,520 --> 01:07:22,240
Speaker 1: our own personal problems aside, So there you go. Anyway,

1249
01:07:22,400 --> 01:07:24,840
Speaker 1: we stand up here from Matt Tayibi. We'll put a

1250
01:07:24,840 --> 01:07:27,520
Speaker 1: link to his substack here in the description so you

1251
01:07:27,560 --> 01:07:29,720
Speaker 1: can make his tax problems even more complicated because he's

1252
01:07:29,760 --> 01:07:33,080
Speaker 1: making so much money. But look, the clear point here

1253
01:07:33,400 --> 01:07:38,120
Speaker 1: is that obviously this seems deeply fishy. There need to

1254
01:07:38,120 --> 01:07:39,960
Speaker 1: be a lot of questions that are answered about this,

1255
01:07:40,360 --> 01:07:43,919
Speaker 1: and if it was politically motivated in any way, all

1256
01:07:43,960 --> 01:07:45,640
Speaker 1: of that needs to come out from a corruption of

1257
01:07:45,680 --> 01:07:48,120
Speaker 1: our tax system and if the executive branch was resolved,

1258
01:07:48,120 --> 01:07:53,040
Speaker 1: because it would be a genuine scandal. We also wanted

1259
01:07:53,080 --> 01:07:57,440
Speaker 1: to mention Elon Musk making some news here with regard

1260
01:07:57,480 --> 01:07:59,520
Speaker 1: to the operations of Twitter. So you know, they launched

1261
01:07:59,560 --> 01:08:01,880
Speaker 1: the sleigh, the blue check mark thing that you have

1262
01:08:01,960 --> 01:08:05,240
Speaker 1: to pay for now the old legacy verified check marks

1263
01:08:05,280 --> 01:08:08,040
Speaker 1: like what we have SAGA are about to go away,

1264
01:08:08,560 --> 01:08:12,120
Speaker 1: and so he tweeted out starting April fifteenth, only verified

1265
01:08:12,160 --> 01:08:16,240
Speaker 1: accounts will be eligible to be in for you recommendations.

1266
01:08:16,880 --> 01:08:20,320
Speaker 1: This is the only realistic way to address advanced AI

1267
01:08:20,640 --> 01:08:25,200
Speaker 1: bot swarms taking over it is otherwise a hopeless losing battle.

1268
01:08:25,680 --> 01:08:29,920
Speaker 1: Voting in polls will require verification for the same reason. Now,

1269
01:08:29,960 --> 01:08:32,800
Speaker 1: I think it's important to remember in terms of his

1270
01:08:32,880 --> 01:08:37,280
Speaker 1: claims of like verification, that the new blue check marks

1271
01:08:37,439 --> 01:08:41,040
Speaker 1: are do not require a verification. That doesn't actually, you

1272
01:08:41,080 --> 01:08:46,000
Speaker 1: know the right. The original idea with check marks was

1273
01:08:46,040 --> 01:08:49,479
Speaker 1: that it will you go through an identity verification process

1274
01:08:49,479 --> 01:08:51,280
Speaker 1: and so that way, you know, you could look at

1275
01:08:51,320 --> 01:08:54,479
Speaker 1: an account and know that this person is who they

1276
01:08:54,520 --> 01:08:57,720
Speaker 1: say they are. And I didn't realize this actually came

1277
01:08:57,720 --> 01:09:00,240
Speaker 1: out of a lawsuit of someone who's identity and he

1278
01:09:00,360 --> 01:09:02,680
Speaker 1: was like stolen and they were slandered and whatever, and

1279
01:09:02,720 --> 01:09:05,800
Speaker 1: so this was the solution to that problem. Now I

1280
01:09:05,840 --> 01:09:08,559
Speaker 1: had issues with the blue check mark like legacy blue

1281
01:09:08,640 --> 01:09:10,840
Speaker 1: check mark system as well. I actually think it should

1282
01:09:10,840 --> 01:09:13,519
Speaker 1: have been much more widespread so that you had much

1283
01:09:13,560 --> 01:09:18,439
Speaker 1: more identity verification on the platform. But the direction Elon

1284
01:09:18,560 --> 01:09:21,120
Speaker 1: is going in as the polar opposite. It makes it

1285
01:09:21,200 --> 01:09:22,680
Speaker 1: much more of a wild West where you have no

1286
01:09:22,800 --> 01:09:26,040
Speaker 1: idea who is saying what and whether this is real.

1287
01:09:26,560 --> 01:09:29,040
Speaker 1: And now those people who are willing to do the

1288
01:09:29,080 --> 01:09:33,160
Speaker 1: effectively pay to play are going to get a tremendous

1289
01:09:33,720 --> 01:09:37,680
Speaker 1: benefit in terms of their use of this platform. For

1290
01:09:37,720 --> 01:09:42,680
Speaker 1: people who don't know, Twitter now has two settings. You

1291
01:09:42,680 --> 01:09:45,280
Speaker 1: can either look at just who you're following and what

1292
01:09:45,320 --> 01:09:47,639
Speaker 1: they've been tweeting out in order like just a true

1293
01:09:47,680 --> 01:09:51,760
Speaker 1: sort of timeline, or they haven't algorithmically generated for you.

1294
01:09:52,479 --> 01:09:55,760
Speaker 1: That the app usually defaults too. They were supposed to

1295
01:09:55,880 --> 01:09:57,920
Speaker 1: change it, so it defaults to whichever one you choose.

1296
01:09:57,960 --> 01:10:00,719
Speaker 1: But that's been sort of like, you know, sketchy, whether

1297
01:10:00,760 --> 01:10:04,519
Speaker 1: that's actually been happening. So the four if you're not

1298
01:10:04,680 --> 01:10:09,360
Speaker 1: showing up in the for you algorithmically driven tweets like

1299
01:10:09,760 --> 01:10:13,280
Speaker 1: you basically have been disappeared on the platform effectively. Yeah,

1300
01:10:13,360 --> 01:10:15,519
Speaker 1: I think it's a huge mistake. I'll tell you why,

1301
01:10:15,560 --> 01:10:17,800
Speaker 1: which is that the major reason that people follow to

1302
01:10:18,040 --> 01:10:21,920
Speaker 1: Most people don't tweet. Most Twitter users don't actually engage

1303
01:10:21,960 --> 01:10:24,880
Speaker 1: on the platform beyond like a like or scrolling past something.

1304
01:10:25,360 --> 01:10:29,800
Speaker 1: They follow mostly large accounts to try and figure out

1305
01:10:29,960 --> 01:10:33,400
Speaker 1: what's going on. So what if those people don't pay

1306
01:10:33,680 --> 01:10:35,479
Speaker 1: for their check marks? Are they not going to show

1307
01:10:35,520 --> 01:10:38,320
Speaker 1: up in the for you page? Airgo? Are you not

1308
01:10:38,360 --> 01:10:40,599
Speaker 1: going to then have the most timely access to information?

1309
01:10:40,880 --> 01:10:42,640
Speaker 1: And are you instead going to get a bunch of

1310
01:10:42,720 --> 01:10:47,320
Speaker 1: threads from guys talking about intermittent fasting, cold plunges, and

1311
01:10:47,400 --> 01:10:50,599
Speaker 1: how to become a multimillionaire, which gotta be the most

1312
01:10:50,640 --> 01:10:53,640
Speaker 1: annoying tweets on the entire planet. It honestly reminds me

1313
01:10:53,840 --> 01:10:55,880
Speaker 1: of what will happen to happen to Clubhouse. It's like

1314
01:10:55,880 --> 01:10:58,000
Speaker 1: you went onto clubhouse. There's alo these scams about how

1315
01:10:58,000 --> 01:11:00,160
Speaker 1: to make it it whatever in venture capital, and the

1316
01:11:00,200 --> 01:11:04,200
Speaker 1: actual quality discussions weren't there anymore. And so this, as

1317
01:11:04,200 --> 01:11:06,639
Speaker 1: you said, is basically a pay to play system for

1318
01:11:06,920 --> 01:11:10,320
Speaker 1: all of these people who desire and want engagement. Now,

1319
01:11:10,360 --> 01:11:14,320
Speaker 1: I'm not saying that many follow accounts don't want that,

1320
01:11:14,680 --> 01:11:17,240
Speaker 1: but the reason that a lot of these accounts do

1321
01:11:17,320 --> 01:11:20,840
Speaker 1: fundamentally get a lot of followers is because people again

1322
01:11:20,920 --> 01:11:23,559
Speaker 1: want to hear what they have to say. So this

1323
01:11:23,600 --> 01:11:27,840
Speaker 1: is more of a tiktokification of Twitter. The reason why

1324
01:11:27,880 --> 01:11:30,600
Speaker 1: I don't think it will work is that the tiktoication,

1325
01:11:30,880 --> 01:11:34,880
Speaker 1: if you will, is surfacing content which they know that

1326
01:11:34,920 --> 01:11:38,599
Speaker 1: you will engage with in a video format. This again

1327
01:11:38,880 --> 01:11:43,000
Speaker 1: is more timely access to information that you have curated,

1328
01:11:43,080 --> 01:11:44,800
Speaker 1: that you know that you want to look at if

1329
01:11:44,800 --> 01:11:47,600
Speaker 1: you're an NBA fan, you follow NBA accounts. You're an

1330
01:11:47,680 --> 01:11:50,519
Speaker 1: NFL guy, you follow NFL accounts. My account is mostly

1331
01:11:50,560 --> 01:11:54,160
Speaker 1: politics because I follow curated news people that I trust.

1332
01:11:54,240 --> 01:11:56,880
Speaker 1: Over many years that I've said, these are information that

1333
01:11:56,920 --> 01:11:59,240
Speaker 1: I can look at surface and then hopefully either try

1334
01:11:59,280 --> 01:12:01,200
Speaker 1: to share it with you or into deeper with my

1335
01:12:01,240 --> 01:12:04,679
Speaker 1: own reporting. That is the actual value access of Twitter.

1336
01:12:04,720 --> 01:12:07,519
Speaker 1: It always has been for a lot of high like

1337
01:12:07,840 --> 01:12:11,559
Speaker 1: high I guess value, elite, perpetrator, whatever you know, cultural

1338
01:12:11,600 --> 01:12:14,200
Speaker 1: taste makers, whatever term that you want to use here.

1339
01:12:14,800 --> 01:12:17,720
Speaker 1: And I think that this will really destroy it. We'll see, though.

1340
01:12:17,760 --> 01:12:19,840
Speaker 1: I mean, as long as I have access to my

1341
01:12:19,920 --> 01:12:22,960
Speaker 1: follower page, my following page, which is not the default

1342
01:12:22,960 --> 01:12:25,160
Speaker 1: but which you have to click into, I guess it's fine.

1343
01:12:25,640 --> 01:12:28,280
Speaker 1: But you know, like you said, legacy accounts like yours

1344
01:12:28,320 --> 01:12:30,120
Speaker 1: in mind, I will say, I do think it's a

1345
01:12:30,120 --> 01:12:33,240
Speaker 1: problem for anybody starting out in the journalism business. You

1346
01:12:33,320 --> 01:12:35,519
Speaker 1: basically now have to you basically have to buy a

1347
01:12:35,560 --> 01:12:37,120
Speaker 1: blue check mark. You know, if you want to get

1348
01:12:37,320 --> 01:12:39,560
Speaker 1: any amplification. You and I have a combined almost a

1349
01:12:39,760 --> 01:12:41,680
Speaker 1: million followers, Like we don't really care, you know, take

1350
01:12:41,720 --> 01:12:43,320
Speaker 1: it away, Like what are you, what's it going to

1351
01:12:43,400 --> 01:12:45,360
Speaker 1: do to me? I don't care, but you know, if

1352
01:12:45,360 --> 01:12:47,439
Speaker 1: you're starting out, I don't think it's really that fair.

1353
01:12:47,600 --> 01:12:49,080
Speaker 1: I think I do think it is paid to play.

1354
01:12:50,240 --> 01:12:52,439
Speaker 1: I think you make an important point though, about just

1355
01:12:52,479 --> 01:12:57,599
Speaker 1: the usefulness of the platform, because I frankly already find

1356
01:12:57,640 --> 01:13:00,519
Speaker 1: the platform less useful than I used to and find

1357
01:13:00,520 --> 01:13:04,040
Speaker 1: myself for you know, we use it extensively for generating

1358
01:13:04,160 --> 01:13:06,760
Speaker 1: stories and finding deciding what we're going to cover in

1359
01:13:06,800 --> 01:13:09,479
Speaker 1: the news, and finding elements and whatever. Twitter is really

1360
01:13:09,600 --> 01:13:12,960
Speaker 1: central to the way that we operate, and I already

1361
01:13:12,960 --> 01:13:15,559
Speaker 1: find myself using it less just because of some of

1362
01:13:15,600 --> 01:13:19,600
Speaker 1: the algorithmic changes that have already been made, you know,

1363
01:13:19,720 --> 01:13:21,840
Speaker 1: in my day to day usage of it, I find

1364
01:13:21,880 --> 01:13:26,559
Speaker 1: it less useful. So I think you're correct in identifying that,

1365
01:13:26,680 --> 01:13:29,920
Speaker 1: you know, the really core problem here is that it's

1366
01:13:30,040 --> 01:13:33,120
Speaker 1: just going to be a less useful platform for everybody,

1367
01:13:33,240 --> 01:13:36,200
Speaker 1: and so people are going to use it less. And

1368
01:13:37,080 --> 01:13:39,320
Speaker 1: you know, I also say, just as like a matter

1369
01:13:39,439 --> 01:13:42,479
Speaker 1: of principle, I will never pay for I will never

1370
01:13:42,520 --> 01:13:45,240
Speaker 1: play pay for the blue jet not having now you

1371
01:13:45,240 --> 01:13:49,400
Speaker 1: can like I would rather just be kicked off of Twitter, yeah,

1372
01:13:48,560 --> 01:13:52,080
Speaker 1: and then go through the shame of like paying for

1373
01:13:52,200 --> 01:13:55,080
Speaker 1: my Twitter access and get my little blue check mark,

1374
01:13:55,120 --> 01:13:57,000
Speaker 1: never going to do it. The only way that we

1375
01:13:57,040 --> 01:14:00,000
Speaker 1: would ever do it is if it were materially hurt

1376
01:14:00,160 --> 01:14:03,080
Speaker 1: the business in some way. But like you know, it

1377
01:14:03,120 --> 01:14:05,479
Speaker 1: doesn't do anything. Like, Yeah, I guess it's good whenever

1378
01:14:05,520 --> 01:14:07,760
Speaker 1: we put out announcements about the show. But we have

1379
01:14:07,840 --> 01:14:11,360
Speaker 1: bigger following me here on Instagram and one or on

1380
01:14:11,439 --> 01:14:15,280
Speaker 1: YouTube especially or on our podcast feed, which nobody's charging

1381
01:14:15,320 --> 01:14:17,280
Speaker 1: me to pay. So it's like, all right, you want

1382
01:14:17,280 --> 01:14:20,240
Speaker 1: to take it away. I guess that's fine. Maybe people

1383
01:14:20,240 --> 01:14:23,040
Speaker 1: feel similarly. I don't know. I genuinely have no idea

1384
01:14:23,439 --> 01:14:25,160
Speaker 1: how this will all play out. Personally, I don't think

1385
01:14:25,200 --> 01:14:28,120
Speaker 1: it's gonna work. I don't think it'll work that well. Yeah,

1386
01:14:28,200 --> 01:14:30,760
Speaker 1: I don't think so either. So well, we shall see.

1387
01:14:31,320 --> 01:14:33,360
Speaker 1: I'm not seeing a lot of business genius here right

1388
01:14:33,400 --> 01:14:35,479
Speaker 1: at this moment, to be honest with you, there you are,

1389
01:14:38,720 --> 01:14:40,960
Speaker 1: all right, sacher? Are you looking at From day one

1390
01:14:41,000 --> 01:14:43,639
Speaker 1: of the War of Ukraine and the debate about military

1391
01:14:43,640 --> 01:14:46,320
Speaker 1: aid to that country, we have been assured by policymakers

1392
01:14:46,320 --> 01:14:50,240
Speaker 1: of one thing at Ukraine is making America stronger. Ukraine

1393
01:14:50,280 --> 01:14:52,920
Speaker 1: is fighting our enemy for us, the anti Russian Neo konse,

1394
01:14:53,320 --> 01:14:55,840
Speaker 1: So the ammunition that we're setting them, it's just surplus.

1395
01:14:55,880 --> 01:14:58,600
Speaker 1: We barely need it, or we have plenty of capacity

1396
01:14:58,640 --> 01:15:00,479
Speaker 1: to take care of Ukraine and take care of ourselves

1397
01:15:00,520 --> 01:15:03,960
Speaker 1: in our allies. Obviously, the sheer dollar figure size of

1398
01:15:04,000 --> 01:15:07,080
Speaker 1: one hundred billion dollars has always exposed that as a farce,

1399
01:15:07,320 --> 01:15:10,240
Speaker 1: but they've cling to it nonetheless, And since conflict has

1400
01:15:10,240 --> 01:15:12,120
Speaker 1: now been going on for more than a year, some

1401
01:15:12,280 --> 01:15:15,280
Speaker 1: truth has begun to actually trickle out, not only about

1402
01:15:15,320 --> 01:15:17,599
Speaker 1: the aid to Ukraine and whether it's actually even being

1403
01:15:17,720 --> 01:15:19,719
Speaker 1: used in the way that we want to, but whether

1404
01:15:19,760 --> 01:15:22,639
Speaker 1: that aid is making us less safe and less prepared

1405
01:15:22,880 --> 01:15:25,839
Speaker 1: for a conflict that actually might have a real impact

1406
01:15:25,920 --> 01:15:28,839
Speaker 1: on our lives. The very first indication of this publicly

1407
01:15:29,040 --> 01:15:32,280
Speaker 1: came from the US Navy Secretary, who accidentally admitted two

1408
01:15:32,280 --> 01:15:35,439
Speaker 1: months ago the day may come soon whether we have

1409
01:15:35,479 --> 01:15:40,200
Speaker 1: to choose between arming ourselves and arming Ukraine. Ironically, after

1410
01:15:40,240 --> 01:15:42,439
Speaker 1: he admitted the truth, the White House called him and

1411
01:15:42,479 --> 01:15:45,559
Speaker 1: immediately made him issue a correcting statement where he tried

1412
01:15:45,600 --> 01:15:48,880
Speaker 1: to shift the blame to weapons manufacturers instead, of course,

1413
01:15:48,920 --> 01:15:51,760
Speaker 1: actually had nothing to do with Ukraine, but they protested

1414
01:15:51,800 --> 01:15:54,080
Speaker 1: just a little bit too much. Of course, this has

1415
01:15:54,160 --> 01:15:57,479
Speaker 1: always been obvious. The Western nations which supply Ukraine are

1416
01:15:57,479 --> 01:16:00,280
Speaker 1: not in a total war footing. Ukraine is blown through

1417
01:16:00,320 --> 01:16:02,800
Speaker 1: amals so fast they could expend the entirety of USA

1418
01:16:02,960 --> 01:16:05,920
Speaker 1: by summer if they don't husband their resources. The only

1419
01:16:05,960 --> 01:16:08,200
Speaker 1: way they could really keep up with their weapons demand

1420
01:16:08,479 --> 01:16:11,559
Speaker 1: was if our economies went into overdrive to supply them,

1421
01:16:11,800 --> 01:16:15,439
Speaker 1: something not even the idiot most bloodthirsty neocons would ever

1422
01:16:15,520 --> 01:16:19,360
Speaker 1: advocate for, because obviously it would make America's population ask

1423
01:16:19,479 --> 01:16:21,920
Speaker 1: a lot of questions. A new report from a series

1424
01:16:21,960 --> 01:16:25,720
Speaker 1: of inside whistleblowers over US defense readiness shows us not

1425
01:16:25,840 --> 01:16:28,240
Speaker 1: only has at Ukraine made us far less safe in

1426
01:16:28,240 --> 01:16:31,559
Speaker 1: our ability to prepare for conflict, but that, unsurprisingly, the

1427
01:16:31,640 --> 01:16:34,840
Speaker 1: money that we do spend, even on ourselves, is a

1428
01:16:34,960 --> 01:16:39,759
Speaker 1: gigantic boondoggle. Some choice examples from this new report quote

1429
01:16:39,840 --> 01:16:42,800
Speaker 1: the United States sent Ukraine so many Stinger missiles from

1430
01:16:42,800 --> 01:16:45,680
Speaker 1: its own stocks it would take thirteen years worth of

1431
01:16:45,720 --> 01:16:49,040
Speaker 1: current production at recent capacity levels to replace them. More,

1432
01:16:49,680 --> 01:16:52,639
Speaker 1: America has sent so many Javelin missiles it would take

1433
01:16:52,720 --> 01:16:56,160
Speaker 1: five years at last year's rates to replace them. They continue.

1434
01:16:56,280 --> 01:17:00,000
Speaker 1: According to our military's own internal figures, should a conflict

1435
01:17:00,080 --> 01:17:03,559
Speaker 1: breakout with a major naval power like China, quote, within

1436
01:17:03,720 --> 01:17:05,960
Speaker 1: one week, the United States would run out of so

1437
01:17:06,080 --> 01:17:09,360
Speaker 1: called long range anti ship missiles. These missiles, for reference,

1438
01:17:09,360 --> 01:17:12,160
Speaker 1: are what those war gamers rely on for any chance

1439
01:17:12,240 --> 01:17:14,680
Speaker 1: for the US in any naval conflict and in a

1440
01:17:14,720 --> 01:17:18,320
Speaker 1: most likely hostile scenario involving Taiwan. But the point of

1441
01:17:18,360 --> 01:17:20,880
Speaker 1: this isn't just about to talk about Ukraine. It's to

1442
01:17:20,960 --> 01:17:24,640
Speaker 1: illustrate that military resources are a zero sum game that

1443
01:17:24,720 --> 01:17:28,599
Speaker 1: we have to prioritize based on strategic importance, and also

1444
01:17:28,680 --> 01:17:31,519
Speaker 1: that these weapons manufacturers that we rely on so heavily

1445
01:17:31,720 --> 01:17:34,200
Speaker 1: and who are making so much money off this, they

1446
01:17:34,240 --> 01:17:36,920
Speaker 1: are not even good at their jobs. As Eric Lipton

1447
01:17:36,920 --> 01:17:39,880
Speaker 1: points out, there are only two major rocket companies in

1448
01:17:39,920 --> 01:17:43,120
Speaker 1: America that supply all US missile systems. One of them

1449
01:17:43,160 --> 01:17:45,360
Speaker 1: had a fire at one of their suppliers. Now the

1450
01:17:45,520 --> 01:17:48,479
Speaker 1: entire supply chain is backed up. Should a conflict break out,

1451
01:17:48,720 --> 01:17:51,920
Speaker 1: it would take months to split up an alternative. By

1452
01:17:51,920 --> 01:17:54,960
Speaker 1: that time, thousands or even millions of people could be dead.

1453
01:17:55,280 --> 01:17:57,920
Speaker 1: Throwing money at the problem cannot even fix it. It's

1454
01:17:57,920 --> 01:18:02,000
Speaker 1: about decades of lost industrial manufacturing capacity and technical know how.

1455
01:18:02,240 --> 01:18:04,519
Speaker 1: In fact, in the so called moment of Need, when

1456
01:18:04,520 --> 01:18:07,040
Speaker 1: many NATO countries were increasing the amount of weapons they

1457
01:18:07,120 --> 01:18:09,639
Speaker 1: wanted to buy, they could not even buy them from

1458
01:18:09,760 --> 01:18:13,599
Speaker 1: US because our industrial capacity was so weak we could

1459
01:18:13,600 --> 01:18:17,000
Speaker 1: barely keep up with the modest demand of the Ukraine War.

1460
01:18:17,400 --> 01:18:21,080
Speaker 1: We had to choose between supplying Ukraine and supplying actual

1461
01:18:21,160 --> 01:18:24,439
Speaker 1: NATO allies. In the meantime. South Korea, though, of all places,

1462
01:18:24,439 --> 01:18:28,479
Speaker 1: stepped up. Why because unlike America, South Korea is not

1463
01:18:28,520 --> 01:18:31,080
Speaker 1: a silly country. They have been in an effective state

1464
01:18:31,120 --> 01:18:33,479
Speaker 1: of war since their founding and of course have strict

1465
01:18:33,560 --> 01:18:36,599
Speaker 1: laws on the books keeping a robust internal supply chain

1466
01:18:36,640 --> 01:18:39,360
Speaker 1: in the event of potential conflict with North Korea. When

1467
01:18:39,360 --> 01:18:41,200
Speaker 1: the war in Ukraine broke out and the West was

1468
01:18:41,200 --> 01:18:44,040
Speaker 1: buying weapons, they were happy to oblige because they have

1469
01:18:44,120 --> 01:18:46,639
Speaker 1: the ability to spin up quickly, they had the technical

1470
01:18:46,720 --> 01:18:49,479
Speaker 1: know how, they basically are an allied nation already, and

1471
01:18:49,520 --> 01:18:51,680
Speaker 1: they had the people to actually do it. More so,

1472
01:18:52,000 --> 01:18:54,599
Speaker 1: they don't have to choose between themselves and others because

1473
01:18:54,600 --> 01:18:57,160
Speaker 1: they had so much excess at their capacity and at

1474
01:18:57,160 --> 01:19:00,360
Speaker 1: their fingertips. The crazy part South Korea spends only a

1475
01:19:00,400 --> 01:19:04,200
Speaker 1: relative fifty billion dollars a year on defense, or two

1476
01:19:04,200 --> 01:19:08,320
Speaker 1: point seven percent of GDP. The America, meanwhile, spends eight

1477
01:19:08,439 --> 01:19:11,360
Speaker 1: hundred and forty two billion, or three point three percent

1478
01:19:11,439 --> 01:19:15,519
Speaker 1: of GDP. So we spend orders of magnitude more in

1479
01:19:15,560 --> 01:19:18,799
Speaker 1: both absolute and percentage based terms, but we are weaker,

1480
01:19:19,160 --> 01:19:22,599
Speaker 1: less nimble, less safe. How does that work because of

1481
01:19:22,640 --> 01:19:25,800
Speaker 1: the corruption of the military industrial complex. That's something I've

1482
01:19:25,800 --> 01:19:28,439
Speaker 1: always maintained here that the size of the defense budget

1483
01:19:28,560 --> 01:19:31,040
Speaker 1: and the debate around it, it misses the picture. Yes,

1484
01:19:31,160 --> 01:19:33,840
Speaker 1: it's too big, but why it's too big? Because we

1485
01:19:33,880 --> 01:19:36,479
Speaker 1: spend too much and spend it on the wrong stuff.

1486
01:19:36,840 --> 01:19:41,080
Speaker 1: US weapons systems come in ridiculously over budget. They are

1487
01:19:41,120 --> 01:19:44,519
Speaker 1: designed to keep factories open in different congressional districts than

1488
01:19:44,560 --> 01:19:48,360
Speaker 1: they are to actually make functioning weapons and protect our troops.

1489
01:19:48,600 --> 01:19:51,120
Speaker 1: One of my favorite examples on this is during the

1490
01:19:51,160 --> 01:19:55,280
Speaker 1: Iraq and Afghanistan Wars, while the Pentagon brass resisted spending

1491
01:19:55,320 --> 01:19:58,479
Speaker 1: more on mine resistant vehicles to stop our soldiers from

1492
01:19:58,479 --> 01:20:02,599
Speaker 1: getting blown up by ID why because doing so would

1493
01:20:02,640 --> 01:20:06,480
Speaker 1: pull money from next generation fighter programs and other conceptual

1494
01:20:06,520 --> 01:20:09,679
Speaker 1: ideas that were costing billions of dollars they were quite literally,

1495
01:20:09,720 --> 01:20:12,479
Speaker 1: would rather have funded things like space lasers than actually

1496
01:20:12,520 --> 01:20:15,240
Speaker 1: protect the lives of American boots on the ground who

1497
01:20:15,320 --> 01:20:18,280
Speaker 1: are getting killed in day to day combat. Even today,

1498
01:20:18,439 --> 01:20:21,000
Speaker 1: the overall dollar amount that we spend on naval assets

1499
01:20:21,240 --> 01:20:25,320
Speaker 1: is criminal. Another favorite example the new Zumwalt class destroyers,

1500
01:20:25,360 --> 01:20:29,360
Speaker 1: whose main guns fire rounds that cost a million dollars each.

1501
01:20:29,640 --> 01:20:32,360
Speaker 1: The rounds are so expensive that we don't buy them,

1502
01:20:32,560 --> 01:20:35,519
Speaker 1: meaning that we have guns with no ammunition. But I

1503
01:20:35,560 --> 01:20:39,320
Speaker 1: guess it's stealthy. So stealthy it costs a few cool

1504
01:20:39,680 --> 01:20:43,200
Speaker 1: four hundred million dollars each. There's so many examples like this,

1505
01:20:43,479 --> 01:20:47,920
Speaker 1: the F thirty five program, which is hundreds of billions overdue. Also,

1506
01:20:48,080 --> 01:20:50,960
Speaker 1: every weapon system, though has been milked for dollars by

1507
01:20:51,000 --> 01:20:54,800
Speaker 1: the US taxpayers, with no evidence that they actually work

1508
01:20:55,000 --> 01:20:57,840
Speaker 1: and are mass producible in a time of crisis and

1509
01:20:57,920 --> 01:21:00,719
Speaker 1: would even keep America safe. We are at a major

1510
01:21:01,160 --> 01:21:03,800
Speaker 1: turning point here as a country. Last time is actually

1511
01:21:03,840 --> 01:21:06,400
Speaker 1: were things were this dire. It was nineteen forty. We

1512
01:21:06,439 --> 01:21:10,080
Speaker 1: had no financialization, we had a massive untapped industrial capacity.

1513
01:21:10,320 --> 01:21:13,040
Speaker 1: I have no doubt that eventually we might be okay.

1514
01:21:13,120 --> 01:21:16,719
Speaker 1: Should things go south, but thousands and potentially millions should

1515
01:21:16,760 --> 01:21:19,559
Speaker 1: not have to die before we do so. The lessons

1516
01:21:19,560 --> 01:21:22,880
Speaker 1: that we have forgotten were forged in blood, and unfortunately,

1517
01:21:23,000 --> 01:21:24,680
Speaker 1: it looks as if we may have to spill that

1518
01:21:24,720 --> 01:21:27,360
Speaker 1: blood again before we ever wake up from whatever the

1519
01:21:27,520 --> 01:21:29,680
Speaker 1: hell is going on here. And Chris, I found this

1520
01:21:30,000 --> 01:21:33,559
Speaker 1: report just absolutely stunning. I'm curious what you did as well,

1521
01:21:33,600 --> 01:21:36,480
Speaker 1: and if you want to hear my reaction to Cyber's monologue,

1522
01:21:36,520 --> 01:21:43,240
Speaker 1: become a premium subscriber today at Breakingpoints dot com. Well, guys,

1523
01:21:43,280 --> 01:21:46,720
Speaker 1: there is some absolutely bombshell news coming out of the

1524
01:21:46,880 --> 01:21:51,439
Speaker 1: Crypto World Finance, which is the world's largest crypto trading platform,

1525
01:21:51,439 --> 01:21:56,439
Speaker 1: which dwarfs FTX even at their peak, Finance is something

1526
01:21:56,479 --> 01:21:59,479
Speaker 1: like ten times the size of FTX. They have just

1527
01:21:59,520 --> 01:22:04,680
Speaker 1: been dude by the CFTC, that's the Commodity Futures Trading Commission,

1528
01:22:05,120 --> 01:22:09,000
Speaker 1: and the complaint here is quite extraordinary. What they allege

1529
01:22:09,560 --> 01:22:13,800
Speaker 1: is a wide ranging scheme of illegally selling commodities to

1530
01:22:14,240 --> 01:22:16,600
Speaker 1: US customers, something they're not supposed to be doing, of

1531
01:22:16,680 --> 01:22:20,040
Speaker 1: covering it up, even of coaching these US customers how

1532
01:22:20,040 --> 01:22:24,080
Speaker 1: to cover their own tracks here and additionally, and fairly

1533
01:22:24,120 --> 01:22:29,479
Speaker 1: explosive allegations, some insider trading and self dealing. That does

1534
01:22:29,560 --> 01:22:32,080
Speaker 1: sort of smack of some of the failures of FTX

1535
01:22:32,200 --> 01:22:35,040
Speaker 1: as well. Before I jump into the complaint and some

1536
01:22:35,080 --> 01:22:38,280
Speaker 1: of the admittedly juicy details here, because apparently a lot

1537
01:22:38,280 --> 01:22:41,280
Speaker 1: of these top execs just directly messaged each other all

1538
01:22:41,320 --> 01:22:44,599
Speaker 1: the time about their fraudulent schemes. Before I get to that,

1539
01:22:44,680 --> 01:22:46,640
Speaker 1: I want to give you some of the background on

1540
01:22:46,920 --> 01:22:49,479
Speaker 1: finance so you can understand what a big deal this is.

1541
01:22:49,680 --> 01:22:52,879
Speaker 1: A couple of months back, I did a monologue talking

1542
01:22:53,120 --> 01:22:57,080
Speaker 1: about this digital trading platform, how significant it was, and

1543
01:22:57,120 --> 01:23:01,240
Speaker 1: how many red flags there were about its operations. Let's

1544
01:23:01,240 --> 01:23:03,200
Speaker 1: take a listen to a little bit of that. Here's

1545
01:23:03,200 --> 01:23:05,240
Speaker 1: a few things you should know about finance straight away.

1546
01:23:05,479 --> 01:23:07,960
Speaker 1: Much as FTX was operated at the seemingly sole discretion

1547
01:23:08,120 --> 01:23:11,280
Speaker 1: of SBF, with no corporate oversight and no board, Binance

1548
01:23:11,360 --> 01:23:13,840
Speaker 1: is seemingly run at the sole discretion of CZ. There

1549
01:23:13,880 --> 01:23:16,599
Speaker 1: is no traditional shareholder structure or board of directors. In fact,

1550
01:23:16,880 --> 01:23:19,599
Speaker 1: it's a stretch to even Paul Binance a company it's

1551
01:23:19,640 --> 01:23:22,800
Speaker 1: not headquartered anywhere, and CZ himself Hopscotch is the globe

1552
01:23:22,840 --> 01:23:24,599
Speaker 1: in search of friend the regulators who will allow them

1553
01:23:24,640 --> 01:23:27,360
Speaker 1: to operate schemes which would be illegal in many countries.

1554
01:23:27,560 --> 01:23:30,599
Speaker 1: Here is how Bloomberg describes this state of affairs. Quote.

1555
01:23:30,760 --> 01:23:34,080
Speaker 1: Legally speaking, a Cayman Islands firm named Binance Holdings Limited

1556
01:23:34,080 --> 01:23:37,599
Speaker 1: owns its trademarks. That entity's ownership has never been disclosed.

1557
01:23:37,760 --> 01:23:40,719
Speaker 1: JAO that CZ is the sole owner of Finance Capital Management,

1558
01:23:40,720 --> 01:23:43,840
Speaker 1: registered in the British Virgin Islands. Many Binance operations are

1559
01:23:43,880 --> 01:23:46,640
Speaker 1: also entirely owned by CZ, either directly or through an

1560
01:23:46,760 --> 01:23:49,240
Speaker 1: entity he controls. According to corporate filings, most of the

1561
01:23:49,360 --> 01:23:53,120
Speaker 1: trades on Finance go through the flagship exchange binance dot Com,

1562
01:23:53,160 --> 01:23:55,519
Speaker 1: which is based in who knows where and owned by

1563
01:23:55,520 --> 01:23:58,639
Speaker 1: God knows whom. So a whole lot of red flag there.

1564
01:23:58,680 --> 01:24:01,080
Speaker 1: I mean, it seems like CZ was just running around

1565
01:24:01,120 --> 01:24:03,760
Speaker 1: the globe to try to escape any sort of regulatory

1566
01:24:03,800 --> 01:24:06,599
Speaker 1: scrutiny and avoid getting pinned down by the laws of

1567
01:24:06,680 --> 01:24:10,280
Speaker 1: any one country. But now let's take a look at

1568
01:24:10,320 --> 01:24:14,280
Speaker 1: what the CFTC is alleging was actually done here, and

1569
01:24:14,320 --> 01:24:17,200
Speaker 1: there are some pretty remarkable details in this complaint. Let's

1570
01:24:17,200 --> 01:24:19,160
Speaker 1: go ahead and put this first one up on the screen,

1571
01:24:19,240 --> 01:24:22,400
Speaker 1: as I said, some of the top level executives seem

1572
01:24:22,439 --> 01:24:25,400
Speaker 1: to have a habit of messaging each other about exactly

1573
01:24:25,439 --> 01:24:28,240
Speaker 1: what they were doing and the level of contempt and

1574
01:24:28,320 --> 01:24:30,559
Speaker 1: disdain that they allegedly had for the laws of this

1575
01:24:30,640 --> 01:24:33,760
Speaker 1: country and other countries as well. So here we have

1576
01:24:33,880 --> 01:24:39,120
Speaker 1: an exchange with the supposed person response responsible for money

1577
01:24:39,160 --> 01:24:45,400
Speaker 1: laundering reporting, and what she says here is that even

1578
01:24:45,400 --> 01:24:48,919
Speaker 1: though Binance doesn't have a board of directors, she complains

1579
01:24:48,960 --> 01:24:52,200
Speaker 1: about needing to write a quote fake annual money laundering

1580
01:24:52,280 --> 01:24:57,240
Speaker 1: report to finance board of directors WTF, to which another

1581
01:24:57,640 --> 01:25:02,400
Speaker 1: top executive responds, yet I can get management to sign.

1582
01:25:02,680 --> 01:25:06,320
Speaker 1: So this was this part of an external request for

1583
01:25:07,160 --> 01:25:10,439
Speaker 1: documentation of how they are dealing with money laundering. Clearly

1584
01:25:10,479 --> 01:25:13,240
Speaker 1: they have complete contempt for any ability to deal with

1585
01:25:13,360 --> 01:25:16,960
Speaker 1: potential money laundering issues. So she is complaining about having

1586
01:25:17,040 --> 01:25:19,280
Speaker 1: to write a fake report to a Binance board of

1587
01:25:19,280 --> 01:25:22,800
Speaker 1: directors that does not even exist. Let's put the next

1588
01:25:22,800 --> 01:25:25,360
Speaker 1: one up on the screen here, because we've got another

1589
01:25:25,400 --> 01:25:28,439
Speaker 1: exchange between these two executives about the ways that some

1590
01:25:28,520 --> 01:25:32,040
Speaker 1: of their customers use the platform. You've got Chief compliance

1591
01:25:32,080 --> 01:25:36,120
Speaker 1: Officer Samuel Limb saying, quote like, come on, they are

1592
01:25:36,200 --> 01:25:41,280
Speaker 1: here for crime. Finance's money laundering officer agrees that quote

1593
01:25:41,400 --> 01:25:44,880
Speaker 1: we see the bad, but we close two eyes. So

1594
01:25:45,200 --> 01:25:47,799
Speaker 1: these are the people who were supposed to be enforcing

1595
01:25:47,880 --> 01:25:51,400
Speaker 1: compliance for Finance, and they are openly admitting that they

1596
01:25:51,479 --> 01:25:54,479
Speaker 1: know many of their customers are quote here for crime.

1597
01:25:54,920 --> 01:25:57,679
Speaker 1: Let's put another one up on the screen to give

1598
01:25:57,720 --> 01:26:00,720
Speaker 1: you a sense of the sort of flippant approach to

1599
01:26:00,920 --> 01:26:04,880
Speaker 1: alleged fraud which came directly from the top down. These

1600
01:26:04,880 --> 01:26:09,519
Speaker 1: are some interactions involving CZ himself. He explained that Binance

1601
01:26:09,560 --> 01:26:12,160
Speaker 1: needed to make sure it's PR messaging was on point.

1602
01:26:12,320 --> 01:26:15,840
Speaker 1: Regarding their large US customer base. He told colleagues that quote,

1603
01:26:15,840 --> 01:26:19,040
Speaker 1: we need to finesse the message a little bit, and

1604
01:26:19,080 --> 01:26:22,840
Speaker 1: the message is never about Binance blocking US users, because

1605
01:26:22,880 --> 01:26:25,759
Speaker 1: our public stance is we never had any US users,

1606
01:26:26,000 --> 01:26:30,160
Speaker 1: so we never targeted the US. We never had US users. This,

1607
01:26:30,280 --> 01:26:34,800
Speaker 1: of course, was directly contradicted by reports. CZ was regularly

1608
01:26:34,880 --> 01:26:39,240
Speaker 1: receiving reports that their customer base was twenty to thirty

1609
01:26:39,439 --> 01:26:42,760
Speaker 1: percent US. And again, just to remind you, they were

1610
01:26:42,800 --> 01:26:45,240
Speaker 1: not supposed to be selling commodities. They are not registered

1611
01:26:45,240 --> 01:26:48,040
Speaker 1: in the ussel commodities, so any exchange that they were

1612
01:26:48,080 --> 01:26:53,160
Speaker 1: doing with US customers was illegal. So what these findings

1613
01:26:53,200 --> 01:26:56,479
Speaker 1: here allegedly prove is that they were aware that their

1614
01:26:56,479 --> 01:26:59,840
Speaker 1: customer base was twenty to thirty percent US, and they

1615
01:27:00,120 --> 01:27:04,320
Speaker 1: were claiming publicly that of course they had no US users.

1616
01:27:04,520 --> 01:27:07,400
Speaker 1: Let's put another one up on the screen that shows

1617
01:27:07,400 --> 01:27:09,280
Speaker 1: some of the extent that they would go to to

1618
01:27:09,640 --> 01:27:13,519
Speaker 1: help their customers hide that they were in fact US users.

1619
01:27:13,920 --> 01:27:18,280
Speaker 1: They apparently actually put an instruction guide up that explained

1620
01:27:18,280 --> 01:27:20,960
Speaker 1: how to use VPN, which masks allows you to mask

1621
01:27:21,040 --> 01:27:25,040
Speaker 1: your location that you are coming from. Here, we've got

1622
01:27:25,080 --> 01:27:28,200
Speaker 1: another quote from Lim. He explained to a subordinate, they

1623
01:27:28,200 --> 01:27:30,840
Speaker 1: can use VPN, but we are not supposed to tell

1624
01:27:30,880 --> 01:27:33,639
Speaker 1: them that talking about their customers. It cannot come from us,

1625
01:27:33,920 --> 01:27:36,760
Speaker 1: but we can always inform our friends third parties to

1626
01:27:36,840 --> 01:27:40,560
Speaker 1: post not under the umbrella of binance. Ha ha ha.

1627
01:27:41,000 --> 01:27:43,360
Speaker 1: So basically saying like, yeah, we need to tell them

1628
01:27:43,360 --> 01:27:46,040
Speaker 1: to use VPN so that no one knows that they're

1629
01:27:46,080 --> 01:27:49,400
Speaker 1: actually US people. But you know, we can't directly say that.

1630
01:27:49,479 --> 01:27:51,599
Speaker 1: It's got to come from one of our allies. Can't

1631
01:27:51,600 --> 01:27:55,519
Speaker 1: come directly from byance lol. So if you take all

1632
01:27:55,560 --> 01:27:59,720
Speaker 1: of these alleged comments together, you see pretty clearly they

1633
01:27:59,800 --> 01:28:02,400
Speaker 1: knew they were in violation of US law. They went

1634
01:28:02,439 --> 01:28:05,439
Speaker 1: to quite some lengths to cover it up, to pretend

1635
01:28:05,439 --> 01:28:08,200
Speaker 1: they had no US users when obviously they knew twenty

1636
01:28:08,280 --> 01:28:11,759
Speaker 1: to thirty percent of their customer base was US based.

1637
01:28:12,240 --> 01:28:15,040
Speaker 1: But maybe the most explosive allegations have to do with

1638
01:28:15,280 --> 01:28:20,240
Speaker 1: self dealing and insider trading. So CZ himself is alleged

1639
01:28:20,280 --> 01:28:25,240
Speaker 1: to have controlled three hundred different accounts on the platform

1640
01:28:25,520 --> 01:28:29,560
Speaker 1: and was using their quant desk and insider information potentially

1641
01:28:29,720 --> 01:28:32,280
Speaker 1: about what exactly was going on in that platform to

1642
01:28:32,400 --> 01:28:35,880
Speaker 1: make money for himself. I've had a report on this.

1643
01:28:36,000 --> 01:28:38,240
Speaker 1: Let's put this up on the screen. This is from

1644
01:28:38,280 --> 01:28:42,120
Speaker 1: an outlet called BlockWorks. They wrote the apparent setup reeks

1645
01:28:42,160 --> 01:28:46,439
Speaker 1: of a familiar funk control the markets, own the market makers,

1646
01:28:46,560 --> 01:28:50,960
Speaker 1: then offer enough special privileges to render profiteering from users

1647
01:28:51,040 --> 01:28:55,120
Speaker 1: a sure thing. Now, there was no disclosure around the

1648
01:28:55,160 --> 01:28:59,919
Speaker 1: fact that CZ himself controlled three hundred different house accounts

1649
01:29:00,080 --> 01:29:03,439
Speaker 1: on the platform. There was a scandal previously that I

1650
01:29:03,439 --> 01:29:05,880
Speaker 1: believe we touched on before where it looked like there

1651
01:29:05,920 --> 01:29:09,160
Speaker 1: was insider trading going on on the binance platform with

1652
01:29:09,160 --> 01:29:13,680
Speaker 1: regard to potentially top executives. These three hundred house accounts

1653
01:29:14,000 --> 01:29:18,400
Speaker 1: were exempted from new insider trading rules put in place

1654
01:29:18,600 --> 01:29:22,080
Speaker 1: by Finance in response to that report, and according to

1655
01:29:22,080 --> 01:29:26,760
Speaker 1: the complaint here had no anti fraud or anti manipulation

1656
01:29:27,120 --> 01:29:31,519
Speaker 1: controls put on these accounts. So blatant alleged self dealing,

1657
01:29:31,680 --> 01:29:35,600
Speaker 1: blatant alleged insider trading. And it just reminds me, you know,

1658
01:29:35,680 --> 01:29:39,439
Speaker 1: for all the like fancy new jargon and tech around

1659
01:29:39,680 --> 01:29:42,920
Speaker 1: crypto and the blockchain and all of these things, a

1660
01:29:42,960 --> 01:29:46,880
Speaker 1: lot of what this comes down to is good old fashioned,

1661
01:29:47,160 --> 01:29:53,160
Speaker 1: well worn white collar crime and with even fewer regulations

1662
01:29:53,200 --> 01:29:56,599
Speaker 1: and guardrails than the traditional finance system, which is really

1663
01:29:56,640 --> 01:29:59,439
Speaker 1: saying something. And as usual, it will be a small

1664
01:29:59,479 --> 01:30:03,639
Speaker 1: handful of elites who gained the benefits of the crimes

1665
01:30:03,640 --> 01:30:07,320
Speaker 1: they are able to commit and regular people who are

1666
01:30:07,439 --> 01:30:10,360
Speaker 1: left holding the bag and soccer. It was kind of

1667
01:30:10,360 --> 01:30:14,080
Speaker 1: a matter of time before this complaint dropped, and before

1668
01:30:14,280 --> 01:30:16,160
Speaker 1: you know, and if you want to hear my reaction

1669
01:30:16,280 --> 01:30:19,840
Speaker 1: to Crystal's monologue, become a premium subscriber today at breakingpoints

1670
01:30:19,880 --> 01:30:25,240
Speaker 1: dot com. Thanks everybody for watching. We really appreciate it.

1671
01:30:25,280 --> 01:30:27,000
Speaker 1: I know it was annoying. You know, I was in

1672
01:30:27,040 --> 01:30:30,320
Speaker 1: New York. Now Crystal is unfortunately not feeling well. But

1673
01:30:30,720 --> 01:30:32,320
Speaker 1: we always bring sure that we bring the show to

1674
01:30:32,320 --> 01:30:35,080
Speaker 1: you everybody here and we will hopefully be back fully

1675
01:30:35,080 --> 01:30:37,440
Speaker 1: in the studio on Thursday. We've got a great Counterpoints

1676
01:30:37,439 --> 01:30:39,639
Speaker 1: show for everybody tomorrow, so make sure you go ahead

1677
01:30:39,720 --> 01:30:41,400
Speaker 1: and tune into that and we will see you all

1678
01:30:41,520 --> 01:30:41,720
Speaker 1: then