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