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.
Good morning, everybody, Happy Thursday. We have an amazing show for everybody today.
What do we have, Crystal, Indeed, we do lots to get to you this morning. We have the latest fallout over that alleged strike on the Kremlin. Will tell you what we know about all of that. We also have another bank that may be teetering on the brink of failure. This comes as the Fed hikes interest rate rates yet again and we face down the dead ceiling deadlines. So there's a lot going on in terms of the economy. We have new details about exactly who Jeffrey Epstein was
hanging out with and how often. Larry Summers I have some questions for you, and a new effort by our friends over at Media matters to paint wanting debates as being right wing. You're gonna love this one. You're gonna love this one. Also excited to talk to you be Ben Smith in the show. He has a new book out and he's talking about you know, he was with BuzzFeed. BuzzFeed obviously has gone under. He was part of that
whole twenty tens media build up. Very insightful guy. He's got his own new media company now, so I want to hear from him about the failures there, lessons learned, how we can keep from you know, any cautionary tales that we should learn from there.
That's right.
Before we get to that, I want to say, once again just thank you to everybody who's been signing up for the premium subscription, who's been helping us out, building out the new studio, paying for the new lives. We've just got some exciting news, some big technological developments that we'll be able to debut to all of you, and it does just mean the world to all of us.
And once again, Monthly members, we love you, We love the Yearly, we love the Lifetime, We love anybody who is willing to help us out currently at this time, so if you are able at Breakingpoints dot com and for those who are asking, as I've said before, we do have a donation button which is there on the website.
We appreciate it very much and I.
Just want people to understand too, you know, the studio, it's not like this is the end all be all. This is just you know, one more step in the phase that we go to. Everything that we're doing is about building things up for the twenty twenty four election cycle, to be able to expand coverage, to be able to expand partnerships, you know, report so much of the things that we can do. So we're starting with the studio, but don't worry, you know, everything will continue to scale.
We're a startup company and we build everything by blocks, not like some of these other idiot media companies, which we will be talking to Ben Smith about. Yes, yeah, indeed, all right, let's start off with Ukraine. So obviously Emily and Ryan did a great job yesterday of talking about what was going on in the alleged attack on the Kremlin, potentially an assassination attempt, that's what the Russians are claiming
by the Ukrainian intelligence services on Vladimir Putin's life. Well, in terms of what we know about both reaction by the Russians and then the initial denials by the Ukrainians, here's what we have so far. President Zelenski of Ukraine was actually in Finland when the attack happened, and he addressed the allegation on camera in English.
Here's what he had to say.
We don't attack Putchin or Moscow. We find on our territory, we're defending our religious insidd we don't have you know, enough weapon for these That's why we don't use.
It anywhere for us. That is the deficit.
We con'tpand it and we didn't attack Putin.
We leave it to tribunal.
Just gonna say, I would say it begs belief just because and we'll get into this in a little bit about the way that they are specifically phrasing their denials. But I think it's also just worth for anybody who's just joining us and hasn't seen the video. This is some crazy video in downtown Moscow. Let's go and put this up there on the screen. I mean, what we are watching here is this. You know, this is the
heart of power inside of Russia. And you can see a drone very clearly coming and striking the flag which is on top of the domed building there. And actually whenever there's some zoomed out photos and video of this crystal, you literally watched the drone fly pass the Kremlin, the entire seat of power and all legitimacy of authority in Russia, before exploding on top of the flag. The Russians claimed that anti aircraft was used to blow up other drones
that were in the area. There's again, the circumstances around all of this are unclear. I want to go back to though, the initial denial, the denial now by the Ukrainian regime. Let's go and put this up there on the screen. And this was a screenshot that was flagged by our producer. Following the news, the actual chief of staff to President Selenski actually posted three fire emojis on his telegram channel without any commentary, but then deleted the post shortly afterwards.
The post is almost more of a deleting the post is.
A little bit of a tell, I would say.
And the other reason that I think it's so important to think about all of this is that if you read the detailed response, not just by Zelenski, but by the Chief form Policy Advisor to Ukraine, who actually put out a tweet in English, he said something which calls calls into question the entirety of the statement. He said, Crystal, we have never used drones or perpetrated any attack on
Russian soil. That's why even pro Russian or pro Ukrainian accounts who I follow, people like Michael Weiss and others, are saying this is ridiculous.
They're like, the idea that the Ukrainian.
Intelligence services have not carried out both assassination campaigns and even air like attacks on Russian soil is ludicrous.
You know Whychris.
We even know from the leaked set of Pentagon documents that they not only have done so, but want to do so with long range weapons. So there's a lot if you parse the language. You know, Zelenski funnily enough is saying, oh, well, we don't.
Have the weapons. First of all, you have the weapons. Second, you actually want more so you can do even more of this.
And third, the idea that the Ukrainian intelligence services have not carried out multiple attacks on Russian soil throughout the course of this war is just a lie. Absolutely on its face, even the most pro Ukrainian accounts will tell you that. Now does any of this mean that they are directly responsible? Who knows a genuine who knows moment? Is it technically possible the Russians could have carried out a false flag?
Maybe? I mean, let's think about it a little bit. But first though, I.
Think we should note that the people who are the most pro Ukraine here in Washington all want to call it a first flag, because I think by saying that, they are explicitly acknowledging this is a dangerous escalation. One of those is the former CIA director Leon Peta, Here's what he had to say, and.
Former CA Director of President under President Obama Lee Panetta. Secretary of Panetta sources.
TELCNN that US officials had no warning that an attack like this was coming, and that.
The Ukrainians assure them privately they had nothing to do with it.
What's your take, Jake, This really does smell like a false flag operation on the part of the Russians, a diversion, if you will.
So, false flag. They said, it's a diversion.
I mean, again, look, anything is possible, but I think we should consider a couple of things I'm curious what you think, Crystal.
Yeah.
Number one is this, It's humiliating to have a drone. It's like the Chinese balloon thing. But for the Russians, you have a nation that you are at war with that is able to penetrate your most innermost defenses and strike at the seat of power in Mosk.
I mean that's humiliate.
That would be like if somebody, you know, blew up the statue on top of the Capitol building. That's insane, right, think about the what that response would look like and the questions it would call to the actual like command and control of the Russian regime.
Yeah.
Second, you know, okay, everyone's saying it's a false flag and all that, but we also, again, as I've laid out, Ukrainian intelligence services have long both wanted the weapons to carry out attacks like this, have you know, justified this and also are you know, we're obviously gleeful as we initially showed you in that So I just think much of the false flag discourse is centered around the fact
that the true here's the basic truth. Whatever you think this is definitely ratcheting things up a notch well.
And whatever you think, it's definitely in the realm of possibility. I mean, even the biggest Ukraine stands who want to believe Panetta that, oh, that has all the hallmarks of Russian disinformation and a false flag in the infamous words where it used to dismiss the Hunter Biden laptop story. Even if you want to believe that, you have to acknowledge the Ukrainians have done some crazy crap already, and they've done it on Russians, and you also have to acknowledge, Yeah,
the Russians are liars. So are the Ukrainians. I mean, we know this and look he to battle heat a war. I get it. Okay, maybe you can make some excuses for them, but you cannot rely on the word of Zelenski, whether or not anyone in the Ukrainian State, Ukrainian Rotary
Club or whatever had to do with this attack. I think your point about you know, it's hard to imagine that this would be the type of false flag that they would want to stage, given that also throughout this war it's really been putin has really attempted to sort of protect the population from the fallout of the war and not make it feel like this is on their soil. And this is coming for them directly in order to try to maintain support for the war efforts. So you know,
it flies in the face of that as well. But just think about it. I mean, we had we know two very very likely that Ukrainians were involved in two separate assassinations on Russian soil with pro Russian war bloggers. Effectively, we know that they were very likely involved in the Crimean Bridge. We still don't really know exactly what happened with Nordstream. They may have been involved and may have been us on our own, etc. But it's not crazy to think that they were involved in blowing that up
as well. We know from the leaked documents that they were very interested in obtaining long range missiles from US so that they could strike further onto Russian soil. So to act like, oh, there's no way this could be them, I think that that is incredibly, incredibly naive. I think it is wilfully blind, and it frankly irritates me that the media is not more clear about these things because you have so much of the population that they just see Zelenski as a hero and they just dismiss it
out of hand. There's no way possible that he could have done this. Think about the incentive that they have here too, which is something that we have always flagged as a real danger. It is in the Ukrainian's interest to have an escalation that would draw us directly into the conflict. So when we look at something like this and we're like, this is insane. You're trying to potentially assassinate the leader of a nuclear arm superpower, Like, what in the world are you up to? But their calculus
is very different. Their interests are not, in this way actually aligned with us. They would like to see some sort of escalation that forces our hand and draws us directly into this war because frankly, that is the only way that they would outright win. So that has always been there. But I just really want to urge people to think about how much fire we are playing with here, because even if you submit, there was like a one percent chance that this was the Ukrainians. You have to
these are our partners and allies. They did not warn us, probably in advance that they were going to do this. We have no control over them, and we also know from the late documents them from a lot of other reporting, we have less insight in some ways into what the Ukrainians are up to. Because we don't have these deep intelligence networks that we've been working on for decades with regard to your Ukrainians, and they don't let us in on what they're up to. We have less insight into
their operations in some ways than the Russians. So we are playing with fire. This is an insane situation, and it just reminds me again, whatever we can do to get this conflict to an end is incredibly critical.
This is the issue. You know, the NAFO people who are out there are all.
Like, well, the Moscow has tried to assassinate Zelensky, who's defending Moscow? Okay, right, if the Ukraine listen, here's my general take on the matter. People dismiss any concern of ours as some sort of condemnation on Ukraine. Now here's the deal. If Ukraine wants to put itself in a position to risk its annihilation.
They are free to do that.
But then it should said risk happen, They should bear one hundred percent of the risk and of the possibility without any of the escalation coming back on us. And that's part of why I'm so annoyed by the discourse around this, he's saying that Ukraine is quote unquote not justified or doesn't have the right to retaliate. You can do whatever you want, but whatever you want, you should keep us out of it. And that's the problem, which is that they don't seem to understand we are tied.
At the hip.
Not my choice, I can tell you that, but by the choice though of the President of the United States, of NATO and the entire Western Alliance seems to have lost their minds, and they seem to think that, you know, we are going to rise and fall with whatever.
Happens to Ukraine.
And if that's the case, then then of course, as you said, Ukraine is of their fate, and what happens to them is now directly tied to us, and so we should have some say in the matter.
When you're dealing with nuke's, what's going on here is tied to everyone on the planet, right, I mean, even if we weren't so directly involved and basically a proxy you know, fighters alongside of the Ukrainians, with by the way, some limited number of boots on the ground and providing a lot of intelligence to help them with their targeting and all of those, and of course the money and the weapons and all that we have sent over there.
Even if that wasn't the case, every single person on the planet should be concerned about what's going on here.
Sure.
And then also this is another important thing. And by the way, this is coming from Bellincat, which is definitely one of the more of a pro Ukrainian group. I think it'd be fair to say, put us up there on the screen. They are acknowledging that there are apparent Russian Ukrainian attacks within Russia and Russian controlled territory over the last four days, all using drones. There was a drone attack on a huge fuel storage facility in Crimea. There was a drone attack on an oil depot near.
The Kirch Bridge.
There was a two major train derailments in a region inside of this territory. And there also now is the drone attack at the Kremlin. Lots of people kept saying, oh, well, this is an isolated incident. No, it was part of a concerted Ukrainian drone campaign against targets inside of Russia. Now once again they can do what they would like, but if they get retaliated against and they get a city wiped out or something like that. Well, then that's
on them, because that's what war looks like. And then the idea that we should get drawn into it even more, which is what a lot of people hear and Washington want,
I think is very problematic. I just you know, for me, the fact that so many people want to call it a false flag is the tell in and of itself, because they have to because by doing that they can push responsibility off the Ukrainians because if we all acknowledge it is look, let's just say it's probably almost certainly it was the Ukrainian regime, Well, then they have to acknowledge them that they've done something incredibly risky.
I also want you to think about, you know, with Panetta there on with Jake Tapper, Now, if you ever had anyone with a critical view as we do, or a skeptical view as we do, go on and say, you know, this really looks like a Ukrainian attack. Oh,
they be up at arms. There's no way you could just say that without tap or jumping in impress, which you know what he should, right, but you got to do it on the other side too, And Panetta is just allowed to float this with no backing, no evidence, no nothing, just because he wants it to be true,
and no pushback. For the media, this becomes the accepted narrative. Also, to linger on that tweet that we put up earlier showing the various drone attacks in and around Russia from Ukrainians, that also really undermines Zelensky's claim that we don't even have the weapons.
Toe That's what I'm saying.
So, if your statement of denial really doesn't hold up to scrutiny, that should cause people to have a lot of question marks about what else you're presenting here and
whether it is in fact accurate or not. Again, let me just say, if you are more inclined than we are to believe Zelensky's denials and believe this was a potential false flag, please acknowledge there is at least a chance that this was the Ukrainians, and if there's even a chance that they are freelancing and engaging this type of incredibly reckless actions, that should change your whole way that you're thinking about this war.
Yeah.
Absolutely, Let's go to the next part here about Yeah, how are the Russians taking this? Turns out not? Well, let's go and put this up there on the screen. Dmitriy Medvedev, the former president of Russia, says, after the attack on the Kremlin, there is a need to now quote physically eliminate Zelensky. He says, after today's terrorist attack, there are no options left other than the physical elimination of Zelensky and his clique. He is not even needed
to sign the Act of Unconditional Capitulation. Hitler, as you know, did not sign it either. There will always be some kind of changer like this, Hits President. Admiral Donuts, wrote Medvedev in his telegram channel.
And by the way, Medvedev, remember.
Was supposed to be the reasonable one whenever Putin was out. Now, look, he's basically lost it in terms of his rhetoric now for quite some time. But really his designs and his rhetoric and all that are aimed not just at Zelenski, they're really aimed at us. Just to show you what the temperature is inside of the Moscow elite, let's go to the next one. Here up on the screen, the speaker of the Duma, you know, basically the Russian Congress, says that Russia should use quote weapons to destroy the
KEIV regime. As Samuel Romani here says, aside from nuke's what are said weapons exactly right? Which is you know what exactly is on the table? Well, now, listen, nuclear saber rattling has long been part of the Russian rhetorical campaign. Obviously they can credibly back it up because they have more nukes than everybody else on the planet. But you should also pair it with some recent news which was passed off as some sort of secondary thing, but is pretty alarming.
Let's put this up there on the screen.
The Federal National National Security and Nuclear National Security Administration here in the US is now setting up an advanced network across Ukraine with radiation sensors to detect a nuclear blast that could verify an attacker's identity. Again, this is US tax pay dollars in a US agency that is now wiring up Ukraine with the same sensors and unit of atomic experts that are monitoring all of this equipment, with the same radiation sensors that we have here at home.
Now, we don't know all.
Their allies that have said sensors and have the same network, but I do think at the very least it seems important to say, you don't do this unless you think that the chance is greater than one percent. And as all policy makers have always made around nuclear policy, the policy of one percent, because the risk is so catastrophic that you have to take it and treat it almost as if it's on the table as fifty to fifty.
Yeah, yeah, I think that's right. And this is in direct contrast. We've been receiving assurances in the media and from administration officials for a while now of like, oh, we don't think that's going to happen. We don't think there's going to be any nuclear deployment. There was some increased concern a while ago, but we really don't think Putin's going to go in that direction. I think this
action speaks louder than those words, is what I would say. Clearly, they do think that there is some level of significant risk that Putin does introduce nukes into this conflict. I don't have to tell you how terrifying that potential scenario is. They also talk in this article about how they feel
fear a potential reactor threat scenario. They have a nuclear power expert who says that Russia, if it suffered a humiliating defeat and withdrew from Ukraine might retaliate by firing on a reactor it's spent fuel storage areas in order to release high radioactivity into the environment. That's one of the biggest dangers. This doctor Lyman his name said, if they wanted to render as much of the countryside as they could uninhabitable, those reactors might become targets. So that's
another potential threat that they're monitoring here as well. It's also interesting the way they talked about this agency outfit group within the Energy Department that they describe as a shadowy unit of atomic experts that apparently they didn't even want to acknowledge the existence of until very recently. So anyway, there's that too.
Yeah, great, And by the way, what's opening on top of all of that after the attack put this up there on the screen. The US is sending a Ukraine three hundred million dollars more in additional military aid, including an enormous amount of artillery rounds, howitzers, air to ground rockets ammunition as the launch of the Spring offensive against the Russian forces approaches. The new package also includes hydro seventy rockets unguided rockets that are fired from an aircraft.
It includes an undisclosed number of rockets for high mars, mortars, howitz surrounds, missiles, anti tank rifles. The weapons all will be pulled from existing Pentagon stocks so that it can go quickly to the front line in case you're wondering where it's all coming from, which is our own stocks of military resources, of which we are going to probably take a decade to have to replace. I encourage everybody to go read. You know, might probably do a monologue
on this soon. The level of how much this is exposed, how hollow and useless are defense industrial complex is. For all of the talk of the military industrial complex, I always try and emphasize this point.
They're not even good at what they do.
We have like one plant that produces weapons waste, and then we just had a.
Fighting amount of money.
Yeah, and you're like, what are we paying for?
You know, we pay the size of the GDP of small African nations on a yearly basis, and we don't even have enough weapons to send to a measly country like Ukraine, let alone, you know, defend the United States of America. That's a whole other subject for another time. The point is, though, is that it is a zero sum game and we are not. Basically, we don't have a resources that we necessarily could need. And I think also at this point we should all acknowledge the coming
Ukrainian Spring offensive. It's happening at some point. We don't know when it could happen.
Literally today, it could have already begun, you know, with the drone campaign.
It could happen in a week. America doesn't even know. Our own intelligence services don't know this. Zelenski doesn't want to tell us apparently, and I guess in some way you can sympathize he's like, well, you know, we didn't even know about these League documents, Like why should we tell you anything?
Is it is gonna end up in the press now, I don't blame him us, yeah, right right. I mean, we have a lot of strategic leverage here that we could be using if it was important to us to know what the hell they were up to. But you know, apparently it's not that important to our our leaders and the peace you're pointing out saga with regards to the military industrial complex. This is why actually some of the
voices of restraint have come from the Pentagon. I mean, think about General Bully, because they're very aware of what this does to our own readiness and preparedness. The last thing I want to say with regard to the Russian response here is listen, if Putin was killed, died, sassinated, whatever,
It's not like we would be shedding tears here. However, I think we have a realistic, realistic understanding, and no one needs to confuse themselves about the fact that it's not going to be doves that come to power in the wake of that death. The ascendant voices within Russia are harder line, if anything, then Putin. They are more pro war, they are more aggressive, more brutal. And I know you may think that that's not possible, but believe me,
it is. So don't think that if Putin was gone or taken out, that this would be an improvement in the city situation. It could actually make things much worse. And you know, as we've said before, the biggest risk in terms of nuclear usage deployment is if Russia is truly desperate, truly backed into a corner. And I think that this incident, whether you think it's you know, most likely that it was the Ukrainians or only possible that
it was the Ukrainians. It should really bring home to you the grave risks that are a tendant to continuing this conflict and allowing it to go on as we have.
Yeah, I mean, we just read that thing about Medvedev, like that's the moderate guy you know inside of Russia or the do must be these are established politicians who are the real alternatives to putin people. Always I've heard, always heard that with the Chinese Communist Party too. They're like,
who knows what the hell would come next? You have no idea like that level of authoritarianism could could actually, you know, look like child's play compared to what some facets within the party or the military or whatever do desire. Not everybody's like us, you know, and our system. That's a lesson that I think a lot of people should remember. Let's go ahead to the next one with the economy.
Yeah, so we've got kind of a lightning round of big economic news that is all coming together this week that should similarly make you pretty nervous. So we told you earlier this week on Monday, we have the second largest bank failure in history, and now it looks like We've got yet another bank, this would be the fourth one in just a few months that is teetering on the brink. Let's put this up on the screen from CNBC. We're talking about pac West here. This is a report
from yesterday. Their shares fell more than fifty percent after hours on a report that the bank is considering quote strategic options. That means again it is teetering on the brink. I'll read you a little bit of this report. The regional bank is assubsing options, including a possible sale, bringing in advisors to evaluate longer term plans for the business,
according to one person familiar with the matter. They later confirmed they were still in discussions with momultiple potential investors and partners of the company will continue to evaluate all options to maximize shareholder value and the all regional bank shares have basically been hit hard recently after the collapse of Silicon Valley Bank, and PacWest has not been immune
to that. Just to give you a sense of the size of this, this is an LA based bank that has a roughly seven hundred and fifty million dollar market cap, so it's no small potatoes and it's down by seventy two percent this year through Wednesday, so has just been battered. Now. I will tell you this morning, what they're saying, the folks at pack West is that core deposits have actually
increased since March. According to them, in the wake of the Silicon Valley bank collapse, because that's been a major issue for some of these regional banks is depositors have fled to the big boys like JP Morgan Chase, But they say that hasn't been the case for them. They did confirm their inn talks with several potential investors seeking a call markets after a sixty percent stock route. That made it the new focal point of concern over the
health of US regional lenders. So earlier in the week, the message that was coming out from IRO was like this, these are just one off situations. There's no contagion. I think this shows you that there is a lot more fragility throughout the sector. Then maybe they want to admit.
Yeah, they are really not telling us, you know, the full thing of what's going on. I actually read with interest tweet by Bill Ackman, the billionaire investor. I mean, look, he's talking about the financial system, so maybe's talking about something that he was talking about and I actually.
Thought it was worth reading.
He says that the regional banking system is at risk SVB depositors. Bad weekend woke up uninsured depositors everywhere. The rapid rising rates impaired assets and drained deposits, zeroing out shareholders and bondholders massively increases bank's cost of capital. The FDIC's failure to update and expand insurance regime is hammering more nails in the coffin. First Republic Bank would not have failed if the FDIC had temporary guaranteed deposits with
a new guarantee regime was created. Instead, we are watching Domino's fall as great systemic and economic costs. Banking is all a confidence game. At this rate, no regional bank can survive bad news or bad data, as a stock price plunge will inevitably follow. Ensured and unsure deposits are withdrawn and quote pursuing strategic alternatives just means an FDI shutdown over the coming weekend. There is no incentive to bid until Sunday.
After the failure. So look he's talking there.
You know he wants a better insurance regime, which I do think probably should be on the table just one that doesn't, you know, come at the cost of increasing our fees. But I thought it was actually well said in terms of how the game is structured around how these weaker regional banks you're dead in the water now at this point.
You know, all it really.
Takes is because confidence is so shaken at this point for these regionals. It only takes one piece of bad news that you might have been able to weather in the past, and you can just collapse.
Yeah, that's right, right, that's right. And the reason why this bank in particular is vulnerable is because of where it's located and what its client basis, so similar depositor base as we saw with First Republic, as we saw with Silicon Valley Bank, And so that's why investors and others are looking at this one going, h are you all going to be okay? This does not look particularly good.
So I think the FDIC point is really important. We covered earlier in the week how they just put out a report of their recommendations of how to change the
deposit insurance system. I think that's important. I think it's important we deal with that quickly so that at the very least there is some certainty because That's one of the things that was so unnerving after the response to Silicon Valley Bank is we were, you know, reporters were asking questions of Janet Yellen and others like, okay, so does this mean that effectively all deposits are insured in the entire system, and like what does that mean in
terms of who's backstopping that? And how's that going to all work out? And they really hedged, you know, she gave a different answer than Jerome Pale gave. It seemed like they were not on the same page. What's the web? So if anything, whatever the ultimate regime is going to be, they need to figure it out. They need to make it really clear. And too, by the way, they got
to stick to it as well. You can't have it then be Lucy goosey and all right, we're going to take it on a case by case basis, because then you end up with, you know, you end up with a lot of moral hazard. You end up with some people being treated, usually you know, wealthy depositors being treated in a way that is kind of unfair. So anyway, that's incredibly important. The other piece of this that Acman is very obvious to a lot of folks. Is part of what has pushed these banks off the cliff has
been the FEDS program of aggressive interest rate hikes. And let's put this next piece up on the screen. They have decided they are going to continue in that direction. They just increased rates another quarter point. But they did signal a potential end to the hikes. I think it is a major question mark where things go from here, whether they continue the interest rate hikes or whether they press pause. Powell made it very clear they have no intention of cutting rates at this point. This was a
widely expected decision. Nevertheless, this pushes the FED funds rate to the highest level since August of two thousand and seven. So it gives you a sense of how extraordinary this path of interest rate hikes has been. Just to give you a little bit of the Fed speak here of how they altered this particular statement versus the last one that is making people feel like, okay, this might be the end of the rate hikes at least for a while.
They omitted a sentence that was present in their March comments saying that quote, the Committee anticipates that some additional policy firming may be appropriate for the Fed to achieve its two percent inflation goal, So they took that line out. People took that as all of these statements, just so you know, are really carefully worded and parsed, etc. So they were taking that removal of that statement as significant in an indicator that perhaps this might be the last
rate hike. This decision to hike rates by a quarter point was unanimous, which is also really noteworthy. The post meaning statement also noted that tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring,
and inflation. Now, they did have something similar to that language in the March statement as well, but basically you could look at this as them saying, you know, we don't potentially we don't need to hike rates anymore because we already have this gigantic weight on the economy that
is probably going to pull inflation down. And you know, they have been warning as well, even the fed's own economists have been warning that we are likely to see some sort of a recession due to these rate hikes and the banking issues that have resulted.
It's really important.
Let's go and put this next one up there on the screen too, just to hammer home, like why it all matters for you, which is this massively increases all of the interest rates on credit cards. Currently, the credit card interest rate average is twenty percent as of April twenty six. That is up from sixteen percent just March of last year. Car Loans currently are at one of the highest levels in modern history. The average interest right now on a car loan is seven percent in March.
It's at least one point from just six months earlier, and obviously a lot more than where things were just a couple of years ago. Student loan rates obviously variable student loan rates, it's killing a lot of people. Currently, borrows with a federal undergraduate loan dispersed after July one are now paying five percent interests.
A year earlier it was at three point seven.
Obviously, every even one point on that is thousands of dollars on the average balance for people. And then mortgage is one where it really is just murdering people. So actually I'm looking at a graph from Politico that just came out this morning. The average monthly mortgage payment for a typical US home has grown fifty percent since January
thirty first, twenty twenty two. Currently, as it stands, home with a five percent down payment at a thirty fixed year rate is at two two hundred and thirty seven dollars. In January of twenty twenty two, it was fifteen hundred bucks. So I mean that's a ton of money. That's what twenty four thousand dollars extra per year with the vast
majority of it going to interest. So you're not even touching your principle now personally only with the you know, five percent down is pretty risky, you know, just in general terms.
Of putting stuff down.
But we got to be real about where things are with our current financial picture for most Americans, and you're just getting the rawest deal because the real estate market has basically gone flat. It hasn't gone down right like some places. It's gone down, but instead of growing thirteen percent or whatever year over year, it just hasn't grown
by any percent. But that doesn't mean that the price isn't still crazy out of reach, and you have a fifty percent increase in your overall mortgage payment, like you're paying a ton more money for basically the same house. Yeah, and the crash that everybody wanted it just didn't happen. And the reason it didn't happen is because basic supply and demand, we just don't have enough housing for most For people who want to buy a house air go, the price is sky high.
Yeah, And one rates are high. That means that there's a dis incentive also to build additional housing stock, which is so I mean, especially in a nation that has as much debt as we do. The fact credit card interest rates are up, new car loan rates are up, student loan debt rates are up, I mean, mortgage rates obviously up. All of these pieces really adds up to an affordability crisis across America. And then you add to that the fact that inflation has slowed somewhat but is
still a significant problem. I also just want to underscore something that I talked about my monologue earlier this week, which is that the commercial real estate market is something we really have to keep our eyes on in terms of bank and economic stability because you have a few things coming together. Number One, people are not working in the office the way that they used to, not anywhere close and it's not going back. So anybody who is in or around a metro area, we certainly see it
here in DC. These downtowns are totally different, and there's been a lot of ideas, Okay, we should this office space to residential space to deal with the housing issue. It's not that simple. It's hard to convert them. There's zoning issues, there's all kinds of challenges there, so it's not easy to do that. Meanwhile, half of the multi trillion dollar market, half of that debt comes due in just the next two years. And guess what it's banks
like pac West. I don't know specifically what their balance sheet is, so I'm not speaking specifically to them, but that type of regional, mid sized bank, they're the ones
that overwhelmingly hold this type of debt. And just as your mortgage rate, you know, if you're going to try to buy a house, is going up, their rates in the commercial real estate market are also have also gone up significantly, while the value of those properties is getting crushed because there just isn't the demand for office space
that there used to be. So I think that is a huge cloud looming over the market, something Charlie Mungro is worrying about that I really want to keep our eyes on, and that is obviously tied into what the FED decides to do here as well. Now there's another piece here that I want to point to. We're supposed to get the sort of big jobs report that everybody really pays close attention to on Friday, so we'll keep our eyes out for that. In the meantime, we got
the ADP Jobs Report. Let's put this up on the screen from CNBC. That report showed that private payroll surge by two hundred and ninety sixty thousand in April. Now that's a lot higher than expected. I do want to warn frequently, especially in recent months, for whatever reason, after the fact, these estimates have got consistently revised down, so it may not be as good as it looks. But the reason this is significant is on the one hand,
you're like, okay, well, that's great. If you know more people are getting hired and there's this huge job growth, that's great for workers. You know, creates a tight labor market, makes it so that they can be choosier, they can
demand higher wages, et cetera, et cetera. But the thing that cuts against that is, as the Fed is in this place where they have a giant question mark about what they're going to do next, things like this they look at as like, oh, well, we got to keep hiking rates and trying to crush the economy because clearly we haven't crushed workers enough, so it sort of cuts in both directions.
Yeah, the economy thing is just really difficult because you know, even if you look at the unemployment rate, the unemployment rate is basically fake because we have more job openings than we have actual people who.
Are in the job market.
And that's part of the problem, which is that we have what seven to ten million prime age males who are just like literally not working. That's a societal problem, that's not an economic problem, and it's.
One of those where you have no idea how to fix it. The vast majority of these.
People are either playing video games on drugs, who are basically dropped out of society and are not they don't have no interest in participating in civic life or economic life. And again, like you can't just I don't know, can't You can't interest rate cut or hike your.
Way out of that.
That's a way bigger hole of government societal approach. I've been thinking about it a lot too, just because I think we keep trying to solve things with these blunt instruments when actually we have much more downstream factors, which you know, material realize in crazy things like housing prices and all this other stuff.
Although remember we looked at that report that said most of the decrease in labor market participation was actually people who were going from like working full time plus to scaling back their hours, So it wasn't as much people who were pulling out of the workforce all together. It was more people who had had a reassessment during COVID and were like, you know what, my whole life is not my job.
So that's definitely part of it.
I'm talking about people who literally don't participate in the labor force at all.
So this is a reduction in the labor force participation rate.
But I'm saying like even in terms of the people who count to the rate specifically, they don't because they're not even seeking work. And yeah, I mean, look, that's a whole other thing that we've probably done quite a bit of work on. But I do think it is something we always have to think about whenever it comes to the way that we look at these statistics and the White House is like, oh, we have a three percent on employment rates, Like it doesn't even touch what is really going.
It's always that's always a misliking statistic. There's a lot more going on there. The last piece about this Job's report that I think it's important to note is something else that we've been trying to highlight, which is how the economy is doing. It's very uneven. It's very strange because obviously, I mean the tech sector, advertising rates, any media,
these industries are getting crushed. And in fact, if you look within these this Job's report, you have leisure and hospitality doing great gain of one hundred and fifty four thousand, Education and health services sixty nine thousand ad Construction actually fifty three thousand jobs added. Other sectors posting solid increases were natural resources and mining, trade, transportation utilities. But there were a couple sectors that are actually losing jobs right now.
One is the financial sector because of these deposit runs and bank failures, et cetera. Et cetera, lost twenty eight thousand jobs for the month. Manufacturing also took a hit that's really noteworthy, down thirty eight thousand jobs, and it
has been in contraction for the past six months. This in spite of the fact that the Biden administration has made some efforts to try to reshore and certainly, you know Biden would like to see manufacturing growth, So the fact that that sector continues to shed jobs, I think is worth noting. All right, let's get to this piece about what the hell is going to happen with the debt ceiling. Just to remind you, we are rapidly approaching
the deadline. It's looking like early June when we would no longer be able to engage in what they call extraordinary measures to keep from defaulting on any of our congressionally approved obligations. So Democrats are trying to figure out what their plan is. Biden had long been saying we're not going to negotiate. We want to clean debt, sealing, increase,
that's that. But after McCarthy was able to get the Republican House caucus to coal us around a package that they were able to narrowly pass through the House, Biden blinked. He did decide to meet with congressional leaders, including McCarthy and McConnell. So here's another piece of what Democrats are trying to float to deal with this whole situation. Put this up on the screen. The headline here is Democrats
unveiled plan to bypass McCarthy ondebt ceiling increase. I think that's a little bit misleading of a headline, just because I don't think this has actually going to work, and they make it sound like it could. But the idea here is a discharge petition through the House that would force a vote on a clean debt sealing increase. In order to successfully use a discharge petition, you have to get a majority of members to say yes to bringing
a vote to the floor. That means they would need a few Republicans to go along with them, and that seems at this point very unlikely, they say. Minority Leader Hakeem Jeffries and a Dear Colleague letter on Tuesday wrote, the Democrats play to file that discharge petition, which, if signed by two hundred and eighteen House members, would force
a vote on a clean debt ceiling increase. So far, Republicans, even they interviewed some of the more sort of like moderate ones, they're all saying no. It would require signatures of five House Republicans to force a vote. Don Bacon, who's one of those moderates, told Axios Leader Jeffries refuses to negotiate that's not how it works in a divided government. We have to govern, which means we must find some agreement.
We must negotiate. Another moderate Republican, speaking on the condition of anonymity, told Axios, I don't support a discharge petition. Biden has been doing a horrible job of outreach to moderates. They won't get that through, said another House Republican. So you know, this is an attempt by Democrats to put some pressure on McCarthy and show that they have some sort of a path to a clean debt ceiling increase. But it looks to me unlikely to work.
It's unlikely, But it's one of those where it's like a pull the rip chord situation, like a reserve shoe, where at the very last moment, if five people were willing to sign on, they could just sign on to it, it would discharge.
It come to the floor, they can amendment, they could pass it.
Then it would be a question then of whether the Senate would be So I don't think it is in any way something that's going to happen immediately, but it's I wouldn't even call it a Plan B, it'd call it like Plan E. Yeah, you know for the very very last days of what it.
Might well, it's like if there was some like major economic fallout exactly, and the moderates started getting freaked out, because these are they do in the Republican Caucus. Now you know, they have a number of members. We always point to the New York Congressional delegation, that one in seats where Joe Biden also won. They feel a lot of pressure in terms of the reelect and they do not want to be saddled with responsibility for some sort
of calamitous debt sealing situation. So you could see if there was some major repercussions or for those that are you know, particularly tied in with Wall Street, if there starts to be major market repercussions and their Wall Street donors start freaking out, then you might see potentially five Republicans being like, all right, let me get on board with this discharge petition. There is another way though, potentially. I mean we've talked before about minting the coin and
some of the other workarounds. There's a New York Times report that Biden aids are actually debating whether the debt ceiling is constitutional. So this is interesting. Yeah, so let me tell you. This is based on the fourteenth Amendment clause which states that quote, the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in
suppressing insurrection or rebellion, shall not be questioned. There are some legal analysts, not like weird kooks, with some serious people who look at this and are like, that means
that basically the debt sealing is not constitutional. And when you have these two conflicting instructions coming from Congress, one of them is, hey, spend this money and it's obligated and we've created, you know, these debts and obligations, and the other one is, don't do what you need to do to make sure to pay these things that we told you to pay that you know, the fourteenth Amendment basically comes in and says you got to honor the
obligations that you've made. So they say, in terms of how this would go, what the economic fallout would be, quote, they say, there's a broad consensus on both sides that the move risks roiling financial markets. It's likely to cause a surge in short term borrowing costs because investors would demand a premium to buy debt that could be invalidated by a court. Moody's analytics anonymist Mark Zandi modeled a situation.
What he believes would happen is there would be short term economic damage as people freaked out and this worked its way through the court system, but there would be long term gains if the Court's upheld that constitutional interpretation, because you would then remove the threat of future brinksmanship over the limit. Quote. The extraordinary uncertainty created by the constitutional crisis leads to a selloff in financial markets until the Supreme Court rules, but the economy avoids a recession
and quickly rebound. So do I think it is likely that this direction is going to be pursued where the White House just decides the stet ceiling is unconstitutional, we are not going to abide by it, and you know it works its way through the court system. Do I think they even take that approach? No, I think it's
unlikely because Biden's such an institutionalist. Jeff Stine had done previous reporting about, you know, discussions behind the scenes, and they had sort of dismissed out of hand all of the potential workarounds, but at least somebody in the administration is considering this option.
So if anybody wants to know the history behind it, it's kind of interesting. The reason why the re radical reconstructionists in Congress added this to the fourteenth Amendment is because they were afraid that former Confederate states when they were readmitted, would gain political power and would repudiate previous federal debts to guarantee instead Confederate debt incurred during the
war to back there. So basically they would repudiate like Union debts in order to try and pay off Confederate debts.
So what they did is they added this in saying that the clause would make sure that they would guarantee all of the debts that were incurred by the United States during the Civil War, the specifically the Union army, and it would also, in their view, hopefully discourage loans to future insurrectionists in the event that somebody were to try and guarantee debt, you know, to some official or whatever who had not been what was a term, I forget,
reconciliated or whatever at the time, they had to like swear an oath.
That's where the bounties for services in suppressing insurrection? Are rebellion right? That language comes from.
Anyway, fun history lesson as it's kind of interesting, you know, just to think about how all that played out and how it may now interact with the debt ceiling, and
the debt ceiling is interesting. I remember talking about this in twenty eleven because on the one hand, you know, you have the House of Representatives which is supposed to appropriate on money, which they have done here technically, but then the debt ceiling itself was not really even in question up until the twenty tens with the Tea Party era. Then all of these legal interpretations. The big problem too, though with this plan is you know, it does have to survive the Supreme Court.
Like you know, you can't just do whatever you want.
So even if you agree and you have some legal authors or theories or whatever like, it would still get challenged, no question, by the Speaker of the House.
You would just sue the president.
And given that we have a conservative Supreme Court, I don't really think this one is on the table. Of all of the unilateral options. I think mint the coin has the best choice. But as Jeff laid out in his piece, that one is not again arantee either. Yeah, in terms of the legalistic framework the Federal Reserve and their acceptance of the coin.
The way the Congress and all that would have it. The easiest way is.
Just freaking past the debt ceiling, but that's probably not going to happen.
I mean, I am in favor of them trying and all of these workarounds because I think this having every few years like this manufactured, genuine crisis occur. I think
this is an insane way to run a country. And yeah, if you want to fight over what the spending should be, etc. You fight, you fight it when you're appropriating the money, not after you've already said we're going to pay X and Y and z, and then you're not willing to lift the debt ceiling like this weird technicality that we have as like an accident of history that they have to go through with, and you're going to use that to hold the entire country hostage. I think it's terrible.
I think it's insane that we have this situation. So I am in favor of, even if there is some risk involved, trying to engage in one of these workarounds. But I think you're right in terms of the Supreme Court. Unfortunately, if the makeup of the Court was different, perhaps there might be more appetite for pursuing one of these workarounds. But I also just am fundamentally skeptical that Biden would do anything that's outside of the norms and outside of
the box because he's such institutionalists. So, yes, we will see how this all works out. Surely will So this is an interesting development. Of course, we have long been covering the fact that it is insanely corrupt that members of Congress can trade stock with regard to companies that are directly impacted by the actions that they are taking as members of Congress, by inside information that they are
receiving as members of Congress. There has been a big nationwide swell of grassroots bipartisan support to do something about this obviously insane situation. The issue had kind of fallen off the table. Every once in a while one of the parties would pick it up, and Kevin McCarthy, who's running for speaker, was before they know Republicans even got the majority, was like, oh yeah, we'll pass the stop trading ban when I'm Speak of the House. That we
didn't hear anything about it. Nancy Pelosi did like a fake effort and inserted a poison pill to make sure it didn't pass. Well, we have a new effort and it's being spearheaded by two very unlikely allies, Matt Gates and alexandri Acossio at Cortes among Also, they have like you know, bipartisan like problem solvers, Caucus centrist type people
who are involved in this effort as well. Gates was asked about his decision to work with AOC, someone he is very ideologically opposed to, and he had an interesting response.
Take listen to us, AOC is wrong a lot. She'd probably say the same thing about me, But she's not corrupt, and I will work with anyone and everyone to ensure that Congress is not so compromised. We should disallow congressional stock trading for the same reason we don't allow the referee to bet on the game.
And this is not a small amount of money.
Seven hundred and eighty eight million dollars worth of securities traded by members of Congress last year. About one in every four members of Congress is doing this. And it's not exactly like I'm elected with a bunch of Gordon Gecko's and Bobby Axelrod's take. Lois Frankel, who you just mentioned. She's been a lawmaker since I was five years old, and I'm supposed to believe that all of a sudden she's making moves like she's Warren Buffett.
Yeah, and we're about to talk about Lois Frankle specifically what he's referring to A good point, you know. To be honest with you, I'm not surprised that Gates is willing to work with AOC. I'm a little surprised that AOC is willing to work with Gates. I mean, I'm glad to see it, but I am a little surprised by it.
I'm shocked that she's willing to do it.
But the details of the bill itself are actually quite good. Let's go ahead and put this up there on the screen around the actual bill to ban these lawmakers from owning stocks. What it would do is called the Bipartisan Restoring Faith and Government Act. It's also sponsored by Brian Fitzpatrick and Raja christian Worthy, who's another Democrat.
And where they're coming.
To is one of the more stringent prohibitions on members spouses in any dependence from owning individual stocks making trades, requiring all members or covered family members who currently own any individual stocks to divest or place them in a completely qualified blind trust. Even I personally have issues with the blind trust thing, but it's one of those where, you know, willing to compromise, we can get to an actual qualified one.
It would be even as fake as some of those can be.
It's going to be monumentally difficult to get a majority of members of Congress to agree to this because they are, many of them profiting royally off of the inside information that they hold, and they are going to be loath to give up their ability to what was that crunchhaw said, better themselves, better themselves.
Opportunity to better yourself.
And to go that extra mile and do what I think should be done, which is they should all have to divest they're holding completely in none of this qualified blind trust thing. I think we have to live in the realm of political reality that that would be impossible to accomplish. That's unfortunate, but that is reality. So I think accepting some sort of compromise qualified blind trust situation
here is the best we can possibly hope for. I would love to see, you know, once we get more details on the bill, i' love for someone who's the subject matter expert to look into because not all qualified blind trusts are quick created equal. So what are the specifics of those provisions and how much teeth does it have? I think that's a really important point. But we also had some news this week that underscores why this is
so important. As they were referring to in that Matt Gates segment, put this next peece up on the screen. A Democratic Congressman Lois Frankel. She sold First Republic stock before the takeover and the collapse and bought JP Morgan stock, and of course JP Morgan Chase ends up being the massive beneficiary of this collapse because they get a sweetheart deal from the government to take over First Republic Bank.
So looks like a really intelligent, just insightful, prescient, eerily prescient trade that Frankel was able to make.
Your soccer, these guys are, I mean, there's just so shameless about their action, as you know, as Matt said, like the to somebody who has been in Congress for literally decades, and what I always just come back to with all of them is how is not enough? Like, why is it not enough to just sit with your personal finances? I just looked it up. She's worth two point five million dollars. That's plenty of money. If you want to make more money, you can leave Congress. But
it's never enough for them. You know, she's literally been in the House of Representatives for decades. That's another question. How exactly you become a millionaire when you're a House of Representative of And she's somebody who's long been on the list of trading in companies that have been influenced directly by their committees. You know, a household or what should be some sort of household name. But is such a common activity that we have to only call it
out in extraordinary times. That's why I think it's sick about it.
When you see this one where you're like, come on, really, really, yeah, I think it's always important to underscore when you look at the overall number, do you really believe that these people are consistently beating the markets and doing better than you know, people whose job it is to make these sorts of trades. No, So, yeah, it is a disgraceful, disgraceful situation. I hope that this bipartisan effort picks up substeem.
I'm really glad to see it moving forward, and we will certainly keep close track of it.
Yes, we certainly will. I hope that it goes somewhere. But you know, you never know whenever it comes to things like this. In fact, you do know, which is unfortunately every single effort has been quashed.
Let's go ahead and move on to Epstein.
We want to give everybody and update two separate things coming out, actually one yesterday and another one today. Let's go and put this up there on the screen. Jeffrey Epstein Documents, Part two. Quote Dinners with Larry Summers and movie screenings with Woody Allen. My personal favorite is mister Summers, who, of course the former president of Harvard, former US Secretary of the Treasury, one of the most influential people in US economic.
History, probably in decades.
And it turns out not only was he hanging out with Jeffrey epstcene, he was even raising money from Jeffrey Epstein well after he was a convicted sex offender. In one case, he says, quote, I need small scale philanthropy advice. My life will be better if I raise one million dollars for Lisa.
Lisa, by the way, is his wife. Mostly it will go to.
Make a PBS series and for teacher training ideas.
And it's because he.
Wanted to raise this one million for his wife's pet PBS poetry project. Now, who amongst us has not had access to millions of dollars of our own personal wealth but felt the need to placate your do nothing wife's poetry PBS poetry idea by soliciting funds.
From a billionaire.
It's just very from a pedophile billionaire or pedophile multimillionaire, whatever.
It's just such a common situation for some.
Very relatable my life will be better, Well, then spend your own one million living on a Caribbean island.
You're living in Cape Cod all these other places. It's just totally ridiculous.
But what comes across in the new Epstein documents is not just his relationship with Summers. It's the fact that Summers felt so comfortable raising money from him after years of working with him throughout the Harvard Tenure reed Hoffman the billionaire venture Capitalists. He even visited Epstein's private island in the Caribbean.
He was scheduled to stay over at his townhouse in twenty fourteen.
Woody Allen, Now that one's a little bit less surprising, attended quote dozens of dinners with his wife. Yes, sur he did, at Epstein's mansion and invited him to film screening ade Barack. We've talked about that a lot either former Israeli prime minister.
But you know, maybe we knew this already and I forgot. He says he was introduced to Epstein by another former Prime Minister of Israel, Troman for US.
Oh yeah, okay, you know you have and you also had on the list Leon Black, who was one of the richest men on all of Wall Street with a former founder of Apollo Global Management, scheduled quote more than one hundred meetings with Epstein from twenty thirteen to twenty seventeen.
Don't forget it's already blew my mind.
Well, it's already come out through tax records that Leon Black paid Epstein over one hundred million dollars quote for taxis sure that.
Must be some good tax.
Great tax adviies.
Once again, it's so ridiculous on its face. You have Jeffrey Epstin, who's not a qualified tax professional. You're worth nine billion. When you have nine billion, you have the top tax people on the planet who are available to you, who are not convicted sex offenders.
So you know, like it just begs belief.
There's a new report that came out just this morning, Crystal that I feel compelled to mention. In one day, September eighth, twenty fourteen, Jeffrey Epstein was scheduled to meet with Bill Gates, Thomas Pritzker, Leon Black, and Mortimer Zuckerman, four of the richest men in the entire country. That's just one day September eighth, twenty and fourteen, well after he had already been convicted as a sex offender. Literally, in the ten am hour, he was meeting with pritz
Gren Gates. At the eleven thirty am hour, he was meeting with Black two pm, Mortimer Zuckerman three pm, the top lawyer at Goldman and the former White House Council Katheryn Rumler five pm Leon Botstein. I mean, every single one of the people who I'm just naming here are literally like titanically powerful and rich people, which is insane.
Like, whenever you want.
To think about it, all of it, by the way was actually scheduled to happen in and around either his residence or like at the Four Seasons Hotel, And I just think, like it's such a perfect view into how all of this intersects. The last person who he was scheduled with was a quote philanthropic advisor to wealthy families, And I just can't get away from this, Like, when you're worth a hundred billion, like Bill Gates, why do
you need help raising money for anything? You have more money than God, Like you can fund anything.
You want marriage out of pocket.
That's my point though, that they are all of their excuses are bs. They don't need help raising money, They need help with something else. And the question is what is that something else? And that's what I would like to know well.
And the other question is I mean, this is clearly not just him casually meeting this person or that person that hopped on. This was a very intentional, strategic pursuit of people with wealth, power, fame, et cetera connections that he engaged in as his job. I mean, this was his job was to meet and understand all of the you know, deepest needs and desires and whims and and help solve the problems of whatever wealthy, powerful person he could get his books into, which apparently was.
A whole lot all of them.
You know, just to go back to the Lean black one, more than one hundred meetings with Epstein from twenty thirteen to twenty seventeen. I don't know if I have one hundred meetings with my parents like that is. So that's like you're having like a weekly meeting for years. Yeah, I mean, this is that blows my mind. And you know he was pushed down of Apollo Global over whatever the hell was going on here. That one blew my mind. There was also there was.
Twenty five times a year. That's actually every other week. Yeah, yeah, you do the like you are.
A busy, powerful person and you're making time for Jeffrey Epstein every other week.
Yeah, that's pretty crazy. That is cool. Fifty two weeks and.
And you know we don't have the more than one hundred, right, so you know, it's it's more than every other week. So anyway, that is fun. Okay, So there's that. There's also a couple of anecdotes in this article that I think are really worth going over. One they talk about this woman Ava Anderson Dubin a longtime friend and wife of hedge fund billionaire Glenn Dubin, invited Epstein to charity event to which he contributed in the summer of twenty fifteen.
Epstein sent her a quote funny story about checking into a California hotel with a young woman. Quote from Epstein. I went to park the car and the bellman said to this young woman, is that your father? He wrote in an email, referring to his female companion, who was then in her twenties a little old for him. And this woman, this billionaire wife or whatever, wrote back Glenn. Her husband laughed so hard. What a hilarious joke about how young the woman you're with, that they think that
she's your daughter. So he clearly felt comfortable sharing some of his preferences with some of the circle. And there was another piece in here where we talked to this guy, Barnaby Marsh, who was an executive at a large charitable fund, the John Templeton Foundation. He met with Epstein roughly two dozen times off and for breakfast at the townhouse, according to these documents, And he said, so many of these billionaires knew him. Nobody ever said watch out for him.
He said, Epstein convene people, including Microsoft co founder Bill Gates, to try to solve problems facing rich donors, such as how to make large gifts. Epstein told mister marsh that Epstein was managing money for mister Gates. Gates denies that that is the case. But I thought that quote was incredibly revealing that he's like, yeah, everybody just accepted this guy. All these billionaires knew him. He was part of the club, so no one asked any questions because he was in the club.
I I just, frankly, don't believe it's that easy. Maybe I'm wrong, and maybe I'm very naive. Like, as I come back to this, when you're worth billions and billions of dollars, every single one of these people, you have enough money to quote unquote fund whatever you want completely out of your pocket. So why do you need this sketchy guys help doing this. Clearly something else is happening. I don't know what that's something else is. I will
leave it to you to speculate. I am just saying, as you said, Crystal, you don't meet with somebody twenty five times twenty five times a year on average. That I have great friends who I don't see that often.
Yeah, close, so not even close?
Yes, ask yourself who you have met twenty five times?
It better be like somebody who is basically colleague, people, kid, your kid, your culosest closed and even then you know the close ones, don't keep them that close.
Whenever it comes to fans every other week, who do you meet with every other week in your life?
And when you're worth nine billion dollars, you know, so anyway you can take that for what you will.
Also have good news.
The private island that he had, let's go and put this up there on the screen, has been bought by another billionaire.
Stephen deck Off has agreed to purchase.
The two islands for just a mere sixty million dollars. What exactly his plans are for the island, you know who knows, probably got a great deal on it because nobody else wanted it.
They said that this was half of the initial list price. And apparently, you know, the rumor is or what was reported out as he wants to build some sort of a like resort.
Well, it already was an exclusive resort for a certain other people with other proclivities.
Kind of kind of perfect that you know, another billionaire. He sees a profit opportunity here, cour doesn't care about the history of it, going to go for the money making opportunity.
All right, let's talk about the debates.
Yeah, you guys are going to love this one. So now, apparently Cordion Media Matters wanting there to be debates is actually right wing and is just a plot, you know, against whatever. Okay, put this up in the screen. Let me read you a little bit of this. The headline is right wing media are exploiting RFK Junior as a
spoiler candidate against Joe Biden. They say, many conservative media figures are celebrating longtime anti vaxxer RFK Junior's campaign as a potential spoiler against President Joe Biden's reelection, using his entry into the primary to call for democratic debates. Oh my god, can you imagine calling for debates that's horrifying, which the usually aren't held, they say when a party
is running an incumbent. Now let me just pause and that first sentence because everything about it irritates, I mean, the framing of him as a potential spoiler. He's not running against him as an independent right right, if this was a like Jill Stein situation, who's running as you know, Green party or third party or whatever. I can see the case right, I could see how they could frame
him or as a spoiler candidate. Now, I still wouldn't accept that framing because I think democracy is good and I think it's better to have more choices than fewer choices. But I could at least accept that there is an alternative view and that this could be a damaging thing to Joe Biden's reelection prospects. He and Marian Williamson too. They're not running against Joe as third party candidates. They're
running against him in the primary. And all they want is exactly what the demomocratic base once, which is for people to be able to evaluate alternatives. Now, listen, I have no doubt that Steve bann and the other people that they quote here are they interested in sowing chaos and the Democratic Party, no doubt about it. Are they like good intention and just really want to see democracy plan and of course they don't want to see that.
But to frame this as exclusively the interest and domain of you know, right wing like Steve bannonites is just incredible. It's not just misleading, it is an out and out lie, and so let me show you how I know that to be the case. There was just a poll that was done by Newsweek and they asked people to put this up on the screen. They asked, Joe Biden voters, Okay, not all voters, just people who voted for Joe Biden last time around. Should the Democratic Party hold primary debates?
Guess what? Seventy nine percent of them said, obviously, like, we actually believe in democracy and we would like to see some primary debates. Are those right wing people looking for a Joe Biden spoiler to reelect Trump? Of course not. They just look at the reality of this very aged president and their deep concerns about the future of the country and by the way, his ability to defeat Donald Trump, and they're like, maybe we should at least have a
chance to evaluate our options. And the last thing I'll say about the cigar, if I gets your reaction, is part of the cope in that Media Matters article is all about how well they didn't have. You know, they don't normally have debates in the primaries when there's an incumbent president. First of all, oftentimes there isn't a significant challenge. And whatever you think about Mary and Williamson and RFK Junior. They're already both pulling in double digits RKS at like
twenty percent. Okay, these are significant challenges. They have nationwide followings. People deserve to hear from them, and if you have issues with them, then you shouldn't be worried about them being up on a stage. Great they can be exposed as the clowns that some people think that they are, or perhaps they will have interesting things to add to the conversation that'll be relevant and by the way, might actually make Joe Biden a better candidate if he is
able to survive that process. I think it is an insane argument to say that, oh, well, because we didn't really have democracy in the past, we shouldn't have democracy now. Like that is a ridiculous absurd you know, fig leaf to try to use to cover your anti democratic authoritarian tendencies.
Here, once again, I always come back to nineteen eighty President Jimmy Carter is weak, feckless, some would say, some would say about to get wiped out by Ronald Reagan. That was empirically true.
Senator Ted Kennedy decides to run against him.
They do have actual debates on the debate stage, they fight it out in a big primary and guess what, Crystal, he won only thirty seven percent of the vote.
You know Ted Kennedy did at that time. That's not too far away.
If you combine Mary Anne Williamson and Bobby Kennedy or and yeah, what is he his nephew? I guess rfk Junior would be Ted Kennedy's nephew. So it wasn't that long ago that you had a competitive primary with the debate where Kennedy only ended up winning thirty seven percent, and that was only in a one off. So if you have two candidates in the race or roughly around that, then why shouldn't they be treated in the exact same seriousness in way that we handled the nineteen eighty Democratic
presidential primary. It was totally reasonable, and by the way, there's a lot of evidence to say Carter was probably better off for it because it made him sharp and had to defend his record before he went into the incumbency fight against Ronald Reagan. So it's not even like it was all that bad, and it also shored up as his support because he definitively won the primary.
Again, he wasn't just handed the nomination.
The Republicans had a very spirited debate in twenty sixteen, and guess what, it didn't hurt Donald Trump. He ends up winning, and I think probably made him a better candidate for better or worse, because he went through that democratic process. Barack Obaman, Hillary Clinton had a very spirited primary debate, and guess what, it really sharpened him and made him a much more effective candidate going in two
thousand and eight. So this notion that democracy will damage the prospects of whoever emerges from the Democratic primary, I think is ludicrous. I think it's ahistorical, and I think it's just incredibly intentionally misleading. So we see the path they're on here. Number one, they just dismiss any potential challengers.
These ones aren't serious. It's like according to who because actually, if you're as American people, and this is with total media blackout, total media's mirror campaigns, still, the Democratic primary base is like, we see something there to the tune of double digit support. And I'd be very interested, by the way, to see a pole out of New Hampshire specifically of these three candidates. I think you would see a pretty interesting landscape. So they want to just dismiss
them as kooks and wacos. You have no choice because you know, none of them are quote unquote serious. Any sort of plot to have a real democratic, small d democratic process is just a right wing scheme, spoiler scheme. And you know, bottom line, we just don't think that you should have a choice in the interest of saving democracy. We should have no democracy effectively.
Yeah, I think it's completely ridiculous. I support debait I think debates are good. I'm doing my monologue today about debates about presidential debates and how there are different ways that we can fix it. And yeah, I just come back to the truth that at the times in American history when we had the least amount of direct democracy. So I'm talking here about like when senators were appointed at one point by the state legislature, which is insane in aspect, they were basically.
Just bought off.
It's like whoever the richest guy was was the person who would get himself appointed to the Senate. And it was outrageously corrupt. And even in terms of the primary system or the convention system, where you'd have like smoke filled back rooms in the pre primary age, which again not that long ago really only created in the nineteen sixties. Before that time, it was outrageously corrupt because you had the big business interest and all these other people just
pick who they decided to be was president. Now, look, I love FDR. I think he was a great president, but think about this. They selected Harry Truman. They didn't even tell anybody that FDR was deathly ill whenever he's running for his fourth term. And they effectively selected this man for political purposes with no truth to the American people that he very likely would become the next president of the United States. That's crazy, like when you really
consider it. On the merrits, it worked out. I think Truman was a good president, but it could have gone the other way. It could have gone the Andrew Johnson way, which he has well.
Also. I mean, here's the other thing. Joe Biden doesn't do many press appearances, he doesn't give many interviews. So you have a Democratic base that continues to be very concerned with electability and really wants to make sure that they can defeat you know, Donald Trump or if it's Rond De Santis or whoever it ends up being, but
probably Donald Trump. They're very interested in that and they deserve an opportunity to assess whether Joe Biden is still that candidate, and I think that there are some real questions about that. And by the way, if Biden's own team felt confident in his ability to you know, perry and debate and articulate a vision, they would be approaching the campaign with a very different strategy. Right now, there are no big campaign rallies planned. He launches with this
low key video. Now he's really planning on just trying to stay in the shadows and hope that Trump is insane enough that people are like, all right, I guess we got to stick with Joe. And he's hoping that the media, like this person did for them, will just try to convince the whole Democratic base that you have no other options, so stuck it up and vote for Joe again.
Very true, Chriscell, What are you taking a look at?
There is a new shocking report out of Louisville, Kentucky. So apparently the Department of Labor found that two ten year olds were working unpaid shifts at a McDonald's restaurant. This is just as horrifying as it sounds. According to CBS News, officials said The children were not paid yet sometimes worked as late as two am, and they quote prepared and distributed food orders, cleaned the store, worked at
the drive through window, and operated a register. Investigators learned that one of the two children was allowed to operate a deep friar that is a prohibited task for workers under the age of sixteen. Now there's a good reason kids under sixteen are barred for working the deep frier. It's really dangerous. Just a year ago, a fifteen year old in Tennessee suffered hot oil burns while working the
deep frier at a different McDonald's. Now, the owner of this offending McDonald's, Bower LLC, claimed no awareness of the fact that ten year olds were working the register, manning the drive through, and operating the deep frier. Owner Sean Bauer told CBS News the kids were not approved to be in that part of the restaurant and that they were there at the direction of and in the presence of their parents. But this is far from the first
child labor law violation from mister Bauer's company. They were hit with a forty thousand dollars assessment after the Department of Labor found they had twenty four kids under sixteen working longer than approved hours. Nor is this a problem confined to this one McDonald's franchisees. There are three McDonald's franchisees, which combined operates sixty two McDonald's that were found to have worked three hundred and five children longer than the
allowable hours. Now, this is part of a larger trend which, through new laws and violations of existing laws, is working to roll back a century's worth of child labor protections. According to the Economic Policy Institute, the number of child labor law violations has skyrocketed over two hundred percent since twenty fifteen, and we have seen a thirty seven percent
increase just year over year. A recent investigation found kids aged thirteen to seventeen employed by a meat packing sanitation company. These kids were forced to clean backsaws, brisket saws, and head splitters at meat packing plants owned by some of
the top names in big food in this country. New York Times recently published a heartbreaking report on the way undocumented kids are being funneled into a nationwide network of effectively indentured servitude, exploited for low wages, backbreaking labor, and horrifying conditions, all because their youth and immigration status make them easy prey. Just as disturbing is the successful industry lobbying effort to make some of these harmful practices perfectly legal.
This year alone, eight bills have been pushed in six different states to roll back child labor restrictions. Arkansas made headlines when Governor Sarah could Be Sanders signed a law repealing restrictions on fourteen and fifteen year olds as a group of children appearing rather bereft looked on. We covered
recently how Iowa has gone even further. A newly signed law brings us straight back to dickens, with young teens working on assembly lines, in meat coolers, in construction, and in industrial laundries, and a circle back here to McDonald's illegally employing literal ten year olds. One of the main drivers behind these changes is the powerful National Restaurant Association, a giant lobby for big food interests including McDonald's. More perfect union basically got one of their lobbies to admit
that they wrote the draconian Iowa bill. The timing of this push to kids into meat lockers and handling deep friars, by the way, is no accident. For my entire life, employers had the upper hand with workers in every single way. They could treat the most disposable, they could crush any fledgling union attempts, they could steal their wages, and they could pay them very little. Well, a lot of this is still going on, but now workers are trying to
get immodicum of power back. Unemployment is low, labor market is tight. That gives individual workers more power on their own, since they can leave an abuse of low paying or exploited of jobs with a higher level of confidence that they will be able to find something else. In fact, even as inflation continues to buy there's some decently encouraging things happening for the lowest wage workers. Working paper from the National Bureau of Economic Research finds that wages are
rising quickest for the lowest paid workers. That this trend has actually reduced inequality. That's a phrase I have not heard in my entire life. This trend has also shrunk the college wage. Premium retailers like Target and Walmart have been forced to hike wages in order to retain or attract the workers that they need to staff their stores. And obviously they're not doing all of this out of
the goodness of their hearts. But rather than have to raise wages, big business would rather maintain their record breaking profit margins and just find cheaper and more vulnerable labor. And that, of course, is where the kids come in. Employers love child labor for the same reason today as they did a hundred years ago. Kids are cheap, they can be more easily manipulated, and crucially, they're less likely
to form a union. In fact, it was the labor movement which successfully pushed the first federal child labor protections. All the way back in the nineteen thirties, photographer Lewis Hine traveled the country documenting kids in dangerous and horrible working conditions. This shocked and horrified America. At the same time, activists made the case of the country that child labor was bad for everyone except big business because it also
depressed wages for adult workers. That was a compelling argument at the time, as the nation was struggling through the Great Depression. Organized labor made the success of this multi pronged effort possible. Now, in our current moment, unions have been beaten back. Union density is at historic lows. However, employers especially those in the service sector, feel the threat
of potential unionization like they haven't in decades. Successful union drives at Starbucks, Rii, Chipotle, and elsewhere they have made fast food and retail a real target. The desire to avoid a union is another often overlooked reason that big business prefers to rely on young teens for their workforce or even apparently ten year olds. Now, if there's one thing I've realized in the past few years, it's that
bad old ideas they're never really dead. They're just dormant, waiting for a moment of opportunity to rear their ugly
heads again. Whether it's the post dobs whores, women being forced to bleed out in a parking lot until they're near death before doctors will actually treat them, or new effort to trap spouses in unhappy or abusive marriages by rolling back no fault divorce laws, or kids being sent to clean head splitters in meat packing plants when they should be you know, doing homework and getting ready for
school or just being kids. We must apparently remain ever vigilant to make sure that rights remain intact and that our fast food is not being served up by Happy Meal age children. These days, nothing is sacred. This story has sparked a national outcry just because of the tender age of these because.
They're so young.
And if you want to hear my reaction to crystals model become a premium subscriber today at breakingpoints dot com.
All right, sorry are we looking at well.
In nineteen sixty four, Marsha McLuhan published a landmark book. It was titled Understanding Media the Extensions of Man. In the book, McLuhan coined a popular phrase that you might have heard quote, the medium is the message. The theory behind it is that focusing on the content produced in mass society is less important than a study of the medium producing the content, as in, don't look to critique a specific TV show, look to cable TV and the
distribution itself. The medium is the message a very useful analytical tool. Another way to think about it is systems versus individual actors. Many neoliberals today speak about how politics is broken. What they really mean, though, is their party is good and the other party is bad.
But when people like me say.
Politics is broken, we're seeing the whole system, both parties. We're taking a step back. It's not about red and blue. We're talking about the construct itself. Why that is poisonous. That's the framework I'm using to look at our current presidential debates, events which both mean everything and are meaningless.
We have reams of political science evidence that exists to say presidential debates have almost no impact on the eventual outcome of an election anymore, there is decent evidence to say they are matter a lot in the context of primary debates intra party, where hyper committed voters want to see how candidates fare against each other and see if they could ever see them as president. Yet that's not the only reason to have debates, is it. Sometimes it's
not just about whether it would change in election. Sometimes it's the only forum that exists where candidates can get pressed directly about what they actually think, not just from their opponent, but also by the press. That's why I was heartened to see some news that the mainstream media is actually freaking out about right now, the Republican Party, and specifically Donald Trump's effort to ditch the Commission on
Presidential Debates. Top Republican officials on Trump's behest recently met with the largest TV networks in the country to pose an interesting question to them, what would you do if the party ditched the Commission on Presidential Debates and sets up a new one outside.
Of the existing system.
The TV networks did not give an answer, but the leak is no coincidence. The Commission on Presidential Debates is a perfect example of how flawed and terrible our current system is and how much the dying establishment media maintains control on our discourse. For historical context, the Commission on Presidential Debates is not some hallowed institution. It was only created in nineteen eighty seven by the chairs of the Republican and Democratic parties.
But well, a lot of.
People don't know is that the reason this was created was specifically to rig the system by both candidates. You see before the Commission on Presidential Debates, the League of Women Voters sponsored presidential debates from nineteen sixty to nineteen eighty eight. By all accounts, the actually did a fantastic job. To this day, you can go back and you can watch debates from nineteen sixties to nineteen eighty eight, and you can see much more substance than any of the debates in the cable TV.
The reason the League.
Itself pulled out from the debates, is one that pertains to our subject. In nineteen eighty eight, the Ducaccus and Bush campaign negotiated a secret memorandum of understanding where the two campaigns met and hashed out terms of how the debate would go, including but not limited to the selection of questioners, the composition of the audience, hall, access for the press, and tons of other issues like that. The League, to its credit, said no, we're not doing that. We're
not going to give you any of that. Our debates are independent and we are up to us. So what do the campaigns do? They ditched the League and they created our current system. The Commission on Presidential Debates is sponsored by massive fortune five hundred companies, so called luminaries of society. These people together partner with establishment media journalists
like Chris Wallace last time around for debate. For our current debates from that point forward, they negotiate the awful and staid format that we have all become used to, the so called head to head debate in round one, where the answers are fake and they're short, and all the rules are agreed to beforehand, then you learn absolutely nothing. The famous town Hall debate for the second one, that too is rigged, it's a TV event, and then finally the Foreign policy debate.
They've become predictable.
Affairs where Americans learn nothing and again to reiterate this is by design. The entire reason for the Commission's existence is specifically because campaigns and major parties want as much control as possible, even they seem to have gotten carried away, though in fact, one of the reasons the Trump campaign doesn't trust the Commission is because during the scheduled second debate, the selected moderator was c SPAN Steve Scully. Trump ended
up missing that debate because he contracted COVID. But there was one issue with Scully. He was actually an intern for Joe Biden in his college days. I mean, come on, there are a lot of liberal journalists in this country. Can't you at least select one that didn't work for one of the guys on the stage. It's just absurd. Now, the only reason he didn't get more attention is because that debate never happened. But it does reveal how deep
the rot inside the Commission has actually gone. It's time to just blow up the Commission on President Debate it's time to kick it back to an open system. Let chaos reign, because inside of chaos we might.
Actually accidentally get information.
And let's basically anyone who should be able to bid for both of those candidates get a format, and let's change the rules, because I think all of us can agree that the current system is not working for us. Unfortunately, though as I already said, this is less likely to happen. Biden's an institutionalist. He almost certainly is going to stick to the Commission because he likes so much control they're willing to give him.
But this is an opportunity.
Nonetheless, if Trump pulls out, who knows what's going to happen next time around. And when it does, people like us and all of us will be waiting. And I think that's the fun part around this. I mean, the Commission on Presidential Debates is just complete bs.
And if you want to hear my reaction to Sager's monologue, become a premium subscriber today at breakingpoints dot Com.
Joining us now is Ben Smith.
He's the editor in chief of Semaphore and he's also the author of a great new book, Let's go and put it up there on the screen traffic, genius, rivalry and delusion in the billion dollar race to go viral Ben Very apt timing with this new book, given the current end of BuzzFeed News, of which you were once at the helm of the news that we might see a bankruptcy soon from Vice. Many of the titans of the twenty tens media era appear to be on their
way out. It's something that you were literally involved in, and now you're writing about it in retrospect. First of all, why do you decide to write the book as kind of a look back on something as you start something new? And how does it relate to everything is going on right now?
Yeah, and thank thanks for having me on and congratulations on the show.
Thank yous.
The you know I was when I was in After I left BuzzFeed in twenty nineteen, I went to The Times and was the media columnist for a couple of years, and I guess found myself feeling like it was, as you say, kind of the end of an era, but also then wondering kind of okay, what was that did we all just live through?
You know, where where did it begin? And why?
And I had, I think been on the margins of it as a young reporter in New York in the early aughts and kind of knew that there were these new things, these new blogs sites called Hoffington Posts, but I was off blogging about politics and New York politics sort of a different thing, and really stepped into the middle of it really twenty twelve when I joined BuzzFeed and heard all these stories about like the weird origins, and was fascinated by that and just thought, I don't know,
partly because we all had a little bit extra time on our hands during the pandemic, that it would, yeah, that it would be interesting to go back and just try to understand where this all started and who where, you know, how we got to where we'd gotten to where we are now.
Yeah, And what do you think are some of the qualities that defined the ascendant business models and kind of insos of these you know, what were truly media superstars at the time, BuzzFeed News, Vice News in particular, they had huge valuations. People were throwing money at them. This was thought, you know, this was the new big thing. What do you think were some of the com menalities there?
Well, I think you sort of, you know, have to put your head back in what feels like this very far away moment of the early two thousands where you know, the mainstream media, the Conde Nasts and New York Times is in television networks really weren't on the Internet in any meaningful way, and if you were, like most of us on the internet, they weren't, you know, they felt totally disconnected, and they had actually also blown the biggest story of our careers, the Iraq War, in large part,
and so there was a sense that I think people forget that they were, that people were ready for something really new and were suspicious of these institutions that was deserved and so the you know, yeah, these these places, in differing ways, were sort of waging an assault on the establishment and using these new tools to tell different stories different ways, sometimes very explicitly. I think Gawker really was like, We're going to rip the masks off these
hypocrits and show them what they really are. That was sort of its mission, and at times in really delightful ways, like this site Jezebel, which actually it was women's blog that they launched in seven and immediately did that and just these very kind of literal senses. They put out a bounty, a ten thousand dollars bounty for unretouched photographs.
For one of these magazines, which at the time was like a really revelatory thing to do.
And somebody in fact did like steal or take a photo of Faith Hill, the country singer that had where she still had her smile lines at her freckles, and brought it to them and they triumphantly posted it. But it really did, you know, put pressure in these magazines to represent women more like they were like, which is sort of a small metaphor for what they at their best I suppose we're trying to do.
I read the Yeah, the New York Times piece that you published around Jezebel, and I thought it captured everything both about the blogging era but also about audience capture. That's something you and I had talked a little bit about before, Ben, just about how some of the very early signs of what was to come were all present
within that. One of the things that I think were a lot of people got excited, both investors and I think people working in it was feeling that they were on the forefront of something new at the time.
So in retrospect, how new.
Was doing news on the Internet, and what are some of the lessons for you know, people like us, people like yourself that are still trying to actually build something new.
So I do think digital media represented a big cultural shift. I mean I think that, you know, it's sort of for historians of the future to look back, but the extent to which you know, if you wanted to distribute information widely, you needed to control a printing press or a television tower or then a capable channel. I mean that was real, like that is how the world was organized, and that suddenly the gatekeepers couldn't really hold the gates, you know, for better and for worse. And I think
that's all still being sorted out. Really did change society and politics and the media, and you know, and there were these huge opportunities, and you know, I think initially one of the things that's again so interesting to go back was that it was assumed that this was fundamentally
kind of a progressive space. Facebook in particular was where college kids hung out, so obviously that was a place that would support Barrock Obama, and that these were all tools that would in some sense culminate in Barack Obama's election in two thousand and eight. And I think one of the big surprises for me in reporting it was how close your people, Saeger, the kind of populist right
wingers were all along to that. You know, the guy who founded four Chan, which I'm not sure you want ownership of, but was working out of us for his offices. And Andrew Breichbart was a co founder of Huffington Post. Yeah, and Steve Bannon was hanging around there as well, and you sort of and I think in some ways it was best suited for a kind of anti establishment, unconstrained right wing politics that grew up in the twenty tens
and used these tools to their fullest extent. In some sense, the election of Donald Trump is then the real culmination of all of it.
No, I think that's true.
So what do you see us bringing about the end of that era? And what media era do you think that we are living in or entering now?
Yeah?
I mean I wish I knew with total clarity, but I you know, I think ultimately it's always going to be I mean, these aren't machines.
It's ultimately the consumers.
People get sick of it, and I think the same way people were sick of the old media twenty and four.
By twenty sixteen twenty seventeen, the notion that wow, you can just go on Facebook and like hear from everyone and you can get cat pictures and thoughtful articles and insane politics like all in one place no longer felt so fun and interesting and people, I think, I mean, I feel very disoriented looking at social media now, and it's not a great experience for telling you, like, hey, what is happening in the world actually, And so I think there has been this swing of the pendulum in
reaction essentially toward you know, in particular kind of trusted institution, individual voices. I think it's people are, for whatever reason, across different areas a little less connected to brands and
more to people. But I think that's, you know why the kind of stuff you guys do is very successful, one of the one of the many reasons co but looking for people who can help synthesize this flood of information and organize it and not just and I think you know, it's it's and and of course like that's our bad at Semaphore that that you know that people are looking for kind of human transparency and the journalism. For me to say here's what I found, here's my opinion.
But you know, there's room for someone reasonable to disagree with me and then also to do the service of trying to bring in voices from all over I mean, and not just feed you our own perspective.
Yeah, I think I think it's very important for people to understand, which is that a certain point, like there's so much information out there that help making helping people make sense of all of it is actually you know, where a lot of the news business has gone. But something you always have emphasized and that we always keep in the back of our minds too, is, at the end the same time, though nothing does beat new information, nothing does beat scoop.
So whenever you look at this fusion of like new and.
Old journalism, what do you think like a happy medium looks like for the future media companies like yours, like ours and all the others wants to come.
I mean, I think we're headed into a much more splintered universe where the thing is, like the crazy thing about the Facebook and Twitter era was there were just these two giant platforms that totally dominated the news business and everyone, every journalist in some sense or most of them were thinking about them, and not only people were also thinking about like, you know, making broadcast television shows. But those two platforms dominated. I don't think we're I
don't think I really see that even now. I don't think those two platforms are as dominant anywhere near as they were. And so you're looking at a much more splintered, diverse landscape without sort of this is the single trick that will you know, succeed.
Yeah, And what do you see as the sort of current state of Twitter in particular, which for so long has been such a you know, shaper of elite discourse in particular, and was at times, and we really leaned heavily and still do on Twitter to surface stories for our show. But I'm finding personally I rely on it less and less. It's just, you know, it's not like an ideological anti eline thing. I just find it less useful these days. Do you think that that is the case.
Do you think that Twitter and other social media platforms are actually going to become less important in terms of the news media business.
And they've obviously have become less important, And that's right, partly because it used to just do this very useful thing of when you wanted to know what was happening, you could look at Twitter and it would tell you here's what is happening in the world, right, And now you look at Twitter and you just know what is happening on Twitter, which I find riveting as a long time Twitter user, and it's fun and weird.
But you know, but I have to go somewhere else if I want to know what the news is.
And so I think, you know, I think Elon has made mistakes and has kind of has sent like an ideology about how the news media works that isn't really connected to reality, but also that it was probably doomed like that. These social platforms are fundamentally these social institutions that get cool and then that people get sick of and you're mostly there because your friends are there, and
then they leave and you leave. And doesn't mean these doesn't mean that Twitter and Facebook won't exist in ten years, right. I mean, I think Reddit is a great example of a social platform that you know, is great and is incredibly powerful and fun and interesting and I go on many days of the week, but isn't culturally central, isn't central to news and politics.
Yeah, I think that's all really smart I encourage everybody to go buy the book. We all the linked down in the description of this video. Ben really appreciate you joining.
Us, sir. Thanks for your time. Ben, good to see you.
Thank you for having me.
Guys, absolutely all right, guys, thank you so much for watching. We really appreciate it. Thank you as always to all the monthly, yearly lifetime memory signing up. We love you all, every single person. You're all equal in the eyes of Breaking Points and the community, just because you are all contributing and helping us scale up. So much of the discussion that we all just talked about is a big reminder to me and on vindication honestly of our strategy.
You know, we have not taken on one scrap of business debt here. Everything is financed through a cash flow process, exclusively, almost entirely by our premium subscribers. A lot of the buzzfeeds and all these people they raised billions of dollars.
They had bosses who were not their own body.
I don't know if anybody's taking notice of what's going on right now over at barstool.
Where I saw something. What is going on?
All right, let's spend some time, maybe we'll clip this out.
Let's let's clip this out seper segment on this because this is actually a very vindicating I think for a lot of my theories and our theories around how to run him at the company. So Barstool had this guy who worked for them, and he was on the air and he was singing along to a rap song because he had the lyrics. He had the lyrics that were in front of him. One of the words that he rapped on the air was the N word. Okay, so he did that. He turned wide as a sheet. He
clearly was deeply apologetic about it. He said, I shouldn't have done He's been very apologetic. Barstool then is owned or currently is owned by a larger company called pen Gaming and the gambling institution.
Barstool did not want to fire him. They want to discipline him whatever.
Pen Gaming, the top company came in over the top and overruled both the CEO of Barstool and Dave Portnoy and said, no, we're going to fire this guy.
He's literally getting and as part of the talent.
Now, whether you agree on whether you should be fired or I personally don't think you should be fired, Whether you agree or not. The fact is is that the people who run the company didn't want to fire him, but because they sold the company, they don't have control over their own employees. And now there's this whole split
in the barstool community. And it's very messy because you have Dave Portnoy openly saying I did not want to fire one of my own employees, and at the same time, you have people who work at Barstool who are like, I don't agree with this from my bosses. You have Barstool fans who are all like part of the cold not in my barstool moment. They're like, I ride or die for Barstool because I don't agree, you know, with
so much of the mainstream culture. Now Portnoy is like, I'm going to stop selling the cancel Cancel culture.
Sweatch.
It's just a messy situation, and it's one of those where, yeah, you know, at the end of the day, and at least he was honest. People were like, you're a sellout. He's like, yeah, I sold it, sold for the cast. But that's a really cautionary tale.
Where reminds me of the eight exactly. Yeah, because we talked about this before but as but Nate Silver said, as your client another twenty ten's personality. But Nate Silver out at his own baby five thirty eight. Why because he sold it's created me, that's his thing, like that real brand. Anyway, we will not do that.
It's a caution just to show people like listen, you know you it's a deal with the devil in any respect. Sure, you know Portnoy it did certainly well. Many people there also did well. But the core of the brand was about dudes online shit posting, going against the culture. And it's like whenever you sell you know, even to and by the way, the claim is, since we're going.
To do a segment on this and this is gonna be posted.
The claim is that pen gaming would have faced regulatory pressure by gambling regulators. Come on that what look maybe no personally what bullshit?
No, that's deplete bullshit.
So you're one subsidiary employee company made a mistake and said something which look, you know, discipline whatever. Okay, but the idea that if he still remains with the employee of the company, that you were going to get lose your regulatory license, not just in one state, but like all states.
I don't. I don't believe that for a second.
That's that is nonsense. I mean, look, if you want to fire the guy they just fired, it goes. Don't use to what we were saying about Tucker Carlson, number one rated the news host when they're like, you're gonna wear a sweater, right, yeah, he wore the sweater.
That's the point.
That's it right there, That is it right there.
That is why we ask people just so you know, for premium subscriptions because we're not.
Going to be in this issue.
We will not do that.
You know, We're not going to be where.
Somebody you will wear the sweater, yeah, or somebody's gonna tell us what to wear, or somebody's gonna tell me. Listen, we fire somebody's because they deserve to get fired, not because somebody's going to tell me that they.
Need to get fired.
And that is where you look at that and they're real perils. So one of the things that we are committed to here is making it so that you are the people who help fund and support all of our work here. And we will if we have to scale slower, so be it, because ain't nothing in the world is worth.
Somebody telling you how to run your own affairs.
Keep the overhead low, build step by step like we have been, and rely on your support, which you guys have come through in amazing way. Programming Note I will be out next week.
Yes that's right. Everybody's say congratulating married this.
Weegain, So I'll be out for next week. But Ryan Graham will be in this chair and we'll do a fantastic jobs.
We'll hold down the four for all of you, and we will see you all later