Breaking Points with Krystal and Saagar - 12/2/25: Black Friday Shoppers Crushed, Trump Frees Convicted Fraudsters, Hegseth Throws Admiral Under Bus Over Venezuela

Episode Date: December 2, 2025

Krystal and Saagar discuss Black Friday shoppers crushed, Trump frees convicted fraudsters, Hegseth throws Admiral under bus for Venezuela strikes.    To become a Breaking Points Premium Member and watch/listen to the show AD FREE, uncut and 1 hour early visit: www.breakingpoints.comMerch Store: https://shop.breakingpoints.com/See omnystudio.com/listener for privacy information.

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at breakingpoints.com. Let's turn now to poverty. There was an absolutely fascinating essay that went very, very viral amongst the economy literati. And it was about the poverty line. And as you guys may know, the federal poverty line is a set standard, where it's currently set is very, very low. There's long been in a discussion about whether that poverty line really captures things. But this new essay by Michael Green argues that the federal poverty line should be higher and not just higher, a lot higher. Let's put this up here on the screen. So what he writes very specifically is that the U.S. poverty line, which is currently set to keep a family out of poverty, is 32,150 for

a family of four. Michael Green did some math, quote, for a family of four to afford housing, health care, child care, and other necessities, he calculated that they would need at least $136,000 a year. He says it should be more than four times that a figure would mean that the majority of American households are living in poverty by his metric. This idea, which they specifically say published on sub-stack, and again, it made a huge,

it went so viral amongst economists and others. Basically what he's saying, the more like conservative faction is saying, it's ridiculous, quote, disconnected from reality, laughable to put poverty line far above the median income in the United States, which is some $83,000. But the thing is, is that if you read it, it does make sense to me. The only quibble is about the definition of poverty.

So the question is, is does poverty mean destitute or does it mean not getting by? I guess we've learned of it as destitute, but not getting by for a long enough period. I don't know. I mean, maybe it does count as poverty. Yeah. And I think that's one of the more, and by the way, that's why part of the whole discussion is really frustrating. And anybody who has lived in a high cost of living area, we all know people making 100, 200,000, even 200,000, who are not close to making it. Like, not close to achieving even modestly more than what their parents did. I'm not going to sit here and call it poverty, but I would sit here and say, that's a systemic failure. And that's part of why I appreciate the essay, because all the man, you guys should go read it, just specifically about the way that he breaks. down all the costs, all the costs, basic necessities, which we've talked about here before as well. The fact is, is like upward mobility, especially in a higher cost of living areas, which, no, you don't have to live there, but that is for most of the economic activity is,

is mostly unattainable for anybody who makes immediate household income. That's a systemic issue, and it didn't always used to be like that. That's the bottom line. Yeah, and so here are his estimates of using what he describes as conservative national average data of the, the, the Baseline costs, the sort of like participation costs so that you can be in, you know, normal standing in society and participate in like a normal way with society. Child care, most expensive. $32,000, $7.73, $32,000 per child care. Housing, $23,000 plus.

Food, $14,000 plus. Transportation, $14,000 plus. Healthcare, $10K. Other essentials, $21K, required net income, $1,18, and then you. add taxes on top of that, you're getting 136, 500. That's where he gets the numbers from. And he says, you know, listen, the quibble that I get from people is, you know, yes, it's good to reevaluate where the poverty line is. I think everybody agrees that the way of calculating is certainly outdated. I can go into more on that in a moment. But they're like, listen,

you know, if you're getting a landline, you know, you're putting in things here that are way more expensive than just the essentials. So, but he points out in order to participate in society, like back when the poverty line was established, you needed a landline, which cost you, you know, a minimal amount per month. Now the same landline is even cheaper,

but that doesn't allow you to fully participate in society. You need that $200 smartphone. And so while certain costs have gone down, the cost of being a full participant in society has gone up dramatically. And then, of course,

these categories have gone through the roof. All of these areas, except for food, are places where, you know, costs have gone up and up and up. We talk all the time about child care housing. This doesn't even factor in the cost of, you know, a college education, which is another extraordinary expense. And so this helps to capture why so many people who, when you look at their income, you're like, you should be doing fine. Why so many people are like, no, but I'm drowning. But like life is really difficult. And I feel like I'm getting behind. And I feel like things are going to be more difficult for my children. So it's a very fascinating look. You know, with regards to the poverty line, what he points out is when it was established,

food was made up about a third of overall spending. So the poverty line was established as three times whatever the average food budget was. And they have kept that metric the whole time, even though now food is only maybe five or six percent of the overall budget because these other categories have increased in cost so much. And also, you know, child care that used to not be something that needed to be considered at all because you typically had a one-income family. That income was sufficient for this level of like baseline societal participation. And if you had child care, it was like relatives usually who would, or neighbors who would take care and look after the kids. So now that you basically have to have two incomes in most

instances in order to make it in society, that second income, it's not like that's all just going to the bottom line. The first $32,000 of that second income is just going straight to some other person and take care of your kids. That's the first part. So then you have to be clearing more than that to even make the second job worthwhile. And that's the other, you know, that's like the two-income trap. That's like the hidden costs that have been added on to families. And then the other thing that he points out, which is, you know, part of why I support universal programs versus this like neoliberal piecemeal social safety net thing that we do is that if you are very low income, life is going to be difficult. I'm not saying you've got it easy. But you do have some government supports, right? You're going to qualify for SNAP. You're going to qualify for Medicaid. You're going to get subsidies with regards to child care as well. There's going to be some help. And at certain levels, as you climb up the income scale, there are these cliffs where, okay, now I'm not getting SNAP. So now that all is on me. Okay, so whatever income I'm earning, I have to subtract out of that what I was previously

getting. Okay, now I go up another level. Now I'm not getting Medicaid anymore. I have to pay full freight for healthcare. That's an extraordinary expense. So whatever additional I'm earning is basically all being eaten up by those additional costs. And you can see how that allows politicians to turn middle class or working poor people against the very poor because they're like, this is not fair.

This person's working less than me and getting way more. and they're right. It's not fair. But the problem isn't that, you know, person who is also struggling. The problem is the design of the system. The problem is the, you know, those who have rigged the system for their benefit and are keeping everybody immiserated in this way. Yeah, I mean, the way I always look at it, especially with this one, is not only the two-income trap, but also the prison of a lot of this for you're damned if you do and you really are damned if you don't. Also, $30,000, we'd be lucky to have $30,000 child care where I live. We have I think the seventh highest in the United States,

which is only beaten in Northern Virginia by Arlington, which is number one in the whole of America here in the DMV. $150K over a five-year period. So the point, though, actually I think it might be $1.6. It's crazy. So it is crazy. And that's after-tax income. That should be a house.

It is a house in some places in this country, but that's the issue. What you see inside of this is not only from housing, but also health care. because he says 10K, I'm lucky for pay $10,000 for health insurance. That's a long dream after you have a child. If you have an employer-sponsored health care, I guess you're lucky to pay for it, even though technically is part of your old benefit package.

So the total cost of what could be your wages is much lower. And when you really dig down into his logic, I just think it's, like, very obvious that really what people are quibbling about is the definition of poverty, and what we should be talking about is making it. And if you don't make it for long enough and what I've really been convinced, if you don't make it enough in the period of between 20 years old and 35, I actually, I'm not going to say you're screwed because like anyone can beat the odds. But statistically, those are the most formative best years of your life where you're laying the foundation that you can build something on top of. And if you miss that period where everything is on a downward trajectory,

which is where I think things are right now, then you're going to end up in. an area at 35, 40, 42, which is where some of these first-time homebuyers are. And you're just way more behind schedule, which delays all kinds of things societally and creates just a deep amount of problems. So the point of his essay was, I think it was a wake-up call for elites who are in charge. And especially boomers, again, you know, I hate on boomer, but part of the thing that drives me crazy is that typical boomer attitude of like, oh, just figure it out when you're in college or something. They don't look at overall educational inflation. They have no idea what it's like for people to be graduating of 20, 30, 40, $50,000 in debt at a 7%

interest rate. And especially if you have a graduate degree, if you're pursuing something like that. That's just debt in the student loan realm applies, though, even at the more basic level. Everyone always talks about trade school and accreditations. Accreditations are expensive. You know, they're not cheap. And so even whenever you take out loans for that, then if you have to meet your, you have to meet your payment obligation, you're on a newer salary, you're making this. of housing is some 50, 60% higher, then you have no idea what it's like to live on that very thin margin. And that's just not where things used to be. The one thing I will give them is I do think that we need to readjust a lot of expectations because this is something

I've been thinking about with the whole starter home thing. A lot of starter homes from the 1970s and 1980s would not pass something that builders would want to do anymore because they build big, more luxury items because people are buying homes are mostly richer and have to have a lot more money. We do need to bring back those Levittown models of like 1,500, 2,000 square foot houses, which are not, look, they're not like nice, you know, it's not like full of marble and a bunch of the shit, but who cares? Like the place to park the car, modest area in the back, enough space, dining table in a kitchen. That's it. All right, yeah, you're not going to have a palatial living room. That's okay. I think most people would sign up for that.

I really do. Yeah. But that option doesn't exist for it. It's the alternative. It's just to be renting forever and like throwing money to a landlord instead of ever building any wealth. and getting on that home ownership ladder. Like, of course, but that, yeah, there's a giant hole in the market. And, yeah, because it doesn't, it's not as profitable for developers. So it's not what they pursue, which is why you have to get the government directly involved in some fashion. I think the child care part of this is so important to highlight. And a couple things that I've been thinking of from a policy perspective,

affordable child care was part of the build back better bill that ends up getting killed under Biden. So, you know, real missed opportunity there to actually do something that could have had such a tremendous benefit for families across this country. And it's also, I think, an undersung part of Zoran's agenda in New York. You know, I think the buses and the rent freeze and the grocery stores got more attention, but much more transformational, actually, would be the affordable child care proposal, which he's trying to work with Kathy Hochelon to get implemented. If he's able to do that in New York City, it would be such a huge deal and such a big win for those families. And the other thing that this guy points out is, hey, you know, we talked about COVID and we talked about the stimulus checks and, you know, as an explanation for why people had more money in their bank accounts, that's certainly part of it and the super dull and all those sorts of things. But one thing that we really didn't account for or talk that much about is the fact that people were at home. So they did not need to pay for child care. Yeah. And there was a mini baby boom at that time.

Yeah. So this gigantic, this gigantic expense, the single largest budget item for most any family, that was taken off the table. And people did not have to pay that. No, it was stressful in many ways having to deal with your kids while you're trying to be on your Zoom call or whatever. But financially, you saw bank accounts got larger for many people during that period for, you know, for most people. And so I think that that was an under reported and under discussed benefit. of COVID, I mean, you know, a silver lining, sort of. And one of the reasons why there were these sort of contradictory economic indicators because just not having to pay child care was such an incredible boon for people, and you're not eating out at work, and you're not having to pay for gas or this much maintenance on your car because you're just at home. So altering that expense landscape was really transformational for a lot of people. And those were with 2020 prices.

Now imagine the current prices. Oh, my God. Every time you go out to eat, you want to blow yourself in the head. Is this even worth it? Is this even, I don't even drink and my bills are like $50. But then you go to the next store and you're like, oh, it's not all that much. Right. That's right.

Yeah. Seriously, like when you don't drink alcohol and the bills start tipping up near the $100, you're like, what the fuck is going on? It used to be like $20. But I'm not fault in the restaurants. I get it. Yeah, they're doing what they got to do. The child care thing, the one thing I would do want to say is, as I have said,

is as I truly believe free childcare as in other people paying is not a good idea. I think what it should be is to preserve optionality, as in basically like a voucher or a tax credit system. So if people don't want to work, mom or dad, then they can be paid to do that. Or you can spend that dollar and you can go spend it at child care, but you need to cap a cost. This is a program that's been implemented in various other countries. It's been very successful. The point, though, is that if you subsidize only childcare, it actually screws over the non-working mother or father because it means that they don't get the subsidy.

It's kind of a societal design that pushes people into the workplace if they don't want to be. So the thing is, it's like, we have to design, child tax credit was a very rudimentary form of this. The point, though, is you have to make it very specifically so people can do the family unit the way they want to do.

And there's a lot of data that a lot of women and men would not work if they didn't have to. Most people, a lot of people would work if they have to. The point, though, is not to say to say, nobody should work, it's to say, what's easier whenever you actually want to have a kid? That's why the mini baby boom under COVID is criminally understudied. It happened for a reason.

Like you just said, there's a lot less stress. People had more money in their bank accounts. It's pretty obvious. Now, I'm not sitting here saying that the Hungarian model or throwing money at all of this is going to boost the fertility rate over 2.5%. Like, that's not going to happen. There's too much evidence that throwing money and making it acceptable, simply is not really enough to compete with modernity. But that doesn't mean that you shouldn't

try to get marginally better than where we are right now. You shouldn't make life easier. Right, exactly. Right. It's not a good reason. Even if it's not, you know, so they breed more, but just so that their quality of life is better. I mean, I let's put the next piece up on the screen. So much of the illusion of prosperity in America is just like a figment of our imagination. So I saw these headlines after Black Friday of like, oh, Friday spending is up. I'm like, oh, that's interesting. Maybe that's a good sign. But then you start to dig into the numbers. And here's Business Insider.

They say that Black Friday shoppers are now relying more on buy now, pay later plans. Here's how that could backfire. And put the next piece up on the screen. This person, Adam Carlson, on Twitter, or Cochran, sorry, broke down a bunch of the numbers here. So he says, yes, there was a 9.1 increase in spending on Black Friday from last year. But there was a negative 1% in total item volume from last year. prices were 7% higher. Consumers bought on average 4% fewer items. So they spent more and they got less. Okay, that's number one. And an 11% increase on buy now pay later use. Klarna specific, which is one of these buy now pay later companies, specific use was up 45% by volume since last year. Roughly 11% of all Black Friday spending was financed through BNPL. And 84% of all purchases were financed by credit cards were most, six. 67% of those consumers expect to not pay the full balance in the first month.

So overall, a total of 95% of Black Friday shopping was financed. 95% and 67% of that was financed on debt that consumers do not expect to be able to pay in the next 30 days. Because it's one thing if your habit is just I put it on the credit card and they pay off the whole credit card for points or whatever. But we're talking about two thirds that are saying, no, I am putting this, I am taking out. more debt to buy the Christmas shopping, the gifts, and I do not expect that I will be able to pay that off in the next 30 days. And then he opines, which I think is just, you know, an inevitable outcome of this. This is a sign of a weakening and stretched consumer. So, you know, the top line number, oh, Black Friday sales, your spending was up. Consumers must be doing fine. But you dig

one layer deeper and you see people taking on more or more debt, spending more and getting less and being unable to pay those debt balances off in the next 30 days. This is where my inner Dave Ramsey comes out, though. It's like, what are we doing doing Black Friday shopping when two-thirds of people are? It's like, you shouldn't be buying. I mean, that's where the personal responsibility is. But I think probably there's also a lot of people. It drives me nuts.

I think there's probably also a lot of people who consolidated their shopping to Black Friday to get the deals to try to get the best, you know, the best price they possibly could as also a cost-saving mechanism. At one point, let's do that debate in the future. Did you see that Ramsey host, Jade Worshaw? I love her, by the way. She went on Fox News, and she's like, by the way, not all adults need Christmas gifts. I agree with her. I agree with her, okay?

Pouring all this money into Amazon and Jeff Basil's his pocket so you can get some gift that the guy barely's going to open for your great uncle or something. Sorry, it's fucking stupid. In my family, we paired back this year where we're doing, everybody, you know, did like Secret Santa drawing. And so instead of everybody buying for everybody, it's like, okay, you're getting for this. We do the same thing in my wife's family. In my family, we're like, we don't need gifts or we're Indian. We don't need to sell back credit.

That's the way it should be, if you want to. But just in general, though, the amount of crap that we pour into Black Friday, I mean, go on Amazon today. Look at their Cyber Monday deals and look through everything that you're supposedly saving money on and then go check what the price was five years ago. And then be like, do you really actually need it? That is one, though, where people are way too comfortable with credit card debt. And, you know, you're just, you're digging yourself into a hole, which is very, very. very, very hard to get out of. And that's, but at the same time, I get it.

You know, I talk here about weed and sports gambling and all that or stuff. If you've got nothing else going on in your life and buying cheap shit at Target or on Amazon makes you feel better, I do understand, like, where that comes from. Well, this is like our social contract. You're not going to own a home,

but you can get some random shit at Walmart. Like, that is the social contract that we have been given. So, no, I don't blame people for availing themselves of the only benefit of the social contract. I'm going to give them a little bit of blame, putting yourself in a credit card. There's that viral video

that the Ramsey team just did of Disney, where they went to Disney and they're like, how much debt to people have? People have 100,000 dollars net going to Disney. Yeah, come on. Look, I'm raised Indian. We don't do that. People want their kids' Christmas to be special.

You know, I mean, there's a lot of pressure on parents to make it memorable and it's a very consumerist society. It's a societal problem. I get it. But, you know, be a hero and stand up for your, for, for, don't go into debt. Make sure your children don't have to grow up in a debt-free household.

But look, at the same time, I'm not going to shame people too hard because we can't talk too much about poverty and the system and how it's all rigged against you. If the only outlet you have is some 28% high-interest credit card debt to buy some new headphones or a PS5 or whatever, I do understand how things you get channeled into that. And that's ultimately why, like, who's the villain in this discussion, which I think is totally fair. Curry, and this is Gentleman's Cut. I think what makes Gentleman's Cut different is me being a part of, you know, developing the profile of this beautiful finished product.

With every sip, you get a little something different. Visit gentlemen's cutbuburn.com or your nearest total wines or Bevmo. This message is intended for audiences 21 and older. Gentleman's Cut Bourbon, Boone County, Kentucky. For more on Gentleman's Cut Bourbon, please visit gentlemen's cut bourbon.com. Please enjoy responsibly. Smith. This is Jacob Goldstein. And we used to host a show called Planet Money. And now we're back making this new podcast called Business History about the best ideas and people and businesses

in history. And some of the worst people, horrible ideas and destructive companies in the history of business. Having a genius idea without a need for it is nothing. It's like not having it at all. It's a very simple, elegant lesson. Make something people want. First episode, how Southwest Airlines use cheap seats and free whiskey to fight its way into the airline business. The most Texas story ever. There's a lot of mavericks in that story. We're going to have mavericks on the show. We're going to have plenty of robber barons.

So many robber barons. And you know what? They're not all bad. And we'll talk about some of the classic great moments of famous business geniuses, along with some of the darker moments that often get overlooked. Like Thomas Edison and the electric chair. Listen to business history on the IHeart Radio app, Apple Podcasts, or wherever. you get your podcast.

You know the shade is always Shadiest right here. Season 6 of the podcast Reasonably Shady with Giselle Brian and Robin Dixon is here dropping every Monday. As two of the founding members of the Real Housewives Potomac were giving you all the laughs, drama, and reality news you can handle. And you know we don't hold back. So come be reasonable or shady with us each and every Monday. I was going through a walk in my neighborhood

out of the blue I see this huge sign next to somebody's house The sign says My neighbor is a Karen No way I died laughing

I'm like I have to know You are lying humongous y'all They had some time on their hands Listen to Reasonably Shady from the Black Effect Podcast Network on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. Speaking of villains and fraud. Yes, indeed. So Trump has pardoned a new fraudster.

Seems to have a soft spot for them. Perhaps he sees kindred spirits here. And Caroline Levitt yesterday got asked about this particular commutation. So this was this guy who basically ran Ponzi scheme, defrauded, you know, was found gillard. of defrauding over there were over 1,000 people who testified to those submitted statements to the court talking about the way that he had stolen their life savings. And we're talking, we're not talking about billionaires here. There's like teachers and nurses and firefighters and stuff who had their life ruined by this dude. Trump decided that he deserved a commutation

of his sentence. Caroline Levitt got asked about that. Let's say a listen. Why did the president commute the sentence of David Gentile recently? He was a private equity executive. He served 12 days out of a seven-year sentence, the prosecutor said he defrauded $1.6 billion with thousands of victims, including veterans, farmers, teachers. Why was he important? He issued a commutation for Mr. Gentile, who's the former CEO and co-founder of GBP Capital Holdings. Unlike similar companies, GBP paid regular annualized distributions to its investors. In 2015, GBP disclosed to investors the possibility of using investor capital to pay some of these distributions rather than funding them from current operations. Even though this was disclosed to investors, the Biden Department

of Justice claimed it was a Ponzi scheme. This claim was profoundly undercut by the fact that GDP had explicitly told investors what would happen. At trial, the government was unable to tie any supposedly fraudulent representations to Mr. Gentile. In short, again, this is another example that has been brought to the president's attention of a weaponization of justice from the previous administration, and therefore he signed this commutation. Let's put E3 up on the screen so I can get into some of the details of what this guy was convicted of. So the headline here is Trump-free's fraudster just days into his seven-year prison sentence.

By the way, this guy was convicted alongside his partner. The partner is still in person serving the sentence. He had a lesser sentence than this guy, but he did not get the commutation. I'd be pretty pissed if I was that guy. Anyway, they say in court filings, prosecutors said that, Mr. Gentile and Mr. Schneider over several years used private equity funds controlled by Mr. Gentile's company, GPB capital, to defraud 10,000 investors by misrepresenting the performance of the funds and the source of money used to make monthly distribution payments. More than a thousand

people submitted statements attesting to their losses, according prosecutors, who characterize the victims as hardworking everyday people, including small business owners, farmers, veterans, teachers, nurses. I lost my whole life savings, one wrote, adding, I am living from check to check. In a statement after the sentencing in May, Joseph Nasella Jr., the U.S. Attorney in the Eastern District of New York, said Mr. Gentile and Mr. Schneider had raised approximately $1.6 billion from individual investors based on false promises of generating investment returns from the profits of portfolio companies, all while using investor capital to pay distributions and create a false appearance of success. The sentences, Mr. Nosella added, were a warning

to would-be fraudsters that seeking to get rich by taking advantage of investors gets you a one-way ticket to jail. So, I mean, the structure of this classic Ponzi scheme, take in a bunch of money, make a bunch of big promises, and then instead of actually developing, you know, generating returns that you can use to pay off your investors, instead they just would use new investors money to pay off the old investors, that's what's called a Ponzi scheme. And that is what this guy was found guilty of. So, you know, we haven't discerned in this particular case, whether there was some direct, you know, whether this guy was friends with Don Jr. paid some whoever who was hunting buddies with him or, you know, friends with Peter. We haven't discerned

what that particular connection was. But we have seen a pattern at this administration of fraudsters and specifically fraudsters with direct connections to Donald Trump getting let off the hook for their white color crimes and it is quite disgusting. Yeah, if you read after they say he raised $1.6 billion from individual investors

based on false pretenses and investment. It's literally as classic as a Ponzi scheme as it gets, but the White House is saying it's actually not... Why are they getting involved in whether something is a Ponzi scheme or not?

Is it maybe because somebody influential helped to convince them. As you said, I would love to see the behind the scenes on that. You don't just get a commutation from the president of the United States, especially from this one without somebody somewhere saying something. And by the way, this is part of the issue. This is all part of a pattern now of a lot of these paid play. Let's go to the next one, please. This is about this Ponzi schemer who got Trump, clemency, then got a new 37-year term. Did you guys hear me correctly? Is that a convicted Ponzi schemer who's 24-year prison term was commuted by Trump in 2021, was sentenced to another 37 years behind bars for

stealing $44 million from investors after he was released. Eliahou Weinstein was sentenced Friday for defrauding investors who believed their money was buying COVID-19 baby formula and first aid kids bound for Ukraine. Instead, use the money to repay early investors and for personal expense. like gambling in casinos and buying real estate. That is despicable. Yeah, incredible. And the other thing when we were preparing for this segment,

the thing that was crazy to me is like I didn't even like this guy who got reconvicted and it's just like doing schemes instantly after Trump, you know, originally commutes his sentence. I didn't see news articles about that. At another time, that would be a huge scandal. And then put this next one up on the screen. This is E5. This was another one.

I mean, it barely broke through. that this even happened, this tax cheat, who got pardoned after his mom, who was a big fundraiser for Trump in general and attended this $1 million dinner, after she goes to this dinner, lo and behold, her son gets a pardon. Oh, gee, wonder how that happened. Um, the allegation, not even the allegation. I mean, he was convicted of this. This guy was running and there was actually his, his mother and him were running this nursing home conglomerate. And you know how you're supposed to as a business owner withhold taxes from your employees that you send to the federal government and then you know then they pay off whether they have to pay more or less at the end of

the year but there's you know tax withholding he was withholding the money and just keeping it and spending it on yachts and vacations and luxury goods and whatever which i'm like not only obviously is that wildly unethical and illegal and wrong but how did you not know you were going to get caught? Like, that is, it seems to me like something's so easy for the IRS to figure out what's going on here. And so he commits this blatant fraud, just out and out steals cash from his employees, spends it on yachts and vacations, et cetera, and then gets a pardon from the president because his mom does some fundraising for him. It's disgusting. It is disgusting. I mean, we really genuinely like the pardon power is out of control. And do I have any hope that

this is going to be changed. It requires a constitutional amendment. No, I do not. But I saw Rokana calling for, hey, we got it. We got to do something about this because this is crazy. And Trump, of course, takes it to the most grotesque level. But it's not like he's the first to abuse the pardoned power. Of course, we saw what Biden did with it. But Bill Clinton, what are you pardoned brother or whatever? I mean, it's always like sketchy shit that happens with the pardon power, especially at the end of the administration. He didn't just part of his brother, by the way. Remember Michael Milken or any of these other people? Oh, that's right. Yeah. Yeah. No, absolutely.

Like, there's a lot, like, this, the origins of, like, sketchy, rich people buying pardons goes all the way back. Yeah, and what it used to be is they would do it like Biden did at the end of his term when it's like, yeah, there's good people aren't going to like this, but whatever, I'm out of here anyway. Now Trump is just normalized. No, I'm just going to pardon the fraudsters, the January 6th rioters and like all these white-collar fraudsters and Republican members of Congress like George Santos. I'm just going to do it all the time.

And eventually, there's going to be. so many, you're not even going to keep track and you're not going to really care anymore. And this is just how it is. Do something about it. I have this power is like the power of the king and I'm going to use it as such. And it has a major implication. We're about to talk about, you know, Pete Heggseth and whatever because anyone who is in Trump's good graces knows that they can commit a legal act and be like with impunity because as long

as they stay in his good graces, then they are likely. to get the benefit of the pardon. So they don't really have to worry about whether or not they're following the law. It creates a whole class of people around the king who can act with impunity because they benefit from the king's favor

and are able to do whatever they want with no consequences. I mean, one of the things that people don't appreciate is how monarchical the president can be. I was kind of telling you this yesterday. The origins of pardon power go back to the time of the Constitution when the idea of a Republican, small R, leader

was kind of anathema all across Europe. And so there were a lot of debates for all of these people who were former English subjects of like how can we possibly confer authority onto our leader who is democratically elected but who will retain the respect

of the monarchs of Europe who, you know, they don't disappear until, I don't know, 1914, 1918, right? So 200 years or 150 years or whatever after the Constitution is actually being written. So they put in a lot of these pardoned powers And it actually was a debate there at the time.

What eventually basically comes through is they're like, no, like because he's democratically elected and as a check against a judicial branch. But the most convincing argument at the time was that the pardon power was necessary to quell and to quash like post like vindictive feelings after insurrection or rebellion. So if you think back to Andrew Johnson or how Lincoln potentially would have used the pardon if he had lived, like that was one of the arguments that were really pushed through the Constitutional Convention. They did, though, envision. They're like, what if the president uses it to cover up treason and co-conspirators? This was raised by some of the founding fathers

eventually didn't really went out. But yeah, I mean, I do think that this is part of the problem. The pardon power is crazy. It's actually insane. Yeah. And it's one of those where at least you could, I mean, you could imagine a process where like it has to be approved by Congress or something. But this just like, no, I'm going to just give blanket immunity. to anyone who's nice to me creates a really fucked up system. Totally. And then you have multiple presidents

who have pardoned family members, Roger Clinton, that was a famous one back in the 90. I mean, Biden's pardoned for hunters. Look, I know it sounds quaint or whatever, but it's actually great. So like any and all crimes, you are absolved.

How can you possibly have that? Like, it's nuts. And then multiple billionaires and others who are, look, they always are able to be like, oh, it was unfair to me. The milken one, remains the craziest. One of my favorite books was specifically about Michael Milken and it's by James

Stewart specifically about the whole like insider trading arbitrage scandal back in the 1980s. And Rudy Giuliani was one of the people who helped prosecute them. And then he later becomes a lobbyist and he's like, actually, you should pardon Michael Milken. That's, I mean, that's what they got away with. And this is the first Trump administration. It's totally nuts. I'm Stefan Curry and this is gentleman's cut. I think what makes gentlemen's cut different is me being a part of developing the profile of this beautiful finished product. With every sip, you get a little something different. Visit gentlemen's cut bourbon.com or your nearest total wines or Bevmo.

This message is intended for audiences 21 and older. Gentleman's Cut Bourbon, Boone County, Kentucky. For more on Gentleman's Cut Bourbon, please visit gentlemen's cut bourbon. Please enjoy responsibly. I'm Robert Smith, and this is Jacob Goldstein, and we used to host a show called Planet Money. And now we're back. Making this new podcast called Business History about the best ideas and people and businesses in history.

And some of the worst people, horrible ideas, and destructive companies in the history of business. Having a genius idea without a need for it is nothing. It's like not having it at all. It's a very simple, elegant lesson. Make something people want. First episode, How Southwest Airlines Use Cheap Seats and Free Whiskey to Fight Its Way into the Airlines. The most Texas story ever. There's a lot of mavericks in that story.

We're going to have mavericks on the show. We're going to have plenty of robber barons. So many robber barons. And you know what? They're not all bad. And we'll talk about some of the classic great moments of famous business geniuses, along with some of the darker moments that often get overlooked. Like Thomas Edison and the electric chair.

Listen to business history on the IHeart Radio app, Apple Podcasts, or wherever you get your podcast. In early 1988, federal agents raced to track down the gang they suspect of importing millions of dollars worth of heroin into New York from Asia. We had 30 agents ready to go with shotguns and rifles and you name it. But what they find is not what they expected. Basically, your stay-at-home moms were picking up these large amounts of heroin. They go, is this your daughter? I said yes. They go, oh, you may not see her for like 25 years.

Caught between a federal investigation and the violent gang who recruited them, the women must decide who they're willing to protect and who they dare to betray. Once I saw the gun, I tried to take his hand and I saw the flash of light. Listen to the Chinatown Sting on the IHeart Radio app, Apple Podcasts, or anywhere you get your podcasts. Let's talk about Pete Hegseth now briefly because the show's going long, but I do want to touch on them because it actually relates directly to this. It appears that Trump and Hegseth are effectively throwing this admiral who was involved in the first boat bombing that, you know, it was revealed to have been this double-tap strike, which we talked about yesterday, two survivors remained. and then they, you know, they do another drone strike to murder those other two survivors. Now, I think the whole thing was only, I think the first strike was illegal. I think the second strike was even more clearly illegal.

Like, I think it was all murder. I do not think we are at war with drug traffickers. I don't think they have the authority to do this. But if you accept their logic, which again, you shouldn't. But if you accept their logic, then that second one is almost clear. It's like a textbook definition of a war crime. Literally in the UCMJ manual, where they talk about when it would be appropriate. appropriate to disobey orders. The example they use is two survivors clinging to a shipwreck.

That is the text, literally the textbook example that is used of this is a time when you should disobey the orders because they are so clearly unlawful. So that's why this is getting so much attention. And Pete, we covered yesterday, did not really deny the reporting. Of course, objected as the idea that it was illegal, did not deny the reporting. And then yesterday, he and Caroline Levitt, you know, from the podium, really, seeks to position the decision making as having not been really with Pete Hegset, but with this admiral who was involved. And I'll get in a moment to why this is relevant to the pardon conversation, although you guys can probably put the pieces together here. But let's go ahead and

take a listen to F3. This is Caroline Levitt being asked about this double tap strike. Is the administration deny that that second strike happened or did it happen and the administration denies that Secretary Hexstead gave more? The latter is true, and I have a statement to read for you here. President Trump and Secretary Hegsef have made it clear that presidentially designated narco-terrorist groups are subject to lethal targeting in accordance with the laws of war. With respect to the strikes in question on September 2nd, Secretary Hegeseth authorized Admiral Bradley to conduct these kinetic strikes.

Admiral Bradley worked well within his authority and the law, directing the engagement to ensure the boat was destroyed. and the threat to the United States of America was eliminated. So Admiral Bradley, so Pete directed Admiral Bradley. And then, oh, he definitely was within the laws of war. But they're really shifting the decision making from, you know, the original report was that Pete had said, kill everybody. And then that was the order that led to this double-tap strike. I also want to point out, saga, people are surfacing.

You, at the time, because I don't know if you guys remember, they shared the first bond. of the boat, not the second part, but the first part they shared on Twitter and was bragging about. And Pete was doing a whole like victory lap around this. And he talked about how he watched it live and how deeply involved

he was in this whole process. Now he's trying to position himself like, oh, Admiral Bradley was totally within his rights, but it was totally his decision, not mine. Yeah, can we go? Let's skip ahead to F7 just to show this. So Pete says let's make one thing crystal clear. Admiral Bradley is an American hero, a true professional and has

100% support. I stand by him and the combat decisions he has made on the September 2nd mission and all other since America is for... If you are men and women who are serving in the armed forces, how can you possibly think that these people are going to have your back when they're the ones who are putting you potentially in legal jeopardy and then hang your ass out to dry whenever anything gets even remotely hot? At least have the courage to stand up and own the overall attack. Now, let's go to the New York Times story, F5. Everything is murky.

Stick with us because we will eventually get to this. Hegset ordered a lethal attack, but not the killing of survivors, officials say. So they interviewed five people. I'm assuming basically everybody goes on the record here, or on background here for who is actually involved. What they said is that Hegseth told them go and kill people on the boat.

they do the initial strike according to them he didn't say after the survivors existed go and kill them bradley ordered a secondary strike to quote fulfill or bradley ordered a secondary strike this is where everything becomes complicated what they say is that quote before the attack he had briefed them on his execute order to engage the boat with a lethal force but they did not address what should happen if people survived. What then happened is that Admiral Bradley had an intended second strike, and the intention of that strike is kind of unclear, as in was he going in to trying to kill the survivors? Was he apparently going in to try and destroy the rest of the so-called drug cargo, or by the way, no evidence of that, but at the very like of this second drug cargo of the

rest of the boat. So what they say is that in real armed naval conflict, it is lawful to fire on a partly disabled enemy warship that is continuing to maneuver or fire its guns, even if there's a wounded sailor aboard or shipwrecked sailor clinging. But if the warship signals it's out of the fight by ceasing firing and lowering its colors, then it becomes, this is the problem, though. These are drug boats. Well, okay, there's your boats. They say are drug boats. And the two people on there, they don't have color. It's not the United, you know, it's not the British Navy versus the the Nazi, yeah, they're not firing on anyone. There's nobody, well, yeah, exactly.

I mean, there's no evidence they're firing on people. They never cleaned that either. They're saying that the drugs on board are the ones that are an imminent threat to America, that they're narco terrorists. So it's like, what the hell is going on here? And this is part of what, look, this is going to get bogged down in tediousness where everyone will say, oh, technically the point is that the strikes are bullshit, all right? They're just bull.

Like, that's why even getting into all of this like, well, the second strike, no. they have a memo which has never been released. It's a secret memo, which is, it reminds me of the secret NSA spying from back in the 2000s, where they're like, we have determined that the strikes are legal. Can we see the memo? No, you can't see it. Okay. We have determined these are terrorist groups and that even though Congress has never declared war, that we are in an armed conflict and thus have the authority, this is even sketchier than the drone strike authorities during the war on terror. But I do also want to say what a lot of people are pointing out is that all of this happened during the war on terror. And that's the problem, is that this became

normalized and has now moved into the Caribbean with the same bullshit sketchy legal authority that we bomb Somalia, Yemen, Libya, Afghanistan, Iraq, how many times have we gone through all these strikes? You see people on target, see one, people were like, oh, we used to do this all the time in Afghanistan. I'm like, yeah, that's not a defense, though. That's the issue, isn't it? Well, and I think to me, you're right about the, like, getting into the, the weeds in this misses the point in a couple of ways. Number one, the whole shit is illegal. It's all the first strike was illegal.

The second strike is illegal. The whole operation is illegal. It's unconscionable. These are all, this is not even war crimes. This is murder. Right. Okay. That's in one way that the details missed the point. But the part that matters is the fact that they are scrambling

to say, oh, Pete had nothing to do with the second strike. Tells you they are actually worried about the judgment of what this meant and the legal grounds, the very shaky legal grounds on which it stands. So that to me is the importance of this squabbling and trying to nitpick the exact details

of who said what and when and who is technically responsible. And Pete in the White House aggressively, we stand behind Admiral Bradley and the decisions that he definitely totally made all on his own on that day. That blame shifting is, I think, what's really notable and shows you a level of nervousness because what do we have now?

We have a bipartisan Senate and a bipartisan House and a Rokana once again stepping up involved in this, bipartisan House investigation into what the hell happened here. So this is where you get to, okay, let's talk again about these pardon powers that Trump has used so expansively. Imagine you are Admiral Bradley and you are not, you know, a household name with all the cover of, you know, all the elite cover that comes with that, not that admirals aren't their own form of elites, but we'll put that aside for the moment. Okay, you're being asked to testify now. What happened on that day? Are you going to contradict the White House and their version of events when you're worried about your own ass and your potential legal liability? Are you going to

contradict them when you know that the key to you staying in legal good graces is the president's pardon power. And the last thing you want to do is piss him off, even if it means that you have to lie and cover up what actually happen on that day and what you actually think about it. That is the landscape that exists now. And so that's why, you know, these pardon powers is not just about these, even though that's bad too, these fraudsters who are being let off the hook. It's also about the way it shapes behavior of people inside this administration right now today and the ethical and moral landscape and the choice array that it sets up for. them. So that's why this is all very significant the way they're setting this up and the way that

they're framing it. And, you know, I think it's, it's, this is one of the first times where we've seen some Republicans get a little bit nervous, express some concern, and even in some cases, some outright disapproval about the, you know, the lawlessness with which this administration has conducted itself in these operations. Here's the, you know why, is that they are putting all of these people in such a shit situation. Absolutely. Bradley, he's a so-com commander career Navy SEAL.

He should not be worrying about whether his ass is legally on the line or not whenever he's in the middle of an operator. He's in a shit position, right? Because they're like, well, the SEC DEF said it's legal, or SEC War, sorry, I apologize. The SEC War said it was illegal so we can go ahead. And now all of a sudden, this guy

who's a career naval official, Navy SEAL, is now a name who's going to be called and subpoenaed. and before? What is he supposed to do? Right? And then what about the guys under his command? Allegedly, this is supposed to be Steel Team 6. We have the Tier 1 special operators who, again, they're used to going on these types of missions. They probably didn't even really know what the legality situation of, and now all of a sudden, they are now, and they're like, oh my God, like, are we going to get called in before Congress? They should never have to worry about that.

That's why the process. They will be. Yeah, they will be. So the process is supposed to work. Congress declares war, we're good, done, dusted, right? You have an authority, laws of war. That's why even, you know, reading the naval warfare thing, they're like, oh, if they lower their, it doesn't apply. Right. And that's why we have all these, you know, processes and all these other things in place. And it was sketchy even under the 2001 AUMF against terrorism. Now, we'll get to that. Like, the fact is, is like, we normalized a lot of this behavior, which set the terms for this. But this one is even crazier because it's here. It's a domestic, supposed to be domestic law enforcement thing, that then just gets determined active conflict, which is also

part of an ideological regime change operation in Venezuela, which is why the whole thing is just, the whole thing is just completely insane. And so what they've done here to these, to these operators, it's unconscionable because they put them in a horrible situation. Like the civilian leaders are the ones who I, who are 100% should own this. And the fact that they're trying to pass this off to a decorated U.S. Navy Steel Socom commander, total bullshit. Yeah. Bullshit. I mean, it really is.

And here's the thing is like, I keep going back to that article about how these nonprofits that provide legal advice to service members, how they've seen this uptick and calls where people are calling them like, what do you think about this? And they said that it was the higher level. It was like not, you know, the rank and file. It was higher level people who were in decision-making positions because they have some awareness of this way this normally functions is not functioning now. I no longer have faith that there's even, you know, some JAG and some process where there's any kind of a legal justification that at all remotely passes muster being prepared here.

And so they're having to themselves become like lawyers. And, you know, if you're in the military, you're going to be schooled in the laws of war, you know, that's part of your training. And I assume the higher you are up the ladder, the more integral that is to your training. But you're still not a lawyer. And now you're having to question everything that comes in and say, well, is this, like, what am I going to say about this? When if I get called in front of a congressional committee and under oath have to testify, what am I going to say about this? If the Democrats take power, it's only my ass is charged with a war crime. Like, how is this all going to go?

That's where they are right now. So, you know, I think this is probably pretty eye-opening for a lot of people to see them so brazenly pass the buck like this and try to wash beats hands of responsibility. And the last thing I'll say about this whole dynamic and part of why I think this is kind of breaking through is because Pete Hexsat, even, you know, putting any sort of ideological like valence aside, people just feel like he's chaotic, like he's been a shitty, shitty at his job. I think that's evidenced by the fact that, you know, he's not really integral. He's not on this inside Marco Rubio's Steve Whitkoff team that's involved in these big decisions. He's been somewhat sidelined in that regard.

His leadership has zero confidence with the Pentagon. A lot of people just don't like this dude. And one thing I've seen in, you know, whether it's in media or in other spaces, is when, you know, there start to be some cracks in the facade. If people really love you and they appreciate you or they respect you, then they'll sort of circle the wagons. And if they hate you and they are pissed off at the way you've handled yourself or perhaps the way you've knifed them or knife them in the back in some instance,

that we have some awareness of, guess what? Maybe they're not going to be there to protect you. Or maybe they're going to be the ones leaking. Maybe they're going to be the ones who are providing information that leads to your downfall.

That's where those interpersonal dynamics start to become very, very important. Right. That's what's happening with Cash Patel. Like, remember? These are Republicans in the FBI who are like, yo, this guy's a clown. Yeah.

About this dude, his insecurities and his temper tantrums. Same thing will continue. Because of his own incompetence. Yeah. All right. So there you go. Thank you guys so much for

watching appreciate it we'll see you all later i'm stephen curry and this is gentleman's cut i think what makes gentlemen's cut different is me being a part of developing the profile of this beautiful finished product with every sip you get a little something and different. Visit gentlemen's cut bourbon.com or your nearest total wines or bevmo. This message is intended for audiences 21 and older. Gentleman's Cut Bourbon, Boone County, Kentucky. For more on Gentleman's Cut Bourbon, please visit gentlemen's cut bourbon.

Please enjoy responsibly. I'm Robert Smith, and this is Jacob Goldstein, and we used to host a show called Planet Money. And now we're back making this new podcast called Business History about the best ideas and people and businesses in history. and some of the worst people, horrible ideas and destructive companies in the history of business. First episode, how Southwest Airlines use cheap seats and free whiskey to fight its way into the airline is. The most Texas story ever. Listen to business history on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Atlanta is a spirit. It's not just a city. It's where Cronk was born in a club in the West End.

A four world star, it was 5.59. Where preachers go viral. And students at the HBCU. You turned heartbreaking into resurrection, where Dream was brought Hollywood to the south, and hustlers bring their visions to create black wealth. Nobody's rushing into relationships with you. I'm Big Rube. Listen to Atlanta is on the IHard Radio app, Apple Podcasts, or wherever you get your podcast. This is an IHart podcast, guaranteed human.