Breaking Points with Krystal and Saagar - 12/28/22: House Dems Move to Block Trump 2024, Pete's Tax Payer Private Jets, United Airlines MASSIVE Boeing Deal, The Future of Tik Tok in 2023

Episode Date: December 28, 2022

In this special holiday round up we discuss House Dems attempting to BLOCK a Trump 2024 run, Pete Buttigieg's rampant use of tax payed funded Private Jets, James Li covering United Airlines massive order of BOEING planes, and Marhsall Kosloff hosts interviews on Tik Tok's Risk of Being Banned in America.To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/AUSTIN LIVE SHOW FEB 3RDTicketshttps://tickets.austintheatre.org/9053/9054To listen to Breaking Points as a podcast, check them out on Apple and SpotifyApple: https://podcasts.apple.com/us/podcast/breaking-points-with-krystal-and-saagar/id1570045623 Spotify: https://open.spotify.com/show/4Kbsy61zJSzPxNZZ3PKbXl Merch: https://breaking-points.myshopify.com/ Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

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brought to you by AARP and the Ad Council. All right, guys, we have a new effort from Democrats to try to block former President Trump from running for president again. This goes back to his actions on and around January 6th. Let's go ahead and put this up on the screen from Common Dreams. They say, you don't get to lead a government you tried to destroy. House Democrats move to block a Trump 2024 run. Here is the lead here and the justification they're using. They say more than 40 House Democrats introduced legislation to bar Trump from the 2024 ballot, citing the 14th Amendment Clause prohibiting insurrectionists from holding federal office. They go on to explain Section 3 of the 14th Amendment bars from federal office

anyone who, quote, having previously taken an oath as a member of Congress or as an officer of the United States or as a member of any state legislature or as an executive or judicial officer of any state to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same or given aid or comfort to the enemies thereof. Section 5 states that Congress shall have the power to enforce by appropriate legislation the provisions of this article. So they're saying if you took an oath to the Constitution and then you basically engaged in an insurrection or rebellion, you are barred from federal office and Congress has the power to enforce this by appropriate legislation. I sort of had to go back to the memory bank because right after January 6th— Yeah, we talked about this on after January 6th, there was a lot of discussion of

this mechanism, of other mechanisms to keep Trump from running for office. I mean, my position has been for the Democrats and the Republicans the whole time. If you were going to make this kind of move, that was the moment. Yeah, obviously. It's like, why are we playing this entire movie over again? It's so funny because not even the top Democratic leadership has signed on to this, despite the fact that some 40 House Dems are pushing it. I don't know. I mean, it's like, what do you hope to really accomplish at this point with this? You either move then, you come at the king, best not miss. You went at him and you missed.

Like, at the end of the day, there's not much you can do about it. And actually, at this point, I don't even know why you would go through with this when, look, of course, there's a chance that Trump could still win the presidency. But clearly, like midterms did not go his way or even close to his way. That's what I would just focus on. So actually easier to accomplish. Just keep branding all Republicans as MAGA, stop the steal and elevate them. That's the right thing to do. I think at this point, we've had enough examples of, you know, Democrats really trying to undermine Trump, to remove him from office, to impeach him, to persuade the Republican base that this guy is a disaster and they shouldn't go along with him. I think we've had enough chances of that to realize he is not going to be gone until the Republican base decides they are done with him.

And there might have been a chance for the Republican Party elites right after January 6th, and this is something I've talked about a lot. You know, Mitch McConnell, kind of trial balloon out there of maybe we will vote to convict him in the Senate. Maybe we really will remove him from office and bar him from running again and effectively put it out there. And a couple days later, you know, it looked like the base was getting back behind him and the initial, some of the initial horror and shock of January 6th started to wear off. They were getting their narratives together too and, you know, in defense of him. And he effectively backed down and maybe there

was a chance then, maybe not. But at this point, it's just it's not going to happen until and unless the voting public in the Republican Party decides they are ready to move on from him. That may well happen. And, you know, clearly, American people as a whole decided in 2020, they were ready to move on from him. And I think even if he ends up being the Republican nominee, which I think there's still a good chance of, I find it much more, I find it much harder to imagine that the general public at large is going to elect this guy as president again. And ultimately, you know, the rejection of the people is the ideal end goal of the whole Trump era. Totally agree. Yeah, I far would better have it happen democratically again than any other

way, which I always think is the best course. Secretary of Transportation Pete Buttigieg, it seems, is too good for the rest of us. He's been flying private, it turns out, a whole bunch of times. Let's put it up there on the screen. Secretary Buttigieg has now flown almost 20 times on taxpayer-funded jets. Now, I really enjoy the way that they justify this, Crystal. They say that the government only flies private whenever it's actually cheaper to do so.

One of the flights, however, that Secretary Buttigieg took was actually from Washington to Las Vegas. Now, having taken that flight before, I actually know there is like a direct Southwest Airlines flight that you could easily take DC to Vegas, which you could take for, let's say, a couple of hundred dollars. There is no way in hell that it was somehow cheaper, even if you were to buy like 25 tickets to charter a Cessna private plane and fly from Washington to Vegas on official business. And that is just one of many of these uses by Secretary Buttigieg.

So people know, renting one of these planes charges $5,000 per hour to the taxpayer. $5,000 per hour. So impossible. And the only justification is whenever you're traveling to like a place with a very, very small airport, and I guess it would take, you know, many hours to do so. But then even there, federal rules prevent them from doing this unless they can technically justify it's cheaper. I honestly think that some of these need to be looked into because if you remember, we had Secretary Tom Price actually resign in 2017 for his private jet use. That's right. I mean, it seems to me, first of all, the tenure of Pete Buttigieg as Department of Transportation Secretary has been a historic cluster F.

I mean, in every single way, it turned out that this job, which he thought was just going to be about, like, flying around on a private jet going to ribbon cuttings, it turned out it was actually important. We had a massive supply chain crisis. Then, like, we have a massive airline issue, which we've talked about in terms of their price gouging and them canceling mass amounts of flights, huge lines at the airport. I mean, just the flight travel experience has so incredibly degraded over the past couple of years. And Pete has been asleep at the airport. I mean, just the flight travel experience has so incredibly degraded over the past couple of years. And Pete has been asleep at the switch. He hasn't done anything. We've talked to David Dayen about some of the powers that he could use and he could wield in order to bring the airlines to heel, has chosen not to do it. And so he screws up air travel. And remember when he was flying to New York? Yes. And they reported he had to drive because there were so many delays.

Like, I mean, that's what I read into this is basically like air travel is so screwed that PETA's like, ah, well, no problem for me. I can opt out and I can take my private jet. And then the cherry on top, of course, of his tenure as Department of Transportation secretary was the rail strike and, well, the averted rail strike and the fact they crammed down this bad deal, which he was involved with the negotiations to bring about. And that also sort of falls under his purview. So he's just about screwed up every part of our transportation infrastructure during his time in that position. He's been a terrible cabinet secretary. And yeah, I mean, I forgot to even mention, while the rest of us were delayed, I've personally been delayed for hours and hours, even in cross-country flights. And he's, you know, on taxpayer funded private. He doesn't have to

worry about it doesn't affect him. Yeah, it doesn't have to. He doesn't have to worry at all. You know, I've seen friends and family members who've had bags lost on pretty like honeymoon trips and others like stories about like brides breaking down in airports, you know, it must be nice. Hey there, my name is James Lee. Welcome to another segment of 5149 on Breaking Points, where we dive into different topics at the intersection of business, politics, and society. And today, I want to talk about Boeing. We've got some breaking news now concerning United Airlines and Boeing. Want to get straight over to Phil LeBeau, who's got that news. Phil, good morning. Good morning, Andrew. This is a massive order by United Airlines with Boeing. Here's how it breaks down. A minimum of 200 airplanes are being ordered, potentially up to

300 airplanes, and 100 of them will be 787 Dreamliners. 100 have been ordered with an option to order another 100 of them. They will also be ordering 56 737 Maxes and exercising the option to take delivery of another 44 Maxes. Altogether, as you take a look at shares of Boeing, these 787s are part of a massive increase in the production rate. It's currently at about one, but they're going to be bringing that up to four and then five starting early next year. Recent Boeing news, massive orders for Boeing aircraft, both the 737 MAX and the 787,

a healthy jump in stock price. Very good news for Boeing shareholders, Wall Street, and presumably good for their customers as well. The United States Federal Aviation Administration issued an airworthiness directive for all Boeing 777 airplanes. Boeing 737 MAX aircraft has experienced six mid-air emergencies and dozens of groundings in the years since it was cleared to fly again after two catastrophic crashes. Sixty other mid-air safety incidents have also been logged by flight crews in U.S. government databases.

Well, maybe not so good for passengers. That news is from this summer. Very concerning news about the safety and airworthiness of Boeing aircrafts. So is it not concerning or is it not just a little bit odd that at the same time when shareholders in Wall Street are very pleased, we're also getting news like that about aircraft safety, which is not so good for customers and passengers. And that incongruence is what we're going to explore today. To do this, we're going to need to nerd out for a second and talk about this one metric that Wall Street loves. It's called ROA, return on assets, described by industry analysts as, quote, the most effective, broadly available financial measure to assess company performance. It captures the fundamentals

of business performance in a holistic way, looking at both income statement performance and the assets required to run a business. Very effective, so they say. And the formula is quite simple. It's a company's income divided by its assets. A fancy way of saying how much money you earn by selling your goods and services divided by how much money you have to own to make what it is that you sell. It's not super complicated. I do know that Wall Street and business executives try to make business strategy seem complicated. But oftentimes, if you just sit down in meetings with some of these guys, they boil things down to maybe one, two variables max. And they go, tell me what I need to know.

I'm being measured by X. So how is this decision Y going to impact X? And in this case, a little bit of role playing, I would say something like, well, you can improve ROI by pulling a couple of levers. One, you can sell more planes, which boosts the numerator. Or two, you can try to lower your assets by outsourcing the manufacturing of the planes, which reduces the denominator. And that is what they've been doing over the past two decades at Boeing. The 787 Dreamliner, which they started working on in the early 2000s, is all about asset light design and manufacturing.

Take a look at this jigsaw that is the Dreamliner on your screen. The wingtips, for example, are outsourced to a company called KAA in Korea. The fixed trailing edge is from Kawasaki in Japan, and the horizontal stabilizer from Alenia in Italy, so on and so forth. We do not have time to go over every single part today, but the design is a doozy. And I know engineers, if any of you are watching, are probably thinking right now, complicated piece of machinery like the 787, not too uncommon to outsource components to external suppliers, which is right. But the kicker is that Boeing didn't just outsource the manufacturing of parts, it turned over the design, the engineering, the manufacturing of entire

sections of the plane to some 50 strategic partners. Boeing itself ended up building less than 40% of the plane. If you're an engineer or work in engineering, comment below, is this a good idea or not? Boeing's popular 787 Dreamliner is facing a new manufacturing defect, which might sound familiar. This is another blow for Boeing. The defect could take three weeks to address, which means airlines won't be receiving Dreamliners in time for much of the busy summer travel season. We first reported about the Dreamliner issues in September when the FAA launched a high-level review of Boeing's Dreamliner manufacturing processes. In two weeks time, we saw two cases of battery failures on the 787 and the grounding of the entire fleet by the FAA.

Unimaginable that we could be three years late, have a fleet grounding, have fires on the airplane. They're shortchanging the engineering process to meet a schedule. There's no doubt there's bad repairs going out the door on the 787. I want to travel with these planes because I see the quality of it going down around here. That is just a sampling of the news coverage over the past decade about the 787, and that is the plane that hasn't crashed. In probably the most telling quote to sum this all

up, I'll read it to you. It's from the New York Times. Quote, managers told employees to install equipment out of order to make it appear to Boeing executives in Chicago, the aircraft purchasers, and Boeing shareholders that the work is being performed on schedule, where in fact the aircraft is far behind schedule. When it comes to making planes, those would be some obtuse incentives in place. Managers at the manufacturing site being basically forced to lie to executives in Chicago, lie to their shareholders, lie to the customers. The Chicago point I'll come back to, but my point is it's kind of a house of cards. If you ever look at that seat pocket in front of you to see what kind of plane you're flying on, you might do so going forward. Like I said, we've been lucky so far that these planes haven't resulted in any fatal accidents, but we don't really know what the future brings. And it's obviously a risk corporate executives are willing

to take. An Indonesia passenger plane crashing into the sea minutes after takeoff. 189 people on board. On October 29th, 2018, a Boeing 737 MAX 8 jet crashed into the Java Sea, killing everyone on board. The origin of the MAX scandal has its roots in the rivalry between Airbus and Boeing. Ever since the 1990s, the two companies have been locked in competition.

By the 2010s, the commercial aviation market was essentially a stable duopoly, with each company controlling roughly half of the market. At the heart of this rivalry has long been each company's flagship commercial passenger plane. For Boeing, that aircraft is the 737. For Airbus, it's the A320. In 2010, Airbus shook up the market when it announced the A320

NEO, an updated version of the A320 aircraft line. NEO planes wouldn't just be updated versions of a familiar aircraft. They would also be cheaper to run. It's time to think Max. Boeing did not design a completely new plane from the ground up because it would have taken too long. they would also be cheaper to run. It's time to think max. Boeing did not design a completely new plane from the ground up because it would have taken too long. To make the max, Boeing took the existing 737 airframe and paired it with a new, more powerful engine.

But doing that changed the plane's aerodynamics. One effect was that in rare flying conditions, the aircraft's nose would pitch up. This is where the MCAS software came in. It was designed to automatically push the plane's nose down. One former Boeing engineer who didn't work on the MAX characterized the software fix as a Band-Aid. We've been learning for the last year

how the Band-Aid wasn't as strong as Boeing needed it to be. Okay, that's another risk the executives were willing to take this time to maximize the numerator of the ROA metric, their competition Airbus. They had come out with a new plane that airlines might prefer better. So they took some shortcuts, engage in arguably some fraud to build their own plane in a very short amount of time to make sure the company's revenue wasn't going to be impacted. Knowing full well the risks and consequences, in hindsight, almost too well, right? We now know that they went through a little bit of a rough patch, a couple of crashes, sales, stock, they both dropped for a brief period, but nothing they couldn't or didn't come back from because

these people, despite my critique, they understand the game better than most of us and they play the game really well. Where does Boeing stand on why those max crashes happened? Their investigations are still ongoing there, you know, but certainly what we've done is we've looked and we've said, what are the things we can do to really improve all our safety processes? And we've taken a number of actions there. Al Madar, Boeing's chief aerospace safety officer, points to this newly released safety report, which highlights the steps the company's now taking to bolster the safety culture inside the walls of Boeing and on its airplanes.

Well, the purpose is really to put a very structured process in place that's data-driven that really takes on safety in a different way. We learn from our mistakes. We're better for it. We're taking actions. We put processes in place. We're using data. Safety is our ethos, yada, yada. This is a headline back in 2000 about a Boeing strike. But to give some context, after Boeing merged with its rival, McDonnell Douglas, in 1997, whose leadership wanted to run Boeing, quote, like a business rather than a great engineering firm, the employees at Boeing, all 40,000 of them, tried to fight against this cultural change culminating in a 40-day strike

that shut down production in 2000. One union leader said, quote, we weren't fighting against Boeing, we were fighting to save Boeing. The engineers, they saw this coming over two decades ago. And that Boeing, in my opinion, was probably the last vestige of a Boeing firm that was focused solely on good engineering. Referencing this headline, the leadership basically said, screw that. And in the following year, 2001, they moved the company's headquarters from Washington, where the majority of the planes were being manufactured, to Chicago to deliberately distance the finance side of the company from the engineering side. So it's not so important to listen to what people say, but more important to observe what they do.

Corporate leadership saw engineers as a threat to the company's new culture, their new way of making money, so they isolated them. Now looking at this recent headline, the FAA does not expect to certify the Boeing 737 MAX 7 before the end of the year. The acting head of the FAA said Thursday he does not expect the agency will certify the Boeing 737 MAX 7 before a key deadline at the end of the year. Boeing is seeking a waiver from Congress of a December deadline imposing a new safety standard for modern cockpit alerts for the 737 MAX 7 and the 737 MAX 10. So today, Boeing is facing a new threat to its profitability, this time not from engineers, but from a reinvigorated FAA, rightly so. The FAA is trying to impose stricter safety regulations on Boeing, which they aren't ready for, and therefore their lack of compliance could

delay the launch of their latest jet, the 737 MAX 7 and 10, a decent chunk of their sales, which could have downstream implications on their shareholders. A lot of people are looking at the next two weeks and they're saying you've got the 737 MAX 7 and 10 certification deadline. If a waiver is not in place by then, people originally were saying, that's it, Boeing's going to throw in the towel and they're not going to build these planes. What happens if there's not a waiver in place by the end of the year? Well, first, you know, in this case, I think we have to all be careful not to put too much weight on the deadline itself.

Deadlines are not good for cert. That's the point. They're not good for the regulator to get its job done. They're not good for us in trying to certify that airplane. So we simply want that date to go away. They want that date to go away. A little bit of a gaslight, obviously, because they say deadlines are, obviously, because they

say deadlines are bad for regulators because they should have ample time to do it, which is true. But they also want their planes to fly in the meantime, prior to being certified under the more stringent new requirements. This is from literally this year. Boeing plans to move headquarters to Arlington, Virginia from Chicago. Aerospace giants move to Washington, D.C. area would bring senior executives closer to federal decision makers. That's maybe one way you can get that date to go away. Similar playbook as in the past, let's move the company's headquarters now to a stone's throw away from D.C., having the ears of the FAA or other lawmakers who are actually trying to do their jobs by

overseeing what Boeing is up to. But unfortunately, that's the business, that's the game, and that's the truth about the clashing of safety and financial considerations at Boeing. Engineers, you can sort of ignore them. Passenger safety, you can recover from that for the most part, as we can see. But shareholders and other risks that would impact the financial considerations of the company, and we're talking about maximizing financial returns. These companies are all profitable. At the very least, they're not in danger of collapse. Those considerations cannot be ignored. That is all for me this time. I hope you enjoyed today's discussion about Boeing,

about return on assets, about financialization. If you did, I would encourage you to check out my YouTube channel, 5149 with James Lee. I have tons of videos and breakdowns on many different topics like this one. The link will be in the description below. Of course, don't forget to also subscribe to Breaking Points, and thank you so much for your time today. Hey, Breaking Points, Marshall here. We are going to talk about TikTok today going into 2023. I've got an awesome guest that you guys have probably listened to if you listened to the realignment. I'm speaking with Chris Fenton. He's the author of Feeding the Dragon,

Inside the Trillion Dollar Dilemma, Facing Hollywood, the NBA, and American Business. Okay, so Chris, let's just get the intro here. What is your framing on what TikTok's legality, national security context is going to look like going into 2023? Well, look, I mean, the number one thing about TikTok is that it really has to be looked at as a national security concern. And to me, it's very obvious. I mean, I'm a soft power, I guess, specialist having come out of the Hollywood media space and seeing how things work in China. I talk about soft power influence around the world

at whether it's the National War College or at USC. This is a space I know. The technology is one thing, influences the other. And I think what we really need to do is set the debate, not just around where this big data is stored, which has been a big part of the conversation, even back when Donald Trump was talking about, we want to have that stored here, let's do it through Oracle, et cetera, et cetera. Yes, that's a big part of the issue. But the other part of the debate and a part of the debate that we have about all social media in general is how much influence TikTok has, and in particular, how much influence it has with people under 30 that are digesting it hours by hours every single day. That is something that we really need to talk about more. And I have plenty of specifics to talk about how China does that if we want to dive into it. Yeah, let me just ask the

obvious question which listeners are thinking about right now, which is, okay, young people are scrolling through Meta, Facebook, Instagram, Twitter. How do you kind of delineate the national security aspect of those three parts of those three companies? Okay, well, first of all, if you look at the influence that social media has, we're trying to tame sort of how it's biased, right? And we're talking to Facebook about how do they temper it? How do they properly sort of govern the way speech is talked about on that platform, Twitter the same way. That's been the headline quite constantly over the last month with Elon Musk's ownership. But at the very least,

these platforms are owned and operated here in the United States of America. And that's the big difference about ByteDance and its company, TikTok. TikTok is actually controlled by China. It is owned by China. And China, as you know, is run by Beijing. There's one time zone in all of China. And that's what time it is in Beijing. So even if you're a private company, you do report to the Chinese Communist Party and ultimately to the Ministry of Propaganda if you're in the space of media or social media influence or even press or even the movie business like I was a part of. So there's a lot of dictation from Beijing on what they want to see TikTok doing and the way

it's operating around the world. And there's a big reason why TikTok is not even allowed inside of China. It's that powerful. And what's the Chinese version of TikTok? I know it has a different name, but what's the difference between the American version and the Chinese version? Well, the Chinese version is programmed essentially to amplify things that are much, and it's not under the name TikTok, but it's programmed essentially to amplify things that help youth become better citizens in the eyes of the Chinese Communist Party. So there's a lot of educational videos on there.

There's a lot of things that explain how to become a better citizen and the way the hierarchy is looked at inside the communist country there. It definitely censors and it definitely tempers things that aren't perfectly on party line. And they're extremely good at it. And if you look at the way, for instance, the Twitter files have come out and the way things have been tempered here, just on that platform by a U.S. company for U.S. people to digest, you can only imagine how much China is amplifying terrible events or terrible videos or things that divide our country and how much they abate or mitigate the things that actually bring us together and make us stronger as a country. So there's a big new committee on China that's going to be chaired by Congressman Mike Gallagher of Wisconsin.

How are bipartisan leaders in Congress thinking about the threats you're describing, their general approach to governance of the question? How should we think about that going into the new year? Well, I think number one is they're talking about the big data issue, which everybody has discussed, right? And that is something that needs to be figured out quickly if we're not going to fully ban the platform. So that, let's put aside. That's a debate that's- And real quick, before we put that aside then, for listeners who are just checking into this issue, what is that big data debate issue, quote unquote, then we'll move on to the other one you're focusing on.

So we all know how Facebook or Twitter or even whatever you shop off of collects cookies or collects different parts of data and why they suggest certain things that you didn't even think you wanted to buy or things you didn't want to read. And you see it in your ticker on the side of your computer and you're like, oh, that's a great idea. Let me buy that. Oh, let me read that. You know the power of that influence, right? Well, all of that data that is harvested by American companies or Western companies is also harvested by TikTok itself and ByteDance. And all of that data is actually stored in China on servers over there. So in a lot of ways, you could say, well, why is my 15-year-old daughter watching dance videos really matter? Well, you know what? It probably doesn't. Probably 99% of the stuff they do on TikTok doesn't. But that other 1%, which is the accumulation of everybody else in this country, goes into these servers. AI technology is going to get to the level where it can really be weaponized against us.

And that's one of the issues that everybody brings up is that we want to bring these servers over here. We want to completely firewalled from being inside of China and having Beijing have access to it. But the other part of the equation is the influence side. And just to give a couple of things, because it always sounds really like you're, I don't know, tinfoil hat talking about how pernicious they can be with influence. But we know from even the Twitter files, how easy it is to adjust the scales, to rebalance the way people are digesting information, way to amplify it, way to censor it, et cetera. Well, if you go to China, it's that much more times 100, right? When I was there shooting Iron Man 3 in December of 2012, 10 years ago, the Sandy Hook massacre occurred. And you would think, wow, that's something that no one would want to see in

China and it would be censored. But the exact opposite occurred. Out of every 30-minute telecast of news, 25 minutes of it was about the Sandy Hook massacre. And why is that? Because they really wanted to showcase the United States as a very dangerous system if you're watching CNN in a hotel room, which you're allowed to have access to. Stories that are not very good about the Chinese government or about China in general are completely blank on your screen. You don't see a single thing. So that is censorship taken to the next level, where they just completely make sure you're not aware of a story they don't want you to know of. And the one last thing I'll bring up, and I was there to witness it, was during the Jasmine Revolution, some very big Tibetan protests in 2011, 2012, coming out of the great financial crisis, there was a lot of kindling, sparkling around China. And what did China do? They amplified a rally around the flag story, which was essentially taking the takeover of the Senkaku Islands by Japan and making that into essentially a defense national security issue for China. And China actually started shooting water cannons from Coast Guard boats, et cetera,

et cetera. And that story proliferated all around the country to the point where they were throwing Molotov cocktails at Japanese consulates. They were overturning Toyotas and Nissans in the streets of Shanghai. So it's just an example of censorship, amplifying propaganda, and amplifying explosive rally around the flag propaganda. And that is the same stuff they can do here inside of our own borders at the United States of America. So two last big questions. So number one, what do you think should be done then? Like, what's your personal recommendation for how we should think about this going into the new year?

Well, as an American, I just flat out think we should not allow something that is this powerful and influence on people under 30 allowed in this country. And in fact, we have Silicon Valley, we have masterminds at this type of creation. In fact, you could argue maybe Facebook's Instagram is a great replacement for it. But we should follow India's lead and flat out just ban the app. And I don't care about the whole, oh, that's government overreach and free markets and capitalism and all that kind of stuff. It's not. National security issues should always come ahead of capitalism, always come ahead of free markets, and quite frankly, always come ahead of any sort of political side that you're on. We are all one nation,

and we need to actually address the things that make us stronger as a nation. And I can tell you emphatically that China will find any story that divides us, red, blue, purple, you name it, and they will amplify it all over anything that they control. You know, this is interesting because I really can't recommend your book, Feeding the Dragon, enough in terms of the memoir aspect, right? Talking about how you really saw intercultural exchange as a way to tamp down tension and have a more peaceful relationship. Could you talk to the

contradiction then almost? How in 2012, 2013, you're thinking about Iron Man 3, how this is a real harmonious combination of two different cultures and industries. But today we're talking about bands. What's your recommendation for how policymakers could think about the cultural soft power side of this that could amp down tensions maybe? Well, we need to figure out how to coexist with the other superpower across the Pacific. Coexistence is the key. I mean, we do not want war. We don't want cold war. And I know there's debates about whether we're in cold war. But one way to do that is obviously trade and commerce. And I believe there is a very strong rebalancing of the capitalistic endeavors between the two countries that can be done where national security interests are protected and the values and the principles that we hold dearly are protected. navigate this. And we're seeing the SEC essentially approach Chinese listed companies and saying, you have to apply the same accounting practices to your companies as we do with ours if you want

access to our capital markets. There's various ways we can work with the WTO to re-designate China as a developed nation, not a developing nation. And there's various other very macro moves that we can do that will reset it immediately. We just need to put patriotism before capitalism and realize that the art of war is a long game that Beijing plays. And they're very subtle when it comes to influence. And that influence can create little sparks of division between all of us. And they know that. And it's a lot of stuff that we can't even really see in real time. But if you look at it over the course of, say, my tenure with China and going back to 2012 to today, a lot of it starts to make sense. And you're going, hey, this is not some sort of conspiracy

theory. It's actually the way they compete and see actually the way they're looking to win. So we just need to play the game as smart as them and figure out how to rebalance this and make it more of a 50-50 divide. And last but not least, do you have a prediction for whether 2023 will mark a turning point for the TikTok ban conversation? Because we've been having this same conversation since basically 2019 across two different administrations, what do you think could change the kind of loop we seem to be stuck in? I think it's the same thing that I've seen on a very micro scale with me. When I started talking a little hawkish about China, it was really only the right side of the aisle that wanted me on platforms talking about it, but now it's very even. It's even distribution between left and the right. And if you expand that in a macro point of

view, China's probably the one issue that both sides of the aisle are agreeing upon when it comes to Washington, D.C. So where I see the 2023 version of this TikTok discussion that, like you said, has been going on for, say, five years, I think it's going to move forward to some sort of constructive resolution, mainly because both sides of the aisle are now on it, talking about it, and want to solve the issue. Good show. Chris, thank you so much for joining us on Breaking Points.

Can you just shout your book out for any listeners who want to go a little deeper? Yeah, my pleasure. Follow me at TheDragonFeeder on TikTok. No, on Twitter. And Feeding the Dragon Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, and American Business is the name of the book. Thanks so much for having me on and keep doing what you're doing. You guys are fantastic.

Thanks, Chris. We could edit that out, but that was a fun little Freudian slip for listeners. See you next time. Hey, breaking points. Marshall Kozloff here. We've got another one of our recurring segments with Jules Terpak. Jules does really great work on pretty much every single social media platform. She has a great Washington Post column, all that great stuff.

Since we're at the end of the year, I wanted to do a kind of year in review about how we are feeling around social media without being too precise because, you know, this is coming out a little after we recorded it. So I'm not sure Twitter files part 15-2 is going to be up for grabs. So Jules, let's just start really basically, how are you feeling about the social media space, Twitter, Meta, Instagram, as we're going into 2023? I mean, this year has been crazy. I feel like every sentiment I've had towards platforms have kind of 180 by the end of the year. For example, TikTok has been pretty consistent in the way that we just saw what a

bipartisan bill come about requesting to ban TikTok in the US. It's already happened on government officials' phones, but now, yes, they're trying to push an entire ban across the country. And so that's always been lingering since the beginning of the year. It's been lingering for two years now. And that's kind of a toxic position for creators because you need to diversify yourself across platforms for your longevity and, you know, livelihoods. So that's still in the background, but despite that TikTok is still growing like crazy. And it's still the platform that most young people are spending the vast majority of their time on. Instagram, we've seen a lot of ups and downs. There was a negative sentiment basically all throughout the year.

And at this tail end of the year, though, you're kind of seeing a more positive sentiment shift towards Instagram and the way that they've been out of a lot of drama in the past year. A lot of the dialogue around them was kind of just like users talking about all this different stuff. But now everything we're seeing within Twitter, we're like, wow, like maybe Zuckerberg is kind of like has a great approach and being more private with his moves with Meta. And then with Twitter, obviously everything's been super public. For me, it was like back in, what was it? Virtually March, April, or May when Elon first introduced the idea of buying Twitter,

I was actually very excited because there were all these articles coming out of like interest in Twitter and working at Twitter was going up 250%. I was like, wow, you know, a lot of, there's going to be a lot of great engineers, great product people who want to work at Twitter. And I've always seen so much great potential in the platform because it is very different, differentiated and unique. But in this past month, past 45 days, we've seen obviously a pretty 180 sentiment towards Elon. For a lot of people, there was basically nothing that Elon could do to make them have a negative sentiment towards him. But now even some of his stands and like his biggest fans are realizing, you know, it's not good to idolize people. And we're realizing just like how shaky these platforms can be just because of the top management and how complex these platforms are to run as well.

So it's been a good learning for everyone, but definitely a lot of ups and downs with social media this year. You know, I didn't want to get too specific on decisions Elon has made, but your comment about creators needing to diversify, I think does bring up the decision to ban linking out to your Instagram, to your link tree. Could you explain why, as a creator yourself, why this caused the biggest uproar out of any one of his decisions? So to your point about how a bunch of his stans are no longer defending him, this seemed to have been the decision that apolitically, across the aisle, everyone was like, whoa, too far. Explain like what happened and why you think that resonated so much. Yeah, this week was a huge shift in towards towards the sentiment of Elon, because first of all, the whole situation of banning journalists who maybe had uplifted the Elon jet account in some shape or form. And he put out that poll of like, oh, should I unban them now or in seven days? Everyone was voting now.

That's what won. And that kind of showed, oh, wow, this is a shift in sentiment towards Elon because every poll before was kind of going his way. So that was a little inkling there. And then yesterday, and it was, they ended up retracting, Twitter ended up retracting the statement within like 12 hours was yes, they were banning the links to any other competitor platforms. They left out platforms like TikTok and YouTube though. It was like Instagram, Facebook, Mastodon, and like, I think maybe Parler or maybe Parler wasn't in it. It was other platforms of the realm. And then also, yes, link aggregators, like link in bios, like you said, link tree, beacons, et cetera. What'd you say?

What are the link in bio apps if someone hasn't used them before? Yep, so every creator uses these because it's just one link and you can show all your different social media platforms. For example, I also have my Discord in there and questions for the Washington Post. I'm like, okay, if you want to ask me questions, blah, blah, blah. It's basically like the new personal website

and it's a little more clean and efficient for people. Yeah, every creator uses them and it's kind of your gateway to your digital identity and across platforms. Because obviously we're all compartmentalized across different platforms and that's so important because like TikTok could get banned tomorrow. Of course, it's important to move your audience as much as possible to other platforms so that you can still thrive in those spaces.

So this was just an obvious, terrible decision because Elon wants to attract more creators. And obviously that is suppressing competition. And it's just terrible for creators and their livelihoods. And on the other end, like Elon's always talking about how he wants Twitter to be the best for journalism, specifically citizen journalism. When it comes to talking about things that are happening on different platforms, I do this all the time. I'm constantly talking about what's happening on TikTok and what's happening on Instagram. And I always link out to the original source. So when it comes to journalism, whether it's legacy or citizen journalism, links, clickable

links to other platforms are so important in making that information useful. So just all around this decision was awful. And I think if he asked like any average person, they would say so. So it really feels like there's kind of like an authoritarian situation here of like, he's just calling all the shots regardless of what anyone under him is saying, which is definitely not a good thing. You know, it's interesting too, because to your point around which platforms were banned and which platforms you could link out to, you could link out to YouTube, which is what we do with Breaking Points. But Elon had also spoken about how he wanted to bring long form video to Twitter. So how as a creator, could you trust that eventually there just wouldn't be a

ban on YouTube linking out as well? So I think that the big question that I'd ask for you here then is, as a creator, how do you think about these closed versus open systems? There's been this big debate. This has always been a debate around the internet, like which people want to live in? Do they want to live in something that's like tightly controlled, that's very top down, but organized versus something that's very open and kind of crazy. How do you think about that debate? Like now, especially? I mean, I think it's really important for them to stay open in terms of ease. I mean, as a creator, of course, I would love to just utilize one platform and my livelihood feel completely safe on one platform. That would be so much easier and like to consolidate your digital

experience and just focus on one platform. Yes, that would be so much easier, but that's just not the case. We've seen over the years, so many platforms come and go. So many people who grew on Vine had to completely upend once that platform died and grow elsewhere on like YouTube or Instagram, whatever it is. And that's so important because yeah, at the end of the day, these things are businesses, even though they feel so intimate and like they almost should be public goods. That's just not the case right now. So being able to diversify is just essential for creators. And I think like it also made Elon seem almost like insecure in Twitter's positioning. Like why do you have to ban all these platforms that are possible competitors? It just makes it seem like, oh, like our time here is maybe we should be thinking like, oh, are these platforms so much better that you don't want us to go to them? I think it just like kind of showed insecurity in the platform's positioning right now as well. So the last big topic I want to talk about here is you had an interesting tweet we were

talking about. You were pointing out that if you're actually looking at these big social platforms that really owned the past decade, Snapchat, Twitter, Facebook, pre-acquisition, Instagram, all these different apps, they're actually founded by young people. So, you know, we're not trying to be like ageist here and saying that like, oh, Elon isn't succeeding because he's Gen X. But what were you kind of getting at with that tweet? And what do you think we could take away going to next year from that? Yeah, for everyone, some examples, Mark Zuckerberg was 19. When he founded Facebook, Kevin Systrom, who founded Instagram was 27. Jack Dorsey was 29.

Obviously, for Twitter, Evan Spiegel was 21 for Snapchat. What this shows is that these social media platforms have a vast amount of cultural nuances. And for example, today's biggest platform being TikTok. TikTok is obviously very associated with the younger generation. That's who understands this platform best. And so when we think about the next decade of social media, and we're kind of in this weird where everything feels very wishy-washy on social media. All these platforms are copying each other. We're not really sure where they're going next

in terms of innovation. The people who are going to come in and probably make the most change that is compelling to the average user is probably going to be young people who, again, understand these platforms best and have been integrated and really immersed in them since a super young age

and have a different point of view on social media platforms than the older generations. So yeah, Elon came in. Again, we're not trying to be ages, I'm just like pointing out the ages of what he's like 52, 54. And a lot of the men around him who were helping him was like around the same age, you know, David Sachs, Jason Calacanis. I don't know if I said his name right. Calacanis. Calacanis, sorry. But yeah, all of them are around that same age. And I think in any other realm of tech, that could be okay.

But something about social media, and again, those cultural nuances, make that seem like a huge negative. And I think some younger people who are deeply invested in digital culture and social media can come in and support making really great change in features for the next decade of these platforms. That's such a good point to make there when it comes to the tech books. I want to just close on this point, which is that if this were purely an engineering challenge, so if the issue of Twitter was that the app didn't load fast enough or it couldn't handle everyone tweeting at the same time during the world cup final that's a case where just age wouldn't matter because actually all that really matters is like your technical programming ability but to your point about the cultural tenants mattering in this category of technology i clearly don't think there were 20 something creators or just any creator in general who was in the room during the decision on the linking out bit

um it's kind of funny like someone even someone even tweeted to elon like wait a second you're banning link tree link tree is how i actually do this this this this and that um because your link tree could maybe even include services that they didn't ban so your link tree could be only fans it could be your sub stack it could be a bunch of things that are okay but elon then replied okay that's a fair point it's like dude someone should have told you that before you guys sent the memo out well what's really frustrating to me about all these elon moves and again i was super excited for him to come in because the his like hit the energy he cultivated on his twitter account in like 2020, 2021 was always super motivating, inspiring, and focused kind of on humanity conversations. Obviously this past

45 days, we've seen a bit of a culture war situation. Anyway, what has really frustrated me about his moves is that they completely dismiss any institutional knowledge that has been learned from the past decade of social media. Like, like what you're saying, if he had asked anyone, if he had considered again, the past decade of social media. Like what you're saying, if he had asked anyone, if he had considered again, the past decade of social media at all and all the nuances, and that just seems like such basic principles that he is completely defying.

And I'm all for trial and error when it comes to like obviously building a platform, but when it seems like a waste of time and things that have already gone through trial and error and anyone who deeply understands social media clearly knows about that's when I get annoyed because you're putting like users through hell and back. And you're also making users relearn all of these different things. Like you're not doing beta testing, you're pushing this out to millions of users. And it's just, it's very exhausting and reckless to me.

That's a great way to put it. You shouldn't do trial and error with issues relating to trust. Because trust is like, trust is something you can't just easily rebuild. And that'd be a very key lesson from the past 10 to 15 years of social media. Jules, this has been really great. Where can folks go to get your link in bio and other work they are up to?

I'm just at Jules Terpak across platforms. And just one more point about the link in bio. I thought that was funny. I saw some information this morning that Linktree actually moves way more traffic to Twitter than Twitter ever moves to Linktree because like a lot of people come from, like my TikTok, for example,

so many people use my Linktree to go over to my Twitter. So that was also an interesting statistic that was not taken into account when Twitter made this decision yesterday. Very, very helpful. Jules, thank you for joining us towards the end of the year on Breaking Points. Thank you so much, Marshall. Radio Music Festival, presented by Capital One, is coming back to Las Vegas. Vegas! September 19th and 20th. On your feet! Streaming live only on Hulu.

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