Breaking Points with Krystal and Saagar - 3/28/23: Trans Suspect Behind Christian Mass Shooting, Netanyahu Caves to Protests, Peter Beinart on Israeli Hypocrisy, Top SVB Accounts 13 Billion, American Patriotism Plummets, IRS Targets Matt Taibbi, US Military Shortages, Binance Sued

Episode Date: March 28, 2023

Krystal and Saagar discuss a Trans suspect behind the Christian Mass School Shooting, Netanyahu caves after Israeli protests erupt, Peter Beinart joins the show to discuss Palestinians seeing hypocrisy behind Israeli protests, the top SVB accounts had 13 Billion in cash, Trump trashes SVB Bank bailout, American patriotism plummets, IRS targets Matt Taibbi on the day of his testimony, Elon fully Paywalls New Twitter, Saagar looks into the massive US military shortages after Ukraine Aide, and Krystal looks into Binance crypto being sued.To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/To 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.

This is an iHeart Podcast. Hey, guys. Ready or not, 2024 is here, and we here at Breaking Points are already thinking of ways we can up our game for this critical election. We rely on our premium subs to expand coverage, upgrade the studio, add staff, give you guys the best independent coverage that is possible.

If you like what we're all about, it just means the absolute world to have your support. But enough with that. Let's get to the show. Good morning, everybody. Happy Tuesday. We have an amazing show for everybody today. What do we have, Crystal? Indeed, we do. A lot of big stories breaking this morning. Horrific mass shooting at a Christian school outside of Nashville. We'll bring you all the details, at least as much of it as we know at this point.

Chaos continuing in the state of Israel. Benjamin Netanyahu pausing the judicial reforms that sparked those protests. A lot breaking on that as well. We've also got new hearings into what exactly the hell happened with SVB. This as former President Trump weighs in with his own hot take on both the Federal Reserve and the SVB bailout. Really troubling story about a friend of the show, Matt Taibbi, who apparently while he was testifying before Congress had an IRS agent show up at his doorstep.

We don't really know why. And Elon Musk also is basically paywalling Twitter. We'll tell you those details, too. Excited to talk as well to Peter Beinart, who is going to be part of covering that story on of Israel. He's been really pretty courageous in his views and his analysis and his journalism with regard to that nation. So a lot to get to. Before we get to Nashville, Crystal, do you want to address why you're at home today? Yes. So I've been a little bit under the weather, nothing too bad.

But there is a horrific stomach bug that is rampaging through my household. So I did not want to risk inflicting this plague upon you, Sagar, or anyone else in the studio. So out of an abundance of caution, decided to do the show remotely for today. But I'm already feeling better. I was feeling pretty rough yesterday, but I'm already feeling a lot better. I'm sure I'll be back on Thursday. Well, we thank you for saving our stomachs, and we hope that you remain better. And all the kids, of course, get better as well.

So it's sad to not have you in the studio, but hopefully everything is going to be okay Thursday. All right, let's get to it. Terrible news that happened late yesterday. A Christian school, a mass school shooting that occurred there. We had an update from Nashville police after the shooting and after the suspect was actually killed by police. Here's what the police chief had to say. Our investigations tell us that she was a former student at the school. I don't know what grade she's attended or grades, but we do firmly believe she was a

student there. She identifies as transgender. She does identify as transgender, yes. So it was five officers that immediately went in and addressed. We have video that we're gonna release, but you can see in the video, you can hear gunfire going on as they're in the school. They address the threat and take that threat down. We know there were two AR-style weapons, one a rifle, another was an AR-style pistol, and the other was a handgun. We believe two of those may have been obtained legally locally here.

Now, we have a manifesto. We have some writings that we're going over that pertain to this date, the actual incident. We have a map drawn out of how this was all going to take place. There's right now a theory that we may be able to talk about later, but it's not confirmed. And so we'll put that out as soon as we can. A couple of important things we can take away from there. Number one, police chief saying the suspect is a female to male transgender appears to have left behind a manifesto. We don't yet know what the contents of that manifesto have been.

There haven't been any leaks or any of anything that was posted. However, it appears to be motivated, at least in some way, against the school. The person was previously had attended this Christian school. We know a little bit, unfortunately, most about the victims. I'm going to put this up there on the screen. One of them, including a nine-year-old daughter of the pastor. So we have six victims of the Covenant School shooting, including the private Christian Academy headmistress, a custodian, and the young daughter of the school's pastor. And officials identified three of the slain students as Evelyn DeKaus, Hallie Scruggs, and William Kinney, all aged nine years old, in addition to three members of the faculty from both 61 and the school head, actually, Catherine Kuhn. So obviously it's just a heartbreaking case that's happening here in Nashville.

And Chris, we were talking a little bit when the outbreak of the shooting. Unfortunately, this almost seems cooked up in a lab to try and, you know, trigger a culture war here in the United States. And, you know, I just think it's very upsetting anytime, you know, children especially are killed in a school and more so, you know, almost what we saw in Uvalde and elsewhere, like the immediate kind of twisting for political purposes

that I'm watching a lot of people on the right also partake in right now is exactly what they decry whenever it happens up on the left. And, you know, clearly anybody who shoots up a school and murders innocent children is a deranged individual. That is the case regardless of whether they're transgender or not. I see a lot of these kind of people playing in the same political space as a lot of people do whenever it's, you know, let's say a right wing motivated shooting like El Paso or something like that,

which is obviously, of course, not seized upon or defended against in similar veins, saying, why are you politicizing it here most immediately? I'm curious what your takeaways were, you know, beyond just the obvious heartbreak for the parents and for the children who were killed here. Yeah, I mean, I don't know what the takeaways can be. It's horrific and it speaks to some sort of deep sickness at the core of our society because it's easy to forget that, you know, this doesn't happen regularly in other countries. And, you know, there's a couple ways in which we're outliers. One is certainly the level amount of guns that we are awash in and that culture. And the other is,

I think, a lack of access to health care and a lack of access in particular to mental health care. So I'm just at a loss at this point. Of course, there have been calls for increased gun control. Those are things that I'm open to, but I also have always been sort of realistic and pragmatic about. I don't know that just banning an AR-15s or banning particular weapons are really gonna completely solve the issue. A lot of folks are pointing to the fact

that the congressman who represents this district, let's go ahead and put this up on the screen to speak to the culture of being awash in guns. This was the Christmas card that this congressman put out last year. I believe he is a freshman member. And for those of you who are just listening, it's him with his kids and his wife all holding some sort of weapon here. So obviously, this is someone who has been very much in favor of widespread availability and access of firearms. But, you know, it's just a disgusting occurrence that, again, I think just speaks to some sort of deep sickness at the core of our society. Yeah, I mean, I just, you know, I really just wish that it wasn't a grab bag of everything.

So, you know, from what I look at, you know, on my Twitter, in terms of the reaction, right-wing lawmakers elsewhere, everything is about the discussion of the trans identity here of the shooter. And listen, I mean, if there were hormones involved or lack of mental health resources, or that was something that was referenced, look, I mean, we can't surmise the actual motive, but it doesn't take a genius to figure out that they may have had some resentment at the school that they had attended as opposed to their current identity. I think that's absolutely worth a discussion as well. However, you know, also there's just, as you said, you know, almost immediately that tweet that you showed, you know, went immediately viral talking about gun access.

We've had gun access in this country for a long time. Like you've had AR style weapons. You know, it used to actually not be all that uncommon, especially where I'm from in Texas, for for kids to have literal guns in their trucks like in the 1980s. But there were no school shootings. It's something that just like Columbine and afterwards just ignited something. I'm not exactly sure what it was. On top of that, we, of course, are having a discussion here about mental health resources. It was actually a major takeaway from Uvalde that I think the most unfortunate part actually of the entire Uvalde discourse around the mental health resource accessibility and all that was a lot of the hypocrisy that I saw in particular that really frustrates me. So, for example, like Texas Governor Greg Abbott talking about the need for mental health resources when he literally denied funding for mental health – Medicare and federal funds that would have funded such

facilities. At the same time, look, taking away guns is not going to solve. First of all, it's not going to happen. It's just not. I'm already on the record literally against gun control specifically for this reason, because I don't think it would actually solve anything. But beyond that, on a non-practical level, it's not just guns, as I just laid out. It's multifaceted. I think at our show, our best, you know, difficult moment like this, we just try to show people, like, there's no one-size-fits-all solution. We can be open to it. We should just approach each other with compassion. I don't think there's any other way to do it, especially in a horrific time.

Like, I actually know somebody who knew some of the people who were killed in the shooting. We're close family friends with them. And those people are really hurting right now. Yeah, I mean, that is certainly the case. I think it's also just worth saying there's a lot we don't know. You know, one of the things that I will definitely be looking for is, you know, how are the firearms acquired? Was this person on the radar of law enforcement previously in that press conference that we played a bit of. They said that she didn't have any prior record or convictions. It doesn't necessarily mean that there were no previous interactions with law enforcement, though, as we know. So those will be some of the questions that we have, and not to mention whatever is in this manifesto that this

killer penned. I'm glad that you brought that up because that's also my number one. You know, everyone also else, everyone immediately reaches for the guns or the trans thing. I'm like, Hey, you know, Parkland, uh, Uvalde, we can go on forever. Uh, Charleston, all this, every single case known to law enforcement, no mass murderer just wakes up one day and commits and act like this from a terrorist to a school shooter. there are breadcrumbs that are everywhere. There are always, it's a drop bag. And as you said, looking and going to be paying very close attention to, was the 911 call ever made? You know, why exactly?

Even in the motivation, what about social media postings? Did somebody ever report what was going on here? So let's also not take our eye off the ball of this could be a law enforcement failure that we don't yet know some of the details of and that we're going to be hoping that some local media and maybe even mainstream media will dig into. So look, guys, you know, that's basically everything that we have here. As Crystal talked about the spark for gun control, President Biden in his first initial comments seized upon the shooting to talk about this. Here's what he had to say.

We're monitoring the situation really closely, Ben, as you know. And we have to do more to stop gun violence. It's ripping our communities apart, ripping the soul of this nation, ripping the very soul of the nation. And we have to do more to protect our schools so they aren't turned into prisons. You know, a shooter in this situation reportedly had two assault weapons and a pistol, two AK-47s. So I call on Congress again to pass my assault weapons ban. So we had the call for the assault weapons ban here. However, you know, the police chief said that they were legally acquired. We still do know

need to know some of the details, at least two of the firearms. I know that three, I believe, were involved in this case. So it's not also uncommon for many of these guns to be illegally purchased, even in the event of increased background check, et cetera. So we'll see if there's any red flags from psychiatrists, from medical system, from the police chief, law enforcement, the details on all that. And we'll continue to stick on the story. I know the counterpoints also will bring you guys an update if needed tomorrow, as well as on our show on Thursday. However, let's get to Israel, which is what we're going to start our show with in the

first place before this tragedy occurred. There have been really wild and widespread protests in Israel among Israeli Jews over proposed plans by Benjamin Netanyahu to quote-unquote reform the judiciary. It's basically a major power grab as he himself faces corruption charges and would lead to undermining the independent judiciary. So there's been a huge response to this and this really came to a peak over the weekend and into Monday morning. Let's go ahead and put this up on the screen so we can see a little bit of what this looked like. These protests, which were truly nationwide, followed Netanyahu's decision to sack his defense minister.

His defense minister had actually called for a pause on these judicial reforms. Netanyahu fired him. And then there was a massive uptick in the protests nationwide, including their largest trade union, which I think had some like 700,000 members and Israeli embassies being shut down. So this was a massive escalation in the level of protests. And we do now have a reaction from Netanyahu. Let's go ahead and put this up on the screen. Because of the pushback, he announced a delay in that judicial overhaul plan. He's deferring the controversial proposals to next parliamentary session after mass protests. So he's not saying we're not doing it, but he is saying we're going to press pause. He said he would delay those

changes because he wants to give time to seek a compromise over the contentious package. Speaking in a televised address on Monday evening, 10 hours after he was originally scheduled to give a statement, Netanyahu, they say, looking tired and striking and unusually flat tone, said he was not willing to tear the nation in half. And there's a possibility of avoiding fraternal war through dialogue. I, as prime minister, will take a time out for that dialogue. There's another piece of this too, Sagar, which is as part of this deal to pause the judicial reform, because remember Netanyahu is part of a coalition government with some really hard right figures who wanted to press forward with this

regardless of the public reaction. So in order to secure this delay as part of the deal, he announced that they would form a civil national guard, which would be led by this minister of national security, Itamar Ben-Gavir, who is effectively an out and out fascist, is basically called for Palestinians to be wiped out, and a member of the far-right Jewish Power Party. So this is coming not without a cost. And again, it's not like the reforms are being completely quashed. They're just being pushed off to the next the next parliamentary session. Yeah, this is a really interesting episode. And

we'll talk about it more with our guest, Peter Beinar. But it really is a revenge or I guess a revolt of the secular Jewish elite inside of Israel who have been much more kind of wedded to Western democratic ideals and are very upset at the both religious component of the government, the most religious government I think in modern Israeli history. And on top of that, the judicial reform of which has never been popular amongst them is one which a lot of like mass cultural Israeli society was revolting against. This is one of those where kind of the secular Jewish elite inside of Israel, the business elite, the tech elite, so to speak, in conjunction

with a lot of the younger people who would agree with them, who are also raised secular, were the ones who took to the streets. We should, you though, there was also a protest to support the judicial reform. And it's one of those which just underscores that, look, Netanyahu and the religious government, they do also maintain some support inside of Israel, especially amongst kind of the orthodox, the ultra-orthodox Jews who maintain a significant portion of Israeli population and society. That's one of the major cleavages that exists in Israel is fights over welfare, military service, you know, what exactly qualifies as what the level of support that they would receive from the Israeli state. And it's caused quite a bit of tension in their society, which is kind of erupting all over this judicial reform.

But it's much, much deeper than that. It's really just not about the court. It's both singularly about Netanyahu himself, who is obviously facing serious legal trouble if he doesn't get any of this through. But so many different coalitions and factions have kind of hitched their wagon to him or to the opposing side that it's all kind of coming out in this major protest. Yeah, I think that's well said that this was the lightning rod, but the schism goes much, much deeper. We have one other piece we can show you here, which is just the extent of the protests among Israeli Jews. It went so far, put this up on the screen as Israeli embassies and consulates around the world closed their doors on Monday in protest over this

judicial overhaul. As I mentioned before, the largest labor union instructed all government employees to go on strike. So you truly had a general strike among Israeli Jews in the country and even at these embassies around the world. I mean, they shut down the airport, everything was shut down. And so that level of action actually forced Netanyahu's hand to have to do something and at least press pause and hope that some of the furor over this dies down. We also have some breaking news this morning, which is that President Biden has now extended an invitation in the wake of this pause to Netanyahu to come visit the White House. You know, this is notable because there had been a sort of, you know, chill, you might say, on their relationship, somewhat at least, as this was all unfolding. Now, there is no specific date

set, but it's kind of, you know, the White House extending an olive branch and saying, okay, we appreciate that you paused these judicial reforms. And to give you a little bit more specifics about what was being proposed here, effectively, the courts in Israel, it's not like they're like pro-Palestinian or anything like that. But they will occasionally side with Palestinians in land disputes. And so that's why the far right politicians, including Netanyahu and his allies, feel that the court has too much power and they want to be able to overrule the court with a majority vote in the Knesset. So that's effectively, there's some other pieces here, but that's effectively what it would do.

It would also give them more power to place judges on the court so that they would have more power that way as well. So this is both about Netanyahu trying to escape the corruption charges that he's facing, but it's also an ideological battle here too. Yep, exactly. Yeah, that's why it's so important to note. It's like he has a personal angle, but also it's one of those very convenient ones where politically he's there. The Biden administration also in a real bind because originally they had protested or at least issued a word of condemnation about judicial overhaul that frosty relations. The State Department didn't have actually any reaction to the protest movement inside of Israel, which a lot of people took certain notice of. And then also immediately inviting him to the White House

after he called it off. I will say, you know, from what I've seen this morning, the U.S. ambassador to Israel says there's no date yet been set for the visit or for the meeting. So it's not like frosty relations won't remain. We should remember, too, Biden and Obama are no heroes amongst the ultra-religious coalition inside of Israel. They don't forget the UN resolutions that the Obama administration allowed to go through in the last days of his presidency, condemning, it's been a while since I've studied it, but it's essentially, I think, around Israeli settlements. They kind of viewed that as a, quote, stab in the back. It caused a big thing.

Of course, Netanyahu is the one who came to America and spoke out against the Iran deal before Congress, against the explicit protest of President Obama. So there was a lot of bad blood there. And President Biden, as always, been a little bit more staunchly pro-Israel than President Obama was. He's always kind of called himself that and was certainly an Israeli ally within Congress. But many of the people who work for him were a part of that Obama team, inviting a lot of deep suspicion from what I understand inside the Israeli government. So there has probably never been more of a frosty relations between President Biden and Netanyahu as well within this. So we'll see whether that meeting actually does occur

anytime in the near future, because it wouldn't necessarily be politically advantaged to Netanyahu. And then certainly for Biden, it would look weak, you know, for both criticizing somebody and then inviting them over here on top of the fact that there is a significant, I know there was a poll, I think, I know you were thinking about covering it, I'm going to bring up here, which is that democratic support for Israel is at an all-time low today, that it has been in, I think, like modern American history, if you look at the way that many just rank and file Democratic voters feel about the issue. So Biden himself is in a little bit of a bind. Yeah, that's interesting that you bring that up. There was some new polling that showed positive sentiment and sort of like sympathy within the for the Palestinian cause

that skyrocketed among Democrats is now a majority held position, which is quite remarkable given that, have to always be careful about the way you phrase that, but given how much more organized and influential the Israel lobby is in Washington and in terms of the media. So this is another instance of the public is being told one thing, but they're making up their mind themselves, especially on the Democratic side. And there was a separate poll that also exposed the lie that being critical of the Israeli government is somehow anti-Semitic, because at the same time, you had a lot of sympathy for the Palestinian cause among Democratic voters. You also have very warm and

positive feelings towards Jewish people in general. So you can critique the Israeli government, obviously, without being anti-Semitic, and it's absurd to suggest otherwise. The other piece of this I want to get to, and we have a wonderful guest, Peter Beinart, to talk to us about this, is there's a hypocrisy at the core of these protests, which is you have Israeli Jews who are fighting so hard and so passionately for their own democratic rights, while you have a majority Palestinian population, which has no democracy, no democratic rights. And they're wondering, where's your concern for democracy where we are concerned? So let's go ahead and bring in Peter and we can talk about that aspect

of things as well. Really excited to be joined this morning by Peter Beinart. He is a professor of political science and journalism at the City University of New York, and he also is author of the Beinart Notebook on Substack. Recommend that you all to subscribe to that. Great to see you, Peter. Good to see you, Sarah. Nice to be with you. I want to get into some of what you've been writing about. But first off the top, we've got some breaking news this morning, which is that President

Biden has extended an invitation to Israeli Prime Minister Benjamin Netanyahu after Netanyahu decided to at least pause these judicial reforms. You know, what do you make of the invitation and the timing? You know, maybe they saw it as a payoff to Netanyahu for having delayed this judicial overall effort. It's not surprising that an American president would invite any Israeli prime minister, given how close a relationship the U.S. and Israel have. Now, whether it's morally justified, given the fact that it's an apartheid state by the world's

leading human rights organizations, and in fact Israel's leading human rights organizations, not to mention Palestinian human rights organizations, and in fact, Israel's leading human rights organizations, not to mention Palestinian human rights organizations, is a different question. But in the political reality that exists in Washington, it's not surprising that Netanyahu would get an invitation. Okay, got it. And so, Peter, if we're digging into the bigger situation here, we've got protests all over Israel.

How should we make sense of this in terms of Israeli domestic politics and then the way that the U.S. has approached the protest movement? So what you have among Jewish Israelis is a kind of a culture war that has certain analogs to what you see in the United States. First of all, you have a corrupt prime minister who's trying to bend the judicial system to make sure he doesn't get prosecuted. That might sound somewhat familiar to us. Secondly, Israeli Jewish society is deeply divided along religious versus secular lines. This is the most religious government in Israeli history. And one of the things that it wants to do is ensure that ultra-Orthodox Israeli Jews do not have

to serve in the military, which is a very, very divisive issue among Israeli Jewish society. You also have an ultra-nationalist, even fascist element in the government that wants to prevent the Supreme Court from allowing it to go even further in seizing land from Palestinians. The Supreme Court already allows the Israeli government to seize land from Palestinians fairly easily, but there are elements in this government that I think whose ultimate agenda is the expulsion of Palestinians, and they want to ensure the Supreme Court can't get in the way of that. So those are the cluster of issues that have produced this fight, which is really among Jewish Israelis with Palestinians largely as bystanders. Well, let's talk a little bit more about that because that's a piece that you've been

writing about and speaking about on your Substack. Let's go ahead and put this up on the screen from Peter. You say that in a certain kind of bizarre way, it's almost worse, more painful to see the lengths that Israeli Jews are willing to go to to fight for democracy for themselves, given that most of them and most diaspora Jews are so profoundly oblivious or dismissive or even hostile to the idea that Palestinians should also have democracies themselves. Here in this tweet, you say, if Jewish Israelis truly invited Palestinians to join their democratic struggle and made it a struggle for freedom for everyone, not just for Jews. That movement wouldn't just defeat Bibi.

It would defeat apartheid and change the world. So talk a little bit about the lens through which Palestinians must be viewing these protests. Right. So first, we have to understand the reality. About 80 percent of the Palestinians who live under Israeli control are not citizens, cannot become citizens of the state in which they live, and cannot vote for the government that controls their lives. These are the Palestinians who live under military occupation in the West Bank and East

Jerusalem, those who live under Israeli blockade in Gaza. The 20% of Palestinians are Israeli citizens, but even they are citizens of a very profoundly second-class nature. So again, to use a crude analogy, it's almost as if you were in the kind of white segregated American South, and you had this huge protest movement because you saw a white politician who seemed like they were going to erode the democratic rights of white Southerners. And then you'd have black people looking and saying, wait a second here, this is really bizarre that you're kind of launching this democracy movement as if we don't even exist

when we are denied basic democratic rights. There have been some Palestinian politicians inside Israel who have thought, well, we should support these protests because what Netanyahu is doing would allow the government to abuse us even more. But I think the dominant reaction from Palestinian intellectuals and activists on the ground and in the diaspora has been that there's something really perverse and bizarre and insulting about Israelis launching a movement to protect democracy when Palestinians who constitute more than

half of the people under Israeli control don't live in a democracy. And I think that was the point I was trying to highlight. Got it. Peter, how should people who are looking at this, one of the takeaway I've seen is that this actually might bring down the Netanyahu government, just for context, because I don't think people understand the roiling nature of Israel's like constant shuffling of government. How realistic of a possibility is that?

Does the, you know, as you said, religious kind of ultra-nationalist coalition, will it remain together? And how core is judicial overhaul actually to Netanyahu's tenuous grip on power? If I had to guess, I would guess the government will not fall because what's happened as a result of these protests is that the government has actually become pretty unpopular. And so in a parliamentary system, if you're unpopular, you don't want to bring down your government and go to elections because you're not going to do very well. So I think that for that reason, I think this coalition is likely to hang together.

There were elements in this coalition that really wanted judicial overhaul, but not everyone in this coalition wanted judicial overhaul. And my guess would be that they will now focus on pursuing other strategies of things they want to do that will not produce quite as ferocious a backlash. But I'm not sure. They're pausing it till May. And I think what will partly determine it is whether this protest movement continues or whether it peters out and they feel like they have a little bit more political of a kind of runway to go on. Got it. Part of the deal that was struck here involves creating a new civil national guard, which looks like it will be led by a far-right politician, Itamar Ben-Gavir, who's the current minister of national security, a member of the Jewish Power Party. Can you talk about that development, what it means, and how it's being received?

Yeah. I mean, again, I'm searching for analogies for America. In some ways, it's a little bit kind of like taking some very, very far right person in the Trump orbit and kind of turning the Proud Boys into some kind of National Guard. I mean, Ben Gavir is someone who's really been flirted with the edges of terrorism his entire career, was actually considered so much of a, was involved in the group of people who assassinated Yitzhak Rabin, the prime minister in the mid-1990s, even though he himself was not fingered for

that, was a longtime devotee and follower of the, of Rabbi Meir Kahane, whose entire political identity was wrapped up with the idea of expelling Palestinians, and who for many years in his home had a poster of a man named Baruch Goldstein, a terrorist who walked into the Tomb of the Patriarchs, the Ibrahimi Mosque in Pebron in 1984, and massacred, I think, 29 Palestinians while they were in prayer. So this man's basic agenda is to free the Israeli military and police from any restrictions on their ability to brutalize Palestinians, I think with the ultimate aim of trying to expel Palestinians.

So an utterly lawless human being. So to put this guy in charge of some kind of private security force, it's not clear, frankly, how many people will actually serve in this. But imagine what this means for Palestinians who don't have their own police force and army that can protect them, who are basically defenseless in the face of the Israeli military and police as it stands now. And then you're going to give this guy authority over some special unit. I mean, it's a really terrifying situation. And finally, Peter, you know, a question that I think is at the core of all of this,

as you see Israeli Jews fighting so hard for their democracy, while as you put it, you know, the Palestinian majority is completely denied any voice or any democratic say, can you have a democracy and an ethnostate? I think fundamentally no, because I think at the core of liberal democracy is the idea of equality under the law, irrespective of your race, religion, ethnicity. And there is a global struggle we see all around the world between this idea of equality under the law and the idea that countries should be the property

of one racial, religious, ethnic tribe. You see it in India, where Narendra Modi is trying to turn India into a Hindu state. You see it, of course, in the United States, where we have powerful forces that want to make this a white Christian state. In Europe as well, similar forces like that. And so the notion, we have gotten so used to talking about Israel as a Jewish and democratic state

that I think people don't think enough about the fundamental contradictions of that idea. And the problem is that Israel has actually become a model for the kind of ethnostate that people all around the world who threaten the idea of liberal democracy are trying to create, even including in our own country. So no, I think what I would hope is that one day Israel becomes a state for all its citizens, a state that treats everybody the same way legally, irrespective of what religion they are. And I think that's the fight that we need to have all across the world. Yeah. Well, we appreciate you joining us, Peter. Really appreciate your insight and your analysis

on this. I know there's a lot going on here and we're all trying to make sense of it. So thank you. Thank you. A bunch of breaking news to talk about with regard to Silicon Valley Bank. They are holding their first hearings today in Congress as to what the hell happened here. Before we get to that, though, there has been at least a partial sale of Silicon Valley Bank. Let's put this up on the screen. This was brokered by the FDIC. The headline here for The New York Times is Silicon Valley Bank sold to first citizens in government-backed deal. Banking regulators, which announced the deal late Sunday, had been looking for a buyer since seizing control of that failed bank. So this includes the purchase of about $72 billion in loans.

There was a significant discount here of $16.5 billion. They're also transferring all of the bank's deposits worth $56 billion. Roughly $90 billion in securities and other assets were not included in the sale. But the bottom line for depositors, now you are part of First Citizens Bank shares. They're the ones who hold your money and go to their branches, and they own the Silicon Valley Bank branches as well. Let's go ahead and put the FDIC announcement up on the screen just so we can get a sense of that. Their press release says, first citizens bank and trust company in Raleigh, North Carolina to assume all deposits and loans of Silicon Valley Bridge

Bank. That is the sort of like temporary holding company for the bank. And one thing that was noteworthy here is this bank, First Citizens Bank and Trust Company based out of North Carolina that's purchased it, has apparently been making a habit of purchasing distressed banks from the FDIC. Their size has grown dramatically as they purchase more than 20 different government seized lenders. Their assets have grown to more than $100 billion from about $20 billion a decade ago. So that sale has been brokered, which of course, you know, soccer is worth remembering. This didn't take that long to unfold. You know, the normal process that could have played out from the FDIC would have involved a similar sale, depositors being made, if not completely whole, close to whole.

It just would have taken somewhat more time than what they were able to guarantee. But clearly there was a buyer for this bank and the assets here. Well, there certainly was a buyer. And there's some even more of those details, which are pretty interesting, just about how much the Fed, the FDIC, and regulators screwed this before the actual crisis even began. You flag, this is going to put it up there on the screen, that in a February presentation before the Federal Reserve, they had specifically brought up before the Board of Governors, rising interest rates on banks' financial conditions and discussed the issues broadly, but highlighted SVB's interest rate and liquidity risk in particular. Staff relayed they were

actively engaged with SVB, but as it turned out, the full extent of the bank's vulnerability was not apparent until the actual bank run on March 9th. So in other words, they knew exactly what was going on. They had some time to try and pressure SVB to try and do something about it, to try and head off this crisis. They didn't do anything about it. And then the government stepped in and guaranteed all of the deposits at SVB and effectively at all large banks in the country while also screwing the smaller community banks. So unprecedented. We really can't let go of what happened. I know everybody's moved on. Oh, nobody lost any money. There was no real bank run for normal banks. So the precedent, we really can't let go of what happened. I know everybody's moved on, you know, oh, nobody lost any money. There was no real bank run for normal

people. So, okay. But I mean, this still is an extraordinary, most extraordinary financial action by the United States government since 2008. And the precedent which has set is still not yet being grappled with. And unfortunately, you know, even in the 2008 context, at least there was some anger about what happened. I'm glad that we are having some congressional hearings, but there is no serious effort yet to actually grapple with what happened here. And I don't think people should underestimate the political vulnerability that the Biden administration and really anybody who supported these actions could face. We'll talk a little bit about, you know, former President Trump definitely seizing on it

because he's not an idiot. Anybody can see this is a real political vulnerability when, you know, big bankers get bailouts even whenever they do something where they screw up and they get to literally continue to do business as usual

and keep their regular amounts of profit. It seems like a little bit of special treatment for one people and not a special treatment for everybody else. Well, and to that point, yes, nobody has any sympathy for bankers, the shareholders, etc. But I got to say, these depositors put this up on the screen. We're getting some more details about exactly who was bailed out.

Put this next piece up here. We now know, per the FDIC chair, that the 10 largest deposit accounts at SVB held $13.3 billion in the aggregate. Okay, 10 accounts had more than $13 billion combined. What is wrong with you that you're holding billions of dollars in an account that is only insured up to $250,000? And keep in mind the way this was sold to people, all the small businesses and the mom and pop food pinch, bullshit. This is the people that you bailed out. So even the depositors who were the most sympathetic group here, you know, I got some real questions about any company CEO or CFO that's holding over a billion dollars in a bank account. You are an idiot ultimately, and you do not deserve a bailout. You can wait a couple, a week or two weeks for a sale to occur to have access to all of your billions of dollars here.

Yeah, Crystal, that is an average of $1.3 billion in cash sitting in these accounts. So let's think about that. We all made fun of Roku for keeping half a bill in the bank. It turns out they were junior players and not even top 10 inside the deposits inside of this. It's also funny to me. You know, these people are supposedly the most sophisticated financial minds and tech is the future. And I had spoke to some of my friends on Wall Street. They were laughing at them and they were like, hey, you think you're the first rich person to ever exist?

All our high net worth clients have much more spread out assets, specifically in case this doesn't happen. They buy private insurance on their deposits because this type of stuff has happened before. And for somebody who has got a net worth of, you know, five, six billion, that interest payment that you'd be making on that is well worth it in the case of catastrophic risk, which is exactly what happened here. They were actually literally laughing at many of these tech billionaires and other people who might have had assets like this concentrated in their bank accounts, just saying that it was amateur hour. And so when Wall Street is laughing at you for

being irresponsible, I don't really know what to say. When even they are like, you people are a joke. You talk about how you're the future and you don't even know the very basics of what it's like to bank as a high net worth individual or as a high well-capitalized company. I think you could see that there were some serious problems, not just with the bank. And that's also why it was important in the first place. Why did all these people have so much money in the bank? Because this bank specifically catered to this one industry. They became fantastically rich over a period of time. They had exclusive lockup deals. They offered very favoring financing, very favorable terms. I saw a hilarious one from a depositor who talked about

how they had to move their deposits from Silicon Valley Bank to somewhere else. And that bank canceled their account because they asked for a physical address. And he goes, that never happened to me. And somebody at Silicon Valley Bank, and someone replied, you're like, hey, that's actually the law. You're supposed to have a physical address. So what are you talking about? He's like, oh, Silicon Valley Bank never asked me that for seven years while I was a client of them. It's like, so they were illegal, basically illegally banking for seven years while at this one bank. Why? Because they catered to the tech industry, which is high moving startup and all that. And look, risky industries are going to attract risk. That's something which everybody likes on the upside. Nobody seems to like it on the downside, except in this case, the downside, the U.S.

government is the one that steps in and says everybody's going to be okay. So I just think it's totally ridiculous. And there is, of course, still continue to be many questions about how the regulators were asleep at the switch here, which I think reflects a deep ideological failing among all of our supposed regulators who have seen their role basically post Greenspan and in the quote unquote neoliberal era as rather than actually serving as the cops on the beat to make sure that any sort of obvious risk is being mitigated and these banks are being dealt with, they've seen their role as just providing transparency to the market because the market will handle the regulation.

I mean, it really is like the most classic possible situation because not only from Michael Barr's testimony here, but there was previous reporting that the Fed did know there were issues here for not just like a month in advance, for years. They knew that there was an interest rate risk exposure. They sent their little memos to the bank of like, hey, guys, you got to do something about this. But they didn't actually take any action. And so who ends up on the hook at the end of that? Well, it's all of us. The last piece about the, that I just can't get over with the, you know, depositors with billions of dollars in the bank. We were really sold this narrative of we've got

to act and take these extraordinary actions because this particular bank is special and this is going to have huge reverberating impacts on all of these small businesses, et cetera. I think we can see now that there was perhaps no bank and group of depositors better prepared to weather a financial storm than this bank and this group of depositors. So, you know, if they had to get a bridge loan from their wealthy backers until the next week when they'd have access to their deposits, most of these people would have been fine. So again, this speaks to the core problem and the ramifications of these actions, which is

if you're going to intervene in this incredibly extraordinary system-wide way when it's Silicon Valley Bank, a mid-sized bank with a bunch of billionaire depositors, that means that you basically have every significant bank in the country. You have deemed them all too big to fail. You have put the taxpayers on the hook for all of these banks and whatever idiotic decisions they're making. And that put the taxpayers on the hook for all of these banks and whatever idiotic

decisions they're making. And that's the piece of this that we really can't lose sight of, Sagar. Yeah, that's right. And, you know, we're not the only ones who are talking about this. As I alluded to, somebody who's got pretty good political spidey senses is immediately going off. Former President Trump weighing in last night after taking a shot at Ron DeSantis, going after the Silicon Valley Bank bailout. Let's take a listen to what he said. And would you have supported the bailout of Silicon Valley Bank? Okay, ready?

Yeah. A lot of questions you're asking me. I wouldn't have supported the bailout. The bank would have to get along by itself and maybe they could have. What happened with the bank's interest rates went too high. And you know, I had my own situation with Powell and I beat the hell out of him. I was not a big fan of Powell. I was wrecked. He was recommended by some people. I didn't like him. He's too interest rate happy. What you do is you get the oil prices down. That's bigger than

interest rates. The only thing. And what happened is we took an oil and now we take an interest rates. Those banks failed because the interest rates were too high. They stupidly bought long term treasuries. Ten year treasuries. Well, they bought a long term longer than that even. And they bought a long term and those treasuries got crushed because Powell keeps raising interest rates. Shockingly good answer there from former President Trump. He is right. He always was against raising interest rates specifically for this reason. He is also correct that one of the best ways to bring down inflation costs is by the supply side, not necessarily on the demand side through the

blunt instrument of the Federal Reserve, and then criticize Silicon Valley Bank specifically for the way that they were managing their balance sheet. I have to say that is the most substantive policy response yet in the 2024 campaign. Crystal, I have not heard President Biden say a single word about this, simply that the banking system is totally safe and sound. Yeah, no, I mean, on this one, Trump gets a lot of things right. It's funny to see the horseshoe of basically him and Elizabeth Warren having this deep hatred for Jerome Powell and deep critique of him. But the thing that he gets at, you know, it's sort of like confused what he says a little bit and not like you have to like read the tea leaves or read between the lines of what he actually means here. But to the extent that he raises the issue of, hey, interest rates

are not really getting at the problem that you have here with regard to inflation, which is, of course, something we've been talking about the whole time. OK, inflation. OK, part of it might be dealt with with interest rates, which means you're dealing with inflation just by crushing labor and trying to spike unemployment. But the bulk of inflation is being caused by corporate price gouging, being caused by supply chain issues, being caused by spiking food and energy prices in part because of the war in Ukraine. Those aren't the things that the Fed can do anything about. And lo and behold, even with what has been an extraordinary period of interest rate hikes, it hasn't solved the problem.

There's a reason for that, because it's the wrong tool to use. So not only is his instinct correct, I think, with regard to the Fed, but obviously his political instinct with regard to Silicon Valley Bank, a critique which I share and which I agree with, is also spot on. It'll be interesting to see if he leans into this, though. I hadn't heard him say anything about it before, so he didn't jump right on top of it the way, for example, Vivek Ramaswamy came out right away and was opposed to it and put out a Wall Street Journal op-ed. It'll be interesting to see if he adds this to the litany of issues that he really makes

core to his campaign in the way that he has like Medicare and Social Security, the Ukraine war, and then, you know, his like election denial nonsense. So it'll be it would be quite something if he adopted this as another core piece of his, you know, pseudo populist rhetoric, at least. Right. Yeah. I'm also interested in that, whether it was a one-off or whether it's something that he'll pick up on. Most likely, if he sees a good response to it, he will continue to pick up. So we'll see. Yeah, it's a trial balloon. This one's a trial balloon. At the very least. See if he gets applause at rallies with it.

Yeah. At the very least, let's get some interest. Yeah, maybe we can get, look, maybe this qualifies, Mr. President. Please talk more about this and not cat turd polls. Although you should keep doing that because that is just objectively funny. There's just no way of getting around it. Just entertaining. Indeed.

Absolutely. All right. Let's talk about this new poll from the Wall Street Journal. basically pouring gasoline on the fire of the discourse. Absolutely fascinating. I spent a lot of time yesterday talking with Andrew Schultz from the values that once defined it. So let's go ahead and actually put D2 up there so people can see the visual. I'll read it for everybody who is just listening. Number one is patriotism. In 1998, 70% of Americans considered themselves patriotic. 61% said so in 2019.

Only 38% say so in 2023. For religion, it was 62% in 1998, 48% in 2019, 39% in 2023. For having children, it's 59% in 1998, down to 30% in 2023. Community involvement was at 47, actually spiked in 2019 to 62%, but now down to a record low of 27%. And then finally, money, and in terms of what values are, quote, very important to people, money has now gone from 31% to 43%. So my takeaway, Crystal,

was that it's easy to be patriotic in 1998. It's unipolar moment, no dot-com bubble. You could buy a house. You could basically sustain a family of four on a single income. So who cares about money? Because money isn't actually all that relevant to your life. You're actually becoming basically rich or richer by participating in general society. Wage inflation had gone down, but it wasn't necessarily even close to how bad it's gotten now. Also, my takeaway too was that I think that people are viewing this clearly through a left phenomenon. But in reality, if you look at where the major drop in patriotism comes from, a lot of it also comes from the right.

And part of the reason why I think that is, is we have dual narratives of catastrophes that are happening. So clearly, while Trump was president, we had a decline in patriotism because people said, I can't even believe that America would elect somebody like Donald Trump. But if you are a Republican, especially a MAGA-type believer, you literally believe that the election was stolen from Donald Trump.

So how can you then believe in your country? You have a dual kind of catastrophizing that is happening where you have lack of faith in the country's most basic institutions from both right and left. In a lot of ways, really the only thing that really unites us at all anymore. On top of that, religion has been going down now for decades, but I think the money piece and the increase of money is not just about the rise of individualism. It's about how much you actually do have to care about money today just to get by. Whereas in the past, it's not something that would have been very important to you

when it would have been something where it was more of a foregone conclusion where you'd be able to participate and foster all of these other things. We already know that the main hindrance to people getting married today is money. Also, it's having children. People are having less children than they want to.

And the main reason that they cite is that it's too expensive. I believe the average childbirth is some $31,000 or something here in the US on top of the $1 million or so that it costs if you want to send a child to college and I think $250,000 just for raising somebody up through 18 years old. I mean, this is not a small cost that a lot of these families are incurring here. And the reality of even trying to buy a house or any of the foundational types of things are now so out of reach

that money has to become more important. What do you think? Yeah, I mean, look, I think on a basic level, our economy is supposed to serve the people and our government is supposed to serve the people. And instead, both our economy and our government serve a handful of elites. So of course, when you feel like the societal institutions that are supposed to have

your back don't, what's that going to lead to among a certain group of people? It's going to lead to a, well, I just got to get mine mindset. And so I think that's where you see the rise in, you know, money being all important, which of course is a core sort of value of neoliberalism anyway, putting profits and cash maximization over everything else. And then also it makes sense in terms of decline of patriotism. If the government doesn't reflect you, doesn't serve you, if the institutions of the economy don't reflect you and don't serve you, which, you know, makes sense coming on the heels of the Silicon Valley bailout discussion we just had. It's quite relevant. Yeah. Why would you feel patriotic about a country that doesn't seem to be there for you? And Matt Stoller made this point

that I thought was pretty profound. Let's put his analysis up on the screen here, his tweet that he put out. Go ahead and throw this up on the screen, guys. You can see a chart. He says these two phenomenon are causal. America is in a mass die off. So Americans have become much less patriotic. When your country's systems end up killing your friends and family, you tend to lose your faith. And what he shows is, you know, the graphs we already showed you from this poll, but he also has here the decline in life expectancy that we have seen in the United States over decades and as compared to other nations. So this is a U.S. specific phenomenon. Now it was accelerated by COVID, but a lot of the underlying things we've covered at Nauseam Saga has to do with a lot of deaths of despair, the fact that you have these

mass addiction crises. But I think Derek Thompson has also talked about how it's a whole range of issues where Americans are more likely to die than their compatriots in other nations. So yeah, it doesn't surprise me to see that people don't feel too great about the country when that's the landscape. I'm reminded of a book I read a while ago, maybe in like 2015, 2016, about the American dream and how it was being interpreted, especially by white working class voters in and around Youngstown is written by a researcher named Justin Guest. It's called, I think, The New Minority. I really recommend it. And he interviewed a bunch of white working class voters about how

they felt about the American dream. And they thought it was dead. They thought this idea that you work hard and you get ahead, this is nonsense. This does not reflect my life. And these were people, many of whom, their fathers or their grandfathers had been able to get solid middle-class union jobs, been able to have the family, been able to have the house, been able to have some vacation time every year. And then they had watched the standard of living

in their area, thanks to de-industrialization, decline just over their lifetime. So they weren't able to achieve the basics of middle class stability that their father or grandfather was able to obtain. So, yeah, when I think you have that feeling of like, you know, this American dream is just a load of crock and this country doesn't have my interest at heart. Of course, you're going to see these kind of trends. Yeah. And I also think there's just a broader malaise. I mean, you know, you and I were like in the millennial generation, we really have not known in a time in our adult lives of

no war and no financial crisis. Like if you lived through like that 1998 number, if I was my age then, so it'd be 30 years old in 1998, then the Vietnam War was basically over by the time I was like eight years old. Then you had the unipolar moment. Yeah, the 70s were pretty bad, but the 80s were pretty nice. And then the 90s were so awesome in terms of mass culture, in terms of money, the economic boom. There was, yeah, I guess like the 1982 depression. But the biggest problem in the 1998 was that the president got a blow job in the Oval Office and lied about it. And it was, he still had a 62% approval rating when all of that was happening, just showing like how unserious so much of our politics were at that time. Like why wouldn't you have some high level

of patriotism? We would wish for the problems of 1998 today. We had like a budget surplus, right? It's like all these things that were happening that you can't even imagine. And so compare then to compare now, of course, same with the housing. I think housing is just so foundational to it. You and I see it so much in our audience as well. 1998, a starter home was not outside of your reach. Starter home that was built in 1970, you could buy a secondhand on the market, you could not for that much money, with a decent interest rate, with an income that you could easily pay for. I think about somebody like my parents who moved to this country in 1988, very easily moved from condo to modest house, decent neighborhood,

be able to relatively, it was safe, you get to ride the school bus, you don't have to worry about anything, you go to school and your schools are pretty good. And that's, that was a very commonality of life for a lot of people. And that's just gone. That just really doesn't exist for people who are my age or even anybody who's coming to this country now today. So it's one of those where, yeah, the American dream is alive and well for people at the upper echelons of society. They've actually gotten richer literally than ever. But for everybody, if you lost your house in 2000, my favorite stat on this, you know, for everybody who has any assets or whatever is if you did not sell your house or any of your assets in 2008 and you waited a decade, you not only made money, you know, on that trade by doing

nothing, your house dramatically appreciated in value. Like, but the people who lost that, who'd never had the ability to hang on to anything, who basically had nothing already in the system, they became dramatically poorer. So the gap between rich and poor expanded more than we can ever really imagine in that decade after 2008. That's why President Trump became president,

in my opinion, for a lot of these reasons. And that's why I think it comes to the heart of so much of our political and economic problems that we have today. It's really sad. And it causes a lot of nihilism too. So I hope that it can be reversed. But we had that discussion with Tim Urban yesterday.

I'm not so sure I think he was right. I think we are in the whirlpool. I think Trump is just the first part of our problems. It's gonna be a long way. It's hard to say. I mean, you know, things can change. Dynamics can shift. There's no doubt we're in a sort of, like, chaotic searching period.

I think that's really clear. You know, in a sense, I feel like the declining numbers in patriotism are actually kind of a sign of health in terms of the way the American people are viewing the betrayal of them by both the government and by the economic institutions. Because just having blind patriotism, I don't consider that a positive thing. I think it's good that there's a recognition that this system has failed in some really key and bedrock type of ways that can be a positive impetus for change. So in that way, I see a sort of silver lining here because you're right.

You know, we talk about inflation in the context of just the past year or two, but the reality is the basic bedrocks of a middle class life, housing, education, and healthcare have dramatically escalated in cost as to be wildly unaffordable for so many, a majority of Americans. And those are kind of the key markers of a stable, non-precarious middle-class life. So the American people have been suffering under brutal escalating costs for decades now that have, you know, put stability out of reach for so many. And that's why when you dig into these numbers about patriotism and community involvement and all these other things, the places you see the largest declines are among young people, because like you said, Zagre, they've never known another world. Basically, people my age and younger have never known a different world that wasn't, you know, Bush invading Iraq on a mountain

of lies and media betrayals and societal institutional failures and financial collapse and escalating crises. You know, that's been the world that we've existed in. So it's not a surprise that there's been a sort of radicalization. To me, it's an entirely rational response to the set of circumstances that we face. Yeah, I think that's very well said. All right, let's get to Matt Taibbi. Yeah, so this is a wild story. You all will recall that journalist Matt Taibbi, who covered a bunch of the Twitter files with regard to the Elon Musk

releases and testified in front of Congress recently as part of that weaponization of government hearings. On the day that he was testifying, put this up on the screen, this is from the Wall Street Journal, apparently an IRS agent showed up at his house on that day. Now, this is a tweet from Michael Schellenberger, who's another journalist who's been covering the Twitter files.

He says, well, Matt Taibbi and I were testifying before Congress on the weaponization of the federal government. An IRS agent showed up at his house and he says, what an amazing coincidence. You know, for the Wall Street Journal report here, and I think we have that we can put up on the screen, House Judiciary Chair Jim Jordan has now sent a letter to the IRS on Monday demanding answers about why exactly this happened. Because listen, I have been audited before. This is not the way that it works. IRS agents don't just like show up at your doorstep. You get a letter in the mail that says, hey, you need to contact us. And then you go through a process. But never have I ever had a situation where an IRS agent actually knocks on your door demanding answers. And it was an unannounced visit.

So it really is a troubling development here. Well, and some of the details relate directly to his work over at Substack. It says the taxman left a note to Mr. Taibbi to call the IRS four days later. Taibbi was told in a call with the agent. In 2018 and 2021, tax returns were rejected owing to concerns about so-called identity theft. Taibbi has provided the committee with documentation showing that his 2018 return had already been electronically accepted and says that the IRS never notified him or his accountants of a problem after he filed that 2018 return more than four and a half years ago. The IRS initially rejected his 2021 return, which he later then refiled. It was rejected again,

even though he was accountants refiled it with with an IRS-provided PIN number, notes that in neither case was the issue monetary and that the IRS actually owes him a considerable amount of money. So the bigger question is, when did the IRS start dispassing agents for surprise house calls? By the way, Crystal, you and I are currently could use a call back from the IRS, so that would be nice in terms of actually getting some service for trying to run a small business and do it legally here. You know, it's actually much harder than you might imagine. And yet, apparently, whenever you go and you testify before Congress and you call out the actions of maybe the national security state and expose some pretty troubling and some interesting things, oh, then the taxman just comes

to your house on that very same day. Look, as you said, this is unprecedented. People don't just show up at your house completely unannounced. That's crazy. We can barely get a freaking letter back from these people. So to have resources to dispatch somebody directly to your personal residence without a heads up. Also, from what we can see here, he engaged a professional accounting firm. They didn't even engage with the professional tax professionals who would have been the people to contact in this regardless. So all of this just smells so fishy. And I think this could be a real problem. I mean, to the idea that it was not political, or that it was not politically motivated, just seems incredibly hard to believe such a both

incredible coincidence, the exact nature of what's already happening here in this case. And look, I hope that they actually do get to the bottom of it, because this is exactly the type of stuff that the Nixon administration used to do and threaten specifically about the Washington Post Company and others whenever they were exposing the Pentagon Papers. You can go back and read it if you want to. They also consider doing the same thing to Daniel Ellsberg. This is literally all on tape. So it is not outside the realm of possibility for how White House or for how the executive

branch lashes out at people that they view as political enemies and specifically at journalists. Yeah, it's really just bizarre and deeply disturbing. What did you make of, I didn't really understand the piece where they said it was related to identity theft. What did you make of that? Yeah, I mean, I guess it could be one of those where somebody had stolen his identity before and he provided additional documentation. Sometimes people do that, I know, whenever they try to steal people's tax returns or whenever they try and steal people's, what are they called?

The surplus of whatever that you paid that they'll give to you. The refund. They try to steal your refund. Right, the tax refund that I know that people have tried in the past and have done that. That's part of the concern about identity theft. The crazy part, though, as he says, is that why are they contesting a 2018 return from four and a half years ago? You know, that's especially at the federal level. And again, he has professional tax counsel that he is engaged here who seemingly, you know, would have been on top of this. So anyway, I'm looking at all this. It's fishy as hell. They don't just come to your house. Especially, this is also open source. It's not just us. Small businesses are struggling dramatically in actually getting response time back from the IRS on their filings. It was one of the reasons that the Biden administration said we

needed more agents was to process that backlog. Again, you and I are literally actually stuck in some of that backlog, but he's getting people getting sent to his house. So how does that work? Uh, it's totally crazy. It's such a great, I didn't even think about it in terms of our contacts, but yeah, we've been waiting for like a response back to just the basic like structure of our business for over a year. And they've, but they've got the resources to send someone directly to Matt Taibbi's doorstep. Right. Very, very eyebrow-raising, I will just say that.

Yeah. And by the way, if anybody's watching, we would love a response back. It actually would clear up a lot of headaches. Come to our doorstep. Please come to my doorstep

and resolve problems so that we can run our business. Anyways, our own personal problems aside. So there we go. Anyway, we stand up here for Matt Taibbi. We'll put a link to his sub stack here in the description so you can make his tax problems even more complicated because he's making so much money. But look, the clear point here is that obviously this seems deeply fishy. There need to be a lot of questions

that are answered about this. And if it was politically motivated in any way, all of that needs to come out from a corruption of our tax system. And if the executive branch was resolved, because it would be a genuine scandal. 100%. We also wanted to mention Elon Musk making some news here with regard to the operations of Twitter. They launched this blue checkmark thing that you have to pay for now. The old legacy verified checkmarks like what we have, Sagar, are about to go away.

And so he tweeted out starting April 15th, only verified accounts will be eligible to be in for you recommendations. This is the only realistic way to address advanced AI bot swarms taking over. It is otherwise a hopeless losing battle. Voting in polls will require verification for the same reason. Now, I think it's important to remember in terms of his claims of like verification that the new blue checkmarks do not require a verification. It doesn't actually. Identity. verification, yeah. Right.

The original idea with checkmarks was that you go through an identity verification process. And so that way, you know, you could look at an account and know that this person is who they say they are. And I didn't realize this actually came out of a lawsuit of someone whose identity was like stolen and they were slandered and whatever. And so this was the solution to that problem. Now, I had issues with the blue checkmark, like legacy blue checkmark system as well. I actually think it should have been much more widespread so that you had much more identity verification on the platform. But the direction Elon is going in is the polar opposite. It makes it much more of a wild west where you have no idea who is saying what and whether this is real. And now

those people who are willing to do the effectively pay to play are going to get a tremendous benefit in terms of their use of this platform. For people who don't know, Twitter now has two settings. You can either look at just who you're following and what they've been tweeting out in order, like just a true sort of timeline, or they have an algorithmically generated for you that the app usually defaults to. They were supposed to change it, so it defaults to whichever one you choose, but that's been sort of like, you know, sketchy whether that's actually been happening so the four if you're not showing up in the four you algorithmically driven tweets like you basically have been disappeared on the platform effectively yeah i think it's a huge mistake i'll tell you why which is that the major reason that people

follow most people don't tweet most twitter users don't actually engage on the platform beyond like a like or scrolling past something. They follow mostly large accounts to try and figure out what's going on. So what if those people don't pay for their check marks? Are they not gonna show up in the For You page? Ergo, are you not gonna then have the most timely access to information?

And are you instead gonna get a bunch of threads from guys talking about intermittent fasting, cold plunges, and how to become a multimillionaire, which has got to be the most annoying tweets on the entire planet. It honestly reminds me of what will happen to Clubhouse. It's like you went on to Clubhouse, there's all these scams about how to make it

at whatever in venture capital, and the actual quality discussions weren't there anymore. And so this, as you said, is basically a pay-to-play system for all of these people who desire and want engagement. Now, I'm not saying that many high-follow accounts don't want that. But the reason that a lot of these accounts do fundamentally get a lot of followers is because people, again, want to hear what they have to say. So this is more of a TikTokification of Twitter. The reason why I don't think it will work is that the TikTokification, if you will, is surfacing content which they know that you will engage with in a video format. This, again, is more timely access

to information that you have curated that you know that you want to look at. If you're an NBA fan, you follow NBA accounts. If you're an NFL guy, you follow NFL accounts. My account is mostly politics because I follow curated news, people that I trust over many years that I've said, these are information that I can look at, surface, and then hopefully either try to share it with you or dig into deeper with my own reporting. That is the actual value access of Twitter and always has been for a lot of high, I guess, value, elite, perpetrator, whatever, cultural tastemakers, whatever term that you want to use here. And I think that this will really destroy it. We'll see, though.

I mean, as long as I have access to my follower page, my following page, which is not the default, but which you have to click into, I guess it's fine. But like you said, legacy accounts like yours and mine, I will say, I do think it's a problem for anybody starting out in the journalism business. You basically now have to, you basically have to buy a blue check mark. If you want to get any amplification, you and I have a combined almost a million followers. Like we don't really care, you know, take it away. Like, what are you going, what's it going to do to me? I don't care. Um, but you know, if you're starting out, I don't think it's really that fair. I think, I do think it is pay to play. I think you make an important point though, about just the usefulness of the platform,

because I frankly already find the platform less useful than I used to and find myself for, you know, we use it extensively for generating stories and deciding what we're going to cover in the news and finding elements and whatever. Twitter is really central to the way that we operate. And I already find myself using it less just because of some of the algorithmic changes that have already been made, you know, in my day-to-day usage of it, I find it less useful. So I think you're correct in identifying that, you know, the really core problem here is that it's just going to be a less useful platform for everybody. And so people are going to use it less. And, you know, I also say just as like a matter of principle, I will never pay for it.

I will never pay for the blue jet. Not happening. Now you can like I would rather just be kicked off of Twitter. Yeah. And then go through the shame of like paying for my Twitter access and get my little blue checkmark. Never going to do it. The only way that we would ever do it is if it were materially hurt the business in some way. But like, you know, it doesn't do anything.

Like, yeah, I guess it's good whenever we put out announcements about the show. But we have bigger followers here on Instagram and on YouTube, especially, or on our podcast feed, which nobody's charging me to pay. So it's like, all right, you want to take it away? I guess that's fine. Maybe other people will feel similarly. I don't know. I genuinely have no idea how this will all play out. Personally, I don't think it's going to work.

I don't think it'll work that well. Yeah, I don't think so either. So we shall see. I'm not seeing a lot of business genius here right at this moment, to be honest with you. There you go. All right, Sagar, what are you looking at? From day one of the war of Ukraine and the debate about military aid to that country, we have been assured by policymakers of one thing.

A to Ukraine is making America stronger. Ukraine is fighting our enemy for us, the anti-Russian neocons say. So the ammunition that we're sending them, it's just surplus. We barely need it. Or we have plenty of capacity to take care of Ukraine and take care of ourselves and our allies. Obviously, the sheer dollar figure size of the $100 billion has always exposed that as a farce. But they've clinged to it nonetheless. And since conflict has now been going on for more than a year, some truth has begun to actually trickle out.

Not only about the aid to Ukraine and whether it's actually even being used in the way that we want to, but whether that aid is making us less safe and less prepared for a conflict that actually might have a real impact on our lives. The very first indication of this publicly came from the U.S. Navy Secretary, who accidentally admitted two months ago, the day may come soon whether we have to choose between arming ourselves and arming Ukraine. Ironically, after he admitted the truth, the White House called him and immediately made him issue a correcting statement where he tried to shift the blame to weapons manufacturers and said, of course, actually it had nothing to do with Ukraine. But they protested just a little bit too much. Of course, this has always been obvious. The Western nations which supply Ukraine are not in a total war footing. Ukraine is blowing

through ammo so fast they could expend the entirety of USA by summer if they don't husband their resources. The only way they could really keep up with their weapons demand was if our economies went into overdrive to supply them, something not even the idiot most bloodthirsty neocons would ever advocate for because obviously it would make America's population ask a lot of questions. A new report from a series of inside whistleblowers over U.S. defense readiness shows us not only has aid to Ukraine made us far less safe in our ability to prepare for conflict, but that unsurprisingly, the money that we do spend even on ourselves is a gigantic boondoggle. Some choice examples from this new report, quote, the United States sent Ukraine so many Stinger missiles from its own stocks, it would take 13 years worth of current production

at recent capacity levels to replace them. More, America has sent so many Javelin missiles, it would take five years at last year's rates to replace them. They continue, according to our military's own internal figures, should a conflict break out with a major naval power like China, quote, within one week, the United States would run out of so-called long-range anti-ship missiles. These missiles, for reference, are what those war gamers rely on for any chance for the U.S. in any naval conflict and in a most likely hostile scenario involving Taiwan. But the point of this isn't just about the talk about Ukraine. It's to illustrate that military resources are a zero-sum game that we have to prioritize based on strategic

importance, and also that these weapons manufacturers that we rely on so heavily and who are making so much money off this, they are not even good at their jobs. As Eric Lipton points out, there are only two major rocket companies in America that supply all US missile systems. One of them had a fire at one of their suppliers. Now the entire supply chain is backed up. Should a conflict break out, it would take months to split up an alternative. By that time, thousands or even millions of people

could be dead. Throwing money at the problem cannot even fix it. It's about decades of lost industrial manufacturing capacity and technical know-how. In fact, in the so-called moment of need, when many NATO countries were increasing the amount of weapons they wanted to buy, they could not even buy them from us because our industrial capacity was so weak, we could barely keep up with the modest demand of the Ukraine war. We had to choose between supplying Ukraine and supplying actual NATO allies in the meantime. South Korea, though, of all places, stepped up. Why? Because unlike America, South Korea is not a silly country. They have been in an effective state of war since their

founding and, of course, have strict laws on the books keeping a robust internal supply chain in the event of potential conflict with North Korea. When the war in Ukraine broke out and the West was buying weapons, they were happy to oblige because they have the ability to spin up quickly. They had the technical know-how, they basically are an allied nation already, and they had the people to actually do it. More so, they don't have to choose between themselves and others because they had so much excess at their capacity and at their fingertips. The crazy part? South Korea spends only a relative $50 billion a year on defense, or 2.7% of GDP. The America, meanwhile, spends $842 billion, or 3.3% of GDP. So we spend orders of magnitude more in both absolute and percentage-based terms,

but we are weaker, less nimble, less safe. How does that work? Because of the corruption of the military-industrial complex. That's something I've always maintained here, that the size of the defense budget and the debate around it, it misses the picture. Yes, it's too big. But why? It's too big because we spend too much and spend it on the wrong stuff. U.S. weapons systems come in ridiculously over budget. They are designed to keep factories open in different congressional districts than they are to actually make functioning weapons and protect our troops. One of my favorite examples on this is during the Iraq and Afghanistan wars, while the Pentagon brass resisted spending more on mine-resistant vehicles

to stop our soldiers from getting blown up by IEDs. Why? Because doing so would pull money from next-generation fighter programs and other conceptual ideas that were costing billions of dollars. They were quite literally would rather have funded things like space lasers than actually protect the lives of American boots on the ground

who are getting killed in day-to-day combat. Even today, the overall dollar amount that we spend on naval assets is criminal. Another favorite example, the new Zumwalt-class destroyers, whose main guns fire rounds that cost a million dollars each. The rounds are so expensive that we don't buy them, meaning that we have guns with no ammunition. But I guess it's stealthy, so stealthy, it costs a few cool $400 million each. There's so many examples like this. The F-35 program, which is hundreds of billions overdue. Also, every weapon system, though, has been milked for dollars by the U.S. taxpayers with no evidence that they actually work

and are mass producible in a time of crisis and would even keep America safe. We are at a major turning point here as a country. Last times actually where things were this dire, it was 1940. We had no financialization. We had a massive untapped industrial capacity. I have no doubt that eventually we might be okay should things go south, but thousands and potentially millions should not have to die before we do so. The lessons that we have forgotten were forged in blood. And unfortunately, it looks as if we may have to spill that blood again before we ever wake up from whatever the hell is going on here. And Crystal, I found this report just absolutely stunning. I'm curious what you did as well. And if you want to hear my reaction to Sager's monologue, become a premium subscriber today at BreakingPoints.com.

Well, guys, there is some absolutely bombshell news coming out of the crypto world. Binance, which is the world's largest crypto trading platform, which dwarfs FTX even at their peak, Binance is something like 10 times the size of FTX. They have just been sued by the CFTC, that's the Commodity Futures Trading Commission. And the complaint here is quite extraordinary. What they allege is a wide-ranging scheme of illegally selling commodities to U.S. customers, something they're not supposed to be doing, of covering it up, even of coaching these U.S. customers how to cover their own tracks here. And additionally, in fairly explosive allegations, some insider trading and self-dealing that does sort of smack of some of the failures of FTX as well. Before I jump into the complaint

and some of the admittedly juicy details here, because apparently a lot of these top execs just directly messaged each other all the time about their fraudulent schemes. Before I get to that, I want to give you some of the background on Binance so you can understand what a big deal this is. A couple of months back, I did a monologue talking about this digital trading platform, how significant it was, and how many red flags there were about its operations. Let's take a listen to a little bit of that. Here's a few things you should know about Binance straight away.

Much as FTX was operated at the seemingly sole discretion of SBF with no corporate oversight and no board, Binance is seemingly run at the sole discretion of CZ. There is no traditional shareholder structure or board of directors. In fact, it's a stretch to even call Binance a company. It's not headquartered anywhere. And CZ himself hopscotches the globe in search of friendly regulators who will allow them to operate schemes which would be illegal in many countries. Here is how Bloomberg describes this state of affairs. Quote, legally speaking, a Cayman Islands firm named Binance Holdings Limited owns its trademarks. That entity's ownership has never been disclosed. Zhao, that's CZ, is the sole owner of Binance Capital Management registered in the British Virgin Islands.

Many Binance operations are also entirely owned by CZ, either directly or through an entity he controls, according to corporate filings. Most of the trades on Binance go through the flagship exchange Binance.com, which is based in who knows where and owned by God knows whom. So a whole lot of red flags there. I mean, it seemed like CZ was just running around the globe to try to escape any sort of regulatory scrutiny and avoid getting pinned down by the laws of any one country. But now let's take a look at what the CFTC is alleging was actually done here. And there are some pretty remarkable details in this complaint. Let's go ahead and put this first one up on the screen. As I said, some of the top level executives seem to have a habit of messaging each other about exactly what they were doing and the level of contempt and disdain that they allegedly had for the laws of

this country and other countries as well. So here we have an exchange with the supposed person responsible for money laundering reporting. And what she says here is that even though Binance doesn't have a board of directors, she complains about needing to write a, quote, fake annual money laundering report to Binance board of directors, WTF, to which another top executive responds, yeah, it's fine. I can get management to sign. So this was as part of an external request for documentation of how they are dealing with money laundering. Clearly, they have complete contempt for any ability to deal with potential money laundering issues. So she is complaining about having to write a fake report to a Binance board

of directors that does not even exist. Let's put the next one up on the screen here because we've got another exchange between these two executives about the ways that some of their customers use the platform. You've got chief compliance officer Samuel Lim saying, quote, like, come on, they are here for crime. Binance's money laundering officer agrees that, quote, we see the bad, but we close two eyes. So these are the people who were supposed to be enforcing compliance for Binance, and they are openly admitting that they know many of their customers are, quote, here for crime. Let's put another one up on the screen to give you a sense of the sort of flippant approach

to alleged fraud, which came directly from the top down. These are some interactions involving CZ himself. He explained that Binance needed to make sure its PR messaging was on point regarding their large U.S. customer base. He told colleagues that, quote, we need to finesse the message a little bit. And the message is never about Binance blocking U.S. users because our public stance is we never had any U.S. users. So we never targeted the U.S. We never had U.S. users.

This, of course, was directly contradicted by report CZ was regularly receiving reports that their customer base was 20 to 30% U.S. And again, just to remind you, they were not supposed to be selling commodities. They are not registered in the U.S. to sell commodities. So any exchange that they were doing with U.S. customers was illegal. So what these findings here allegedly prove is that they were aware that their customer base was 20 to 30% U.S. and they were claiming publicly that, of course, they had no U.S. users. Let's put another one up on the screen that shows some of the extent that they would go to to help their customers hide that they were, in fact, U.S. users. They apparently

actually put an instruction guide up that explained how to use VPN, which masks, allows you to mask your location that you are coming from. Here, we've got another quote from Lim. He explained to a subordinate, they can use VPN, but we are not supposed to tell them that, talking about their customers. It cannot come from us, but we can always inform our friends, third parties to post, not under the umbrella of Binance, ha, ha, ha. So basically saying like, yeah, we need to tell them to use VPN so that no one knows that they're actually U.S. people. But, you know, we can't directly say that. It's got to come from one of our allies, can't come directly from Binance, lol. So if you take all of these alleged comments together,

you see pretty clearly they knew they were in violation of U.S. law. They went to quite some lengths to cover it up, to pretend they had no U.S. users when obviously they knew 20 to 30 percent of their customer base was U.S. based. But maybe the most explosive allegations have to do with self-dealing and insider trading. So CZ himself is alleged to have controlled 300 different accounts on the platform and was using their quant desk and insider information potentially about what exactly was going on in that platform to make money for himself. I've had a report on this. Let's put this up on the screen. This is from an outlet called Blockworks. They wrote, the apparent setup reeks of a familiar funk. Control the markets, own the market makers,

then offer enough special privileges to render profiteering from users a sure thing. Now, there was no disclosure around the fact that CZ himself controlled 300 different house accounts on the platform. There was a scandal previously that I believe we touched on before where it looked like there was insider trading going on on the Binance platform with regard to potentially top executives. These 300 house accounts were exempted from new insider trading rules put in place by Binance in response to that report. And according to the complaint here, had no anti-fraud or anti-manipulation controls put on these accounts. So blatant alleged self-dealing, blatant alleged insider trading. And it just reminds me, you know, for all the like fancy new jargon and tech around crypto and the blockchain and all of these things.

A lot of what this comes down to is good old fashioned, well-worn white collar crime and with even fewer regulations and guardrails than the traditional finance system, which is really saying something. And as usual, it will be a small handful of elites who gain the benefits of the crimes they are able to commit and regular people who are left holding the bag. And Sagar, it was kind of a matter of time before this complaint dropped and before, you know- And if you want to hear my reaction to Crystal's monologue,

become a premium subscriber today at BreakingPoints.com. Thanks everybody for watching. We really appreciate it. My reaction to Crystal's monologue become a premium counterpoint show for everybody tomorrow. So make sure you go ahead and tune into that and we will see you all then. This is an iHeart Podcast.