Breaking Points with Krystal and Saagar - 4/28/22: Elon Twitter Firestorm, Student Debt, Bernie vs Biden, Wall St Fraud, Cawthorn Scandals, Economic Outlook, & More!

Episode Date: April 28, 2022

Krystal and Saagar talk about the Elon Musk Twitter firestorm happening online and in private, student debt cancellation, Bernie rallying Amazon workers, hedge fund manager's financial fraud, Madison Cawthorn scandals, media fawning over billionaires, Saagar's role in the Musk discourse, & the outlook on the economy and supply chains with David Dayen!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/David Dayen: https://prospect.org/economy/supply-chains-are-easing-or-theyre-not/  Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

This is an iHeart Podcast. mainstream by becoming a Breaking Points premium member today at BreakingPoints.com. Your hard-earned money is going to help us build for the midterms and the upcoming presidential election so we can provide unparalleled coverage of what is sure to be one of the most pivotal moments in American history. So what are you waiting for? Go to BreakingPoints.com to help us out. Good morning, everybody. Happy Thursday. We have an amazing show for everybody today. What do we have, Crystal? Indeed, we do. Many things to get to, not least of which, Mr. Enchetti over here found himself in the center.

The middle of a storm. Totally unintentionally in the middle of an Elon Musk and Washington Post storm. So we will definitely have those details for you. But in addition, the Biden administration now actually contemplating maybe canceling some significant amount of student debt. We'll take you through the arguments for and against and what they are actually thinking. We also have the details on what is a crazy story of potential financial fraud. This is insane. Yes. And some actual, maybe a little bit of Wall Street accountability here. We will see some new developments with Mr.

Cawthorn speaking of financial fraud. Allegations that Congressman Madison Cawthorn is at the center of an insider trading scheme regarding a Let's Go Brandon crypto something. We'll get into it. Yeah, it's kind of, it's like a little bit too perfect. And then we also have Bernie Sanders putting a lot of pressure on Biden to use the power of the federal government to say, listen, Amazon, if you are going to illegally union bust, you're not going to get this $10 billion cloud computing contract from the federal government. That's something we've been covering here. Biden coming in, he promised explicitly that he would do exactly that, that no federal government contracts would go to companies engaged in legal union busting. So Bernie calling him out, asking him to actually stick to his campaign promise there. We also have David Dayen on to

give us an update on where exactly we are in terms of inflation and the supply chain crisis. So lots to get to this morning, but we do want to start Saga with the very latest from the whole Elon Musk taking over Twitter saga. That's right. Okay, so we gave you guys all the details of the actual purchase. And basically, I think the story of the last 48 hours is both the freak out of the press, which we will get to, but also how Elon is approaching Twitter and he's subtweeting both the executives, but also really the product itself. So let's start with the product and let's put that up there on the screen. So Elon, in one very noticed tweet, said, Truth Social is currently beating Twitter and TikTok on the Apple App Store. Let's go ahead and put his next response up there on the screen,

going after Truth Social, specifically saying, Truth Social, terrible name, exists because Twitter censored free speech. He follows up saying it should be called Trumpet instead, which actually is a decent enough name. But the point that he's trying to make there is that this entire extended universe of so-called free speech Twitter alternatives only exists because Twitter did not abide by the principles of free speech. So he's pointing correctly to the fact that truth social exists because Trump was booted off of Twitter. The fact that Gab exists is also because of mass cancellation. The parlor, I guess, does it still exist? I'm not exactly sure.

Anyway, it existed for a period of time of which it was semi-popular. And then I think we have Getter now as well. I know that there's another blockchain one called Mines. That's the only one that actually seemed kind of interesting to me. However, the guys were on the Joe Rogan podcast and I remember listening to it being extraordinarily skeptical. And I said, oh, you know, these guys actually seem interesting because it was a blockchain thing. It's decentralized technology, and also they abide by a true First Amendment censorship-type policy. So that's obviously something that I support. However, I think what Elon is getting at is that he wants to neuter as the new head of the platform whenever this deal eventually does close the ability for the Trumps of the world and the Jason Millers of the world over at Getter and others in order to try and grift off of and take off these pieces of the audience. It's a point that we have tried to make explicitly. The benefit of Twitter is that everybody is on it. The benefit of Facebook is

that everybody is on it. The problem is that when you have the lesser network effects on these smaller platforms, they're just not as useful because that's where the true value of the product actually comes from. They're not as useful. And frankly, they're not as fun. No, they're not as fun. Because you always point out like, what fun is Twitter without being able to own the libs? Right. Owning the libs is fun. If the libs aren't there, then you don't get to see them like freak out at whatever your provocation is.

And the cons too. The cons freak out all the time. It's fun to see. Very true. Very true. So you have to have a diverse ideological array of individuals to trigger on any of these social media sites for them to really be interesting and worthwhile. You know, it's funny because especially that, you know, the tweet that he sent of like true social terrible name exists because Twitter censored free speech. It sounds like a very Trumpian tweet. Oh, yeah, that's true. Which made me realize that, I mean, Elon has really, Trump used to be the king of Twitter. Elon has really supplanted him at this point.

Oh, absolutely. And so even though in certain ways, like, obviously it's disproportionately the right end of the political spectrum that's really celebrating this and hoping they bring Trump back and all of these things, this is kind of a mixed bag for Trump himself. I completely agree. Because he has these competing interests of, number one, you know, if he's allowed back on the platform, but that will completely kneecap his financial investment here. It's a multi-million dollar SPAC. Exactly. At Truth Social. The fact that Elon has kind of one-upped him now in the sort of king of Twitter department, so he doesn't have that same hold over the platform that he once did. So I do think it's kind of a mixed bag for him personally, not to mention, as we've pointed out here many times, I don't know that it was bad for his brand

to not be on Twitter and not have his obnoxious musings in our face every single day. So we'll see how he ultimately handles this. Obviously, they all have to pretend like they like it. They have to pretend like they're happy, that they're really glad that free speech might return to Twitter. And I think there's a lot of caveats around that and a lot of questions whether that will actually happen. But they have to pretend like they like it, even though for many of these people who have been involved with some of these various alternative free speech platforms,

it's going to really financially undercut them and make their products essentially irrelevant. Yeah, you know, what's interesting to me, too, are also some of the network effects that are taking place right now. So let's put this up there on the screen. A lot of people have been taking notice, which is that conservatives questioned huge spikes in Twitter followers after the Elon Musk takeover. And there definitely does seem to be something to this, Crystal, which is that you saw large gains by majority conservative accounts. I'm talking like 10, 20,000 extra an ounce of followers relative to normal that was pointed out on Social Blade data. So here are some of the biggest swings that we saw in the last 24 hours. Marjorie Taylor Greene gained 41,000 followers. Ted Cruz gained 40,000 followers.

Laura Ingraham, 27,000. Joe Biden, 26,000. The Biden one I would put out because whenever you have millions and millions, I don't think that that really matters. Wait, so Biden jumped up? Apparently Joe Biden jumped up. Huh.

Newt Gingrich jumped up. However, I mean, it says Barack Obama lost 5,000. Again, I mean, that's just a general burn. Newt Gingrich has a great Twitter account, by the way. It's lots of pictures of him and Callista doing various things. Yeah, I enjoy5,000. Again, I mean, that's just a general burn. Newt Gingrich has a great Twitter account, by the way. It's lots of pictures of him and Callista doing various things. Yeah, I enjoy it, actually. Michelle Obama lost $20,000. Bernie Sanders also lost $19,000.

And Alexandria Ocasio-Cortez lost $12,000. So I think there is something interesting going on, but we don't actually know. So in terms of Elon's response, here's what he says. Let's put this up there, which is that every media outlet on earth wrote about me acquiring Twitter, causing a massive influx of new users. I don't know if he has any data in order to back that up. I actually have an alternative theory, and I'm curious what you think, which is that what they said is immediately after the sale, Twitter actually went ahead and locked down its core source code and its algorithm. So I'm curious whether there was some sort of daily manipulation or, okay, this sounds more nefarious. More, let's just say, daily curation that was happening by engineers that by locking it down just simply changed the way that people are gaining followers.

Now, I personally gained about 20,000 followers. I just checked in the last two days. But Elon also replied to me, which we'll get to. So I think that that's really, I don't think it has anything to do with that, but I am looking at other accounts who didn't have any of that. Yeah. I mean, I think you and even me just like being tangentially, you know, related to the Elon Musk replying to you and the whole blow up over that, like I also gained followers, but I would put our data aside because we did have a sort of unusual Twitter activity associated with our accounts. But

it is strange. I honestly have no idea what to make of it. I don't really know. I mean, you do have some percentage of liberals who are saying like, I'm done with the platform and I'm leaving. I am skeptical though, that it's in these kind of mass numbers. I agree with you. So, I mean, that would be one explanation of, like, why people on the left side of the spectrum lost followers and conservatives tend to gain followers. Because you've got now, this is one, you know, sort of organic theory is you've got all this press about what's going on with Elon and Twitter. So you've got conservatives returning to the site or signing up on the site for the first time. And so that explains those increases in followers.

And at the same time, you have liberals abandoning ship and saying, I'm taking my toys and going home. But I am just a little bit skeptical that there really is that much movement organically in terms of users coming in and users going out. But I don't really have an alternative explanation. I just don't know. It's weird. Yeah, it is certainly. And look, I think all of this should always be couched in this. Most people are not on Twitter. And I mentioned this, but I went ahead and pulled the data.

You know, you guys might have missed this. Snapchat right now is booming. It currently has 115 million more daily active users per day than Twitter. Think about it. In terms of cultural impact, nobody seems to reckon with the fact that the vast majority of people are on YouTube, Facebook, Instagram, Snapchat, and TikTok. Those, in terms of popular culture and the everyday user experience for most people are what matter. Twitter, though, is for elites. Now, again, why we spend so much time talking about it is it matters because elites run the entire country. They run every institution in American life. So what they

think, how they interact, and what they do matters a lot. That's ultimately why Elon even bought it in the first place and why we will talk about it in terms of followers and all that, because that obviously matters amongst elite cachet. And we spend time talking and thinking about the policies on that platform because that has a major downstream effect on basically everything that normal people at home are consuming, whether they know it or not. Think about the news business. Think about Hollywood and entertainment and just the most efficient way for celebrities and others in order to communicate with people. A lot of that happens on Twitter in terms of discourse, in terms of exposing to us how a lot of these elites actually think and how they talk to each other. So that is why we are spending such amount of time,

even though we know, you know, right now, the vast majority of people who are watching or listening to this, they're not consuming it on Twitter. And even if we did put it out on Twitter, I don't think it would do all that well relative to our YouTube presence, our Spotify, Apple podcasts, our Instagram channel, our TikTok channel. That's really where people are consuming a lot of this content relative to Twitter itself, even though it does have an obvious downstream impact on people. It is really interesting, too, because one thing that we've realized being in the YouTube space for a number of years at this point is that the YouTube world and the Twitter world are very, very different. And now that we're also a podcast, we've also realized that that world and what people respond to there is also very different. The great thing about the podcast world is it is much more of a neutral platform.

It is much more of an actual, like, true sort of meritocracy. Now, of course, you have a massive advantage if you come in with some sort of a name builder platform because it's hard for people to find new things. It's a little more complicated since there isn't that algorithm surfacing for you. Hey, we think you would like this to that same extent. But, you know, I think what the best hope is that there's going to be more transparency on Twitter. I'm excited about the idea of maybe the algorithm would be made transparent, even though that's not the end-all be-all. At least that provides an opportunity for reporters and experts to dig in and help inform the public about how this is actually happening,

what sort of things are being surfaced, what sort of things are being prioritized. And, you know, transparency isn't everything, but it can be a tool for helping garner public support for some sort of changes or potentially for making the platform even more neutral. So those are the sort of things I'm, you know, hopeful, like cautiously hopeful about. But to the point of the story being important, you know, just the question of what happens to Trump's Twitter account is a justifiable huge news story. Because, I mean, this is a man who continues to be the leader of the Republican party, very central to our politics, who was one of the, if not the most dominant figure on Twitter

for lots of years. So, you know, just the question of what happens to his Twitter account and how he responds to it alone is something that is worth considering in the context of, you know, how our politics move forward and what that all looks like. And, you know, I saw someone making this argument from the left.

It may have even been Glenn who was making this argument. But, you know, for people who share, you know, more of my political leanings and more left-leaning, like, you should not be comfortable with the idea that a president who, you know, polite society doesn't like can be just completely banned and vanished from the public square. Because you don't think that if a Bernie Sanders-type candidate or whoever the next sort of like left standard bearer who really is a kind of dissident and challenges some of the Democratic Party and cultural liberalism establishment, you don't think that there's

going to be a similar effort to de-platform and to marginalize and to censor that person, of course. So don't build the tools that are ultimately going to be weaponized against you. Absolutely. I mean, that's something that we can't emphasize enough. If you challenge power in any way, power will go after you with the means that it has at its disposal, which is why building in safeguards and abiding by first principles are the most important thing that we can have. Now, though, it's not like the loss of those power is not having some extraordinary effects inside of Twitter itself. And we're beginning to see that with some leaked audio that Project Veritas got its hands on from a Twitter

all-hands-on-deck meeting. Just look at the freakout happening inside of Twitter headquarters right now. Let's take a listen. Part of the reason he bought the platform was because of our moderation policies and disagreements in how we deal with health. This puts Twitter service and trust and safety, as well as anybody who cares about health on the platform, in a very difficult position. I believe Twitter grows as a service, allows for more people to use the product and have a better experience because we're able to make the conversation on Twitter be safe, because we have built tools, processes for people to be able to feel safe and control their experiences. I believe that there is a lot of work we have to do to continue making that better. Sometimes that means more thoughtful moderation. Sometimes that means making things simpler. Sometimes that means changing product incentives to be able to solve problems through products sometimes

instead of policies. So the two people that you heard speaking there are Leslie Berlin. So she is the chief, the CMO, the chief marketing officer at Twitter. And the second person is Parag Agarwal, who is the CEO of Twitter. Now, to be

fair, yeah, for now and hopefully not for long. To be fair, Leslie claims that she was reading a question to Parag Agarwal from the staff. That being said, I think that it's still an important view into the company, which is that they're like, what about health? And by that they mean COVID misinformation. Now, nobody's going to say there isn't COVID misinformation on Twitter, but we all remember the lab leak story, which was censored off Twitter in February of 2020, and hence why a lot of the content regime around all of this is completely ridiculous. They've banned an extraordinary number of accounts for going against the COVID narrative, which actually ended up being true. So that, obviously, is a big problem. But But also I think that what it shows you

is that inside of Twitter itself, and this will get to the story that we'll eventually talk about, there is a complete freak out on the side who are the most censorious. We've seen the reports of the executives crying, like I said, all about to get to that. But I think that this is fully represented. I know, I'm so sorry. Fully represented within that clip is the domineering mindset of we control the ability in order to make people feel safe. Now, look, I want people to feel safe. It's a very important thing. However, whenever you use that type of rhetoric, which is what Parag Agarwal is reiterating, it comes back to his original declaration of 2020, whenever he was asked about, should you abide by the First Amendment? And he said, our job is not to abide by the First Amendment. It's to make people feel

safe on the platform. And making people feel, quote unquote, safe on the platform is just opening the door to accusations, BS accusations of harassment, of something else. And once again, I don't think harassment is good. I think if you dock somebody and you reveal their personal information, that should be taken down. However, if you criticize somebody, that is now being painted as harassment. Yes. And that is being used as a guise in order to take down accounts. So that's a very, very good and clear view into the company itself as to how the censors and the people who really agree with that and created that

mindset are exactly those who are most upset about the Elon thing. I think the most interesting thing that Parag Agrawal, the current CEO, said there is he said, you know, sometimes the way to deal with these questions of safety is through content moderation. Sometimes it's through changing the rules, making things simpler. But the thing that I thought was most interesting that he said is he indicated sometimes it's through making changes to the product. And so oftentimes when we think about the health of our public square, kind of the easiest thing to go to is which things are being censored, which things are being taken down, how is this being applied? But actually, what really shapes our discourse, perhaps more than anything, is the design of the platforms themselves. And oftentimes, too,

you know, those surfacing algorithms that we keep talking about, which just determines, like, what's being basically buried and no one is likely to see and what is being served to people time and time and time again. So one simple example that we experience all the time here on YouTube is, you know, CNN and these other mainstream cable news platforms, they used to get no views on YouTube. Like there was no organic interest in their content. And I think that that has been very much proven out by the colossal failure of CNN Plus that there just isn't that much organic interest in, I'm going to go seek out a specific CNN video. But because YouTube, listen, we don't know what's going on in their algorithm because it's completely non-transparent. But it seems very obvious that what they've decided to do is to prop up these platforms and just serve their videos relentlessly to basically

everybody who shows up on YouTube. And so, you know, some percentage of those are going to suffer through the video that was just placed in front of them or it's on autoplay and they don't even realize it's playing. And so that ends up propping up those products. And then you don't put in front of them independent media creations because that's not maybe as safe in your perspective from an advertiser standpoint. So those sorts of things that are happening in the background, or even just the design of Twitter in terms of being able to retweet things, being able to like things, the length of the characters themselves, those decisions which are made by high-level executives at Twitter have a massive impact on the way that our discourse ultimately unfolds. That's why the culture on these different platforms,

if you guys are on a couple different social media platforms, you know the culture in each of them feels totally different. Kyle is not on Instagram, so he's been shocked by the fact that when I post things on Instagram, most of the comments are actually nice. Oh, yeah. Overwhelmingly positive. It's like earnest and sweet and kind. I mean, not 100%, but really the overwhelming bulk. And it's because of the differences between those platforms. Totally different cultures have been created. So it is a complex conversation ultimately in how you craft these platforms, but it matters a lot. And transitioning into our next segment, that's why these people are so powerful and why they not only should be held to account, but absolutely must be held to account. Because the decisions that they are making are having a profound impact on our democracy. And listen, you guys know our position here. Ultimately,

there's a lot that's said that tries to make this more complex than it ultimately is. But if you believe in free speech, we have a First Amendment right here in this country. You know, people should be able to express their opinions, even when it's messy, even when it's complicated, even when it's offensive, all of those things in the interest of having a healthy democracy. If Twitter is now a vital part of the public square, those same rules that have been part of our country for generations and which are argued over and fought over and where are the lines and the boundaries and all of that in the courts, that's what should apply there as well. So with all of that being said, let's get to Sagar's part in this whole saga.

Go ahead and throw this element up there on the screen. So as I was just saying, these executives really deserve a lot of scrutiny. And so Sagar on Twitter provided a little bit of that scrutiny, saying, Vijaya Gatti, is that how you say it? The top censorship advocate at Twitter who famously gaslit the world on Joe Rogan's podcast, True, and censored the Hunter Biden laptop story is very upset about the Elon Musk takeover, This is reporting from Politico, okay? This is like, he's just showing the world what happened here and having some commentary about it i can't stand vijayagade haven't been able to stand her uh since 2018 when she appeared on the joe rogan experience with jack dorsey spent 90 of the time gaslighting all of us and tim pool as well about the censorship policies

over there so i found it amusing and i'm going to talk about this in my monologue was it mean yeah okay i'll admit it okay but it was me i won't even defend you that put this back up on the screen this is not even that mean. Okay, I agree, but I'm just saying. By the standards of Twitter, I actually think you're being a little too hard on yourself. Put that part back up on the screen because we've got another part we've got to get here. So you say she famously gaslit the world. True.

Censored the Hunter Biden laptop story. True. Is very upset. Also true. Just completely factual, point by point, based on the reporting from Politico. So then something very unexpected happens. I did not expect this. Elon Musk himself replies and says, also in a pretty neutral tone here,

suspending the Twitter account of a major news organization for publishing a truthful story was obviously incredibly inappropriate. And I don't know who at this point really disagrees with that. Who can disagree with that? I couldn't know who at this point really disagrees with that. Who can disagree with that? I couldn't believe it. But guys, what ends up happening here is the most legitimately insane thing I have ever been a part of. So Elon replies to me and I was like, oh, that's kind of interesting. My phone literally won't stop buzzing. People wrote up his comments, all of that. in the next couple of hours, a narrative begins to develop that Elon and me are responsible for

targeted harassment against this woman, Vijaya Gade, because apparently some rando accounts said she should be fired and said some racist stuff against her. Obviously, I do not condone anything racist against Vijaya Gade. You may not have noticed, but I'm Indian. Furthermore, I did some investigation. I called my mom. Now, according to my mom, Vijayagade is not only are we both Indian, she is also a Telugu person, as in we are from the same region of India. Furthermore, I actually have a cousin with the last name who is similar to Vijayagade, so we may even be related. So maybe— You're just a self-hating Indian.

That's right. I'm a self-Indian. So not only are we both Indian, we are from the same region of India and— or our family's from the same region of India, and I might actually be related to the lady. Okay. So let's put that out of the way. Yeah. So then the news media decides this is an angle we can pursue.

Right. Because they don't necessarily love being like overtly in favor of no we want the censorship what if they have free speech oh my god because you know these places like to pretend that they're free speech outlets and in favor of such things so now they're like oh we've we've got an angle yeah they've got their angle got you know targeted harassment of a female executive brought on by these powerful figures, etc., etc. So Washington Post decides to go forward with this story. Elon Musk boosts criticism of Twitter executives prompting online attacks.

And let me read to you the framing of this, which is so incredibly dystopian and gaslighting and dishonest. So they say, Elon Musk is using his powerful Twitter account to bolster right-wing users who sharply criticized two company executives exposing them to the online masses who join in the attacks, exposing them to the online masses. Again, these are powerful,

very powerful individuals that we're talking about here. It started with a Tuesday tweet from political podcast host Sagar and Jetty. I always tried to do that. Twitter users quickly piled on to the criticism of Gadi, including calling on Musta to fire her and using racist language to describe her. Gadi was born in India and immigrated to the U.S. as a child. One user said she would, quote, go down in history as an appalling person.'" How could you say such a thing? I actually found it kind of revealing

that that was the worst response that they could find here. This is so mild. Yeah, I know. People have said horrible things about me. Guess what? I don't care, you know, whatever. That's what comes with this business. And the people who criticize me, which prompted those,

whatever, it's part of the game. I'm not gonna be like, you're a racist for coming after me. So what really pissed me off though, Crystal, was not just the framing of this, was inside of the article they wrote, and they've since updated it, they said Injeti did not immediately respond for requests to comment. And so I'm literally just spending my Wednesday morning, I came back from the gym. It's like 7.30 or whatever. I'm like scrolling. And I said, whoa, I've never been, nobody's contacted me. I checked my Instagram.

I checked my email. I checked my phone. Nothing. So then I called our producer, James. And here's what James tells me. Let's go ahead and put this up there on the screen. This Washington Post lady emails James, not even me, at 2.06 a.m. And she says here, hi there.

We are quickly writing up his tweets tonight about Vijay Agade with the peg that Musk is piling on. Some questions. Here are her questions. Listen to this. Piling on. Does he have any concern that mentioning a specific Twitter executive could result in attacks on that exec?

What are the responsibilities here? For example, one of the commenters made racist tweets about Gade and others said she should be fired. Number two, what does he hope to accomplish by calling out Gade and getting Elon involved? So there's a lot going on. Number one, everybody in this town has my phone number, including half of the people who work at her newspaper. It's not that hard to find. By the way, please don't call me randomly, but it's really not that difficult. I was a reporter. I know a lot of the people here. She could easily have gotten it, and many of her colleagues have contacted me and have spoken to me many times in the past.

Number two, emailing somebody for comment at 2.06 a.m. Eastern time is complete BS. And what time did they go live with the story? They went live with the story like 6 a.m. Eastern time. By the way, I'm awake. I was literally awake. I got up at 5 that day in order to go work out. You could have called me. I would have given you a comment.

I would have been happy to do so. I'm actually pretty accessible whenever people write about breaking points. So seven hours after Elon Musk replied to me, they contact me for the story. Now let's get to the actual questions here. Vijay Agade was paid $17 million last year. She literally appeared on the Joe Rogan podcast and is the top policy executive at Twitter. She's a public figure. I'm allowed to criticize public figures. In fact, that's literally my job. And under the guise of the First Amendment, which I've prized, and which I think is very important for me to be able to do the work that I do, that is well within the bounds

of both accepted and legal speech, but also, I would think, even within the respectability industrial complex. Yes. Going after somebody on a substantive issue is not out of bounds. Who is very powerful. Very powerful. Her title is Twitter's, it's a very dystopian title, Twitter's Legal Policy and Trust Leader.

That's what I'm saying. She's the head of the Ministry of Information. Right. So my criticism of her on a policy matter that she has publicly spoken about, how am I responsible for what some random ass Twitter account says to her? And same with Elon. He didn't say anything crazy about Vijayagada.

He replied to a tweet and criticized her on a policy matter that she was directly involved in. She's the person who censored the Elon Musk story. Now, number two, in turn is our second question. She accuses me of bringing in Elon. I've never spoken to Elon Musk in my entire life. We've had no connection. He's never tweeted at me before. I've never spoken to him. I've never corresponded with him. I've never corresponded with anyone at Tesla. I think the closest connection that we would have

is that we also know Joe Rogan. Right. Okay. So just so people are completely aware, maybe he knows who I am. Which is a large group of people, the people who know Joe Rogan. Maybe he knows who I am. I literally have no idea. So I didn't bring Elon. What was I hoping to accomplish? What does he hope to accomplish by calling out Gade and getting Elon involved? What does anyone hope to accomplish when I'm sending it?

I'm making a comment on a policy matter. But I think this is the perfect example. This is how they try to smear you. I make a substantive point. Some random people say something. Now me and Elon are racists and are responsible for the harassment that this lady is experiencing. By the way, I decry the harassment, okay? And any racist harassment against her would be equally applicable to me. So obviously, that's not a thing. So all of this, as you said at the top,

they are just covering up for the fact that they agree with censorship. And two, let me just take you a little bit behind the scenes because I found out

a little bit more since all of this happened. Vijaya Gade, I don't have a confirmation on this, but I'm just telling you, she has very, very close relationships with a lot

of these reporters. In fact, the Washington Post reporter who wrote this story was going and liking a bunch of tweets about how Vijaya Gade is like some saint, you know, come back to earth and how she, you know, she's somebody who's been really helping people out. And it has been known to me via cutouts, I'm not going to reveal my sources, that Vijaya is very, very close with the entire tech press, which is why they are going after this. So was she involved in maybe creating

this entire narrative? I'll let you take that supposition for yourself. That's the thing that is so dishonest here. I mean, first of all, I think it really reveals what dishonest, hacky actors they are, that they would email James at 2 a.m. for comment and then make it sound like, oh, you just couldn't be bothered to respond or didn't have any response. I mean, that just is a little window into how these people actually operate. And then, yeah, this isn't a straight, she wants to present this as just like a straight news report,

but clearly this is advocacy. Yeah, you're obviously friends with the lady. Very clearly is advocacy here. And listen, the same standard could be applied, you know, turn it right back around. same standard could be applied, you know, turn it right back around. How could the Washington Post, you know, call you out and target you for harassment? And Sagar, are you okay? I mean, you know, it's just, it reminds me a lot of actually what they did with Bernie Sanders and like the whole Bernie bro narrative and trying to blame Bernie for any like

bad thing that some random supporter of his ultimately said. It was equally ridiculous, and it's why I was really disappointed when he actually sort of gave into that narrative at one point. Because now you can see the way this gets weaponized all the time, and it always gets weaponized to protect really powerful people. I mean, this is someone who is so clearly a public figure, figure, not a question mark whatsoever, who is also extraordinarily wealthy and has all of the privileges and protections that comes with that expressed. I mean, yeah, it was like a little bit snarky, but it honestly was really, you know, totally within bounds of public discussion of issues that are very fraught and very important to make that into some nefarious thing. I just, it's like, you're right to be completely indignant in the way that they handled all of this. And I

think we should also say, like, they were not the only ones. No, no, no. Insider also wrote it up in a really sleazy and dishonest way. They called you a right-wing activist. Okay, I mean... Guys, ask the real right-wing activists. I can't stand them. Yeah, right, exactly. It's just the funniest thing.

It's just, but, you know, it's very clearly the language is chosen to make you sound like some nefarious actor who's trying to stir up shit, and you're in cahoots. That's the sort of insinuation here from the watch. You're in cahoots with Elon to target this harassment at this vulnerable person. Give me a break. It's ridiculous. No, it really pissed me off because, like you said, it spawned actually that Washington Post story.

Then spawned Business Insider and a bunch of other outlets referring to me either as a right-wing activist or conservative YouTuber. I'm like, guys, why do we have to apply any of these adjectives? Why can't it just be host of Breaking Points, a popular political show? I mean, what's wrong with that? It's a right-left show. We have an incredibly diverse audience. Ask people who actually know me, who actually listen to me. None of them would use that moniker whenever they're trying to describe me.

But beyond that, it's not even exactly how they refer to me. It's the tactics. And like, guys, this is what I want to show you. The inside, the 2 a.m. emails, the ridiculous questions, they rely on you not knowing how the sausage is made. And it comes back to the Taylor Lorenz point I made. Listen, lady, if you like Vajayagade, write an op-ed about it. Be like, Sagar and Jenny is a dishonest hack. I honestly wouldn't care. I'd be like, okay, fine, whatever. I disagree with you.

I would probably do something here about it. But to do this all within a news story is just so incredibly dishonest. It just shows you why we're trying to do the work that we are here. Both in order to expose this, but to try and build something so apart from this. And it does really relate to Taylor Lawrence, because this is the tactic that she uses all the time to shield herself from criticism. And the weaponizing of identity, too, to, again, shield powerful actors from scrutiny. I mean, Taylor, the thing that makes it so ridiculous with her is everyone wants to sort of like infantilize her.

It's like, how could you do this to this young woman? First of all, we don't know exactly how old she is. Yeah, she's lied about her age multiple times. But she's not that young at this point. She's like nearly 40. And second of all, this is a well-paid, prominent journalist at one of the top outlets in the entire country in a tremendous position of power. And I don't doubt that there has been ugliness directed her way, and I do not want that for her or anyone else whatsoever. But to make yourself this, like, you're the victim

in this country. Like, do you know anyone who has suffered anything real in your life? Look around at this nation and think about all of the pain and suffering that is going on, and you're going to make it about yourself, and you're the victim in the story? That's why these things are so disturbing, because ultimately, again, it is used to make sure you cannot critique the powerful. And so this is a perfect example of how they use these tactics really cynically to try to shut down what is a legitimate debate and discussion about the policies that should govern our public square. Yeah. And the last thing I'll say on this is I'm lucky, okay? I got this show. I have you guys. I have the premium subscribers. Like, my livelihood is not

going to be affected by this. But let's say we still worked at the Hill. This is a problem. This is a real problem for me. If I still worked in a normal corporation or media company, this is a real issue in terms of the way that you're getting described and your colleagues and, hey, why are you being unprofessional? All of this. I have the liberty in order to expose all of it and just say, here's what they said to me. Here's the email. This is complete BS. I can fully express myself.

So I just want to say another thank you to everybody who listens to the show, to all the people who support the show. I am only able to do what I am able to because I know that you're my boss and not anybody else. Because if we're still working in media. This is a real problem. But let me say, I have no doubt that our audience is going to, you know, almost 100% support what, you know, the fact that you were clearly in the right, the Washington Post is ridiculous here. But this is not without a cost for us either because we're very dependent, you know, in terms of the YouTube world. Oh yeah. We're dependent on whether they deem us to be a trustworthy news source or not and how the algorithm deals with our videos and how much they serve them and all of those things.

So it's not without a cost and a price when the mainstream comes after you and tries to sideline you as some crank, some bully, some troll, etc. Are we a conservative YouTube show? Ask yourself that. Are we a conservative YouTube show? That's BS, okay? And just the way, yeah, look, I mean, I don't want to belabor the point, but it has real costs to us.

Not as much because we rely on our premium subs and on our audience, but, you know, this really could have been a big problem for all of us. So anyway, I want to thank you all once again just for having my back, and it gives me the confidence in order to speak out against these people. This was not a borderline case. There was really no nuance here. You're very clearly well within the bounds of public debate and discussion, and the Washington Post has lost their minds in a very dishonest and nasty way.

All right, let's talk about substantive stuff. Okay, I mean, I think that was substantive too, in my opinion. But yes, let's stop talking about us and start talking about the Biden administration is thinking about maybe canceling some student loan debt. Let's go ahead and put this Wall Street Journal article up on the screen. They say, Biden seriously considering student loan forgiveness. Officials say president may be warming to take executive action to erase at least some loan debt. Some Democrats believe a move would motivate young voters in midterms. Basically, what happened is he was in one of these caucus meetings and didn't detail his plans, but responded positively when lawmakers pushed him to forgive $10,000 in

student debt. The people said, suggesting they would be happy with his final decision. He also indicated he's open to further extending the current pause on student loan payments, which is set to expire on August 31st. Obviously, this is a massive issue just because the astronomical amounts of debt that are held by student loan debt holders, about 40 million people, 40 million people owe around $1.6 trillion in federal student debt. That makes up around 90% of student debt outstanding. So just pointing out there, this obviously whatever Biden would do would only apply to the debt that's held by the government. That makes up about 90% of student debt outstanding. The politics of this, let's go ahead and put this insider report up on the screen. So the reason that they are at long last considering this move is because

young people are not happy with the Biden administration and are extraordinarily apathetic about whether they're going to vote in the midterms. But you have a Harvard poll that found 85 percent of young Americans wanting Biden to take some form of action on student debt. The flip side of that is in this Harvard poll, which is actually interesting, worth digging into in and of itself, but they found 42% of voters under 30 don't believe their votes make a real difference. And part of that is because, you know, whatever, and we're going to debate the merits of this particular proposal in a moment, but whatever you think of it, Biden did promise to do something on student loan debt, has all of the power at his

disposal to do something about student loan debt, made that promise on the campaign trail very popular with young voters, and then here we are and he still hasn't done it. So, gee, I wonder why so many young voters feel like their votes don't make a real difference. And again, to the question of, you know, how this may impact them politically, go ahead and put this up on the screen. Biden's approval with voters under 30 now drops to 41 percent. Now, this was one of the strongest groups that helped to elect him president. You know, he won young voters overwhelmingly. At the beginning of his presidency, his highest approval ratings came among this youngest demographic. And now, as I covered last week, that has completely flipped.

So actually, Biden's approval rating is best with the oldest age demographic and worst with young voters. So they're looking at the midterms saying, guys, it looks like we are completely screwed. What can we possibly do? Joe Manchin continues to jerk us around and build back better. And that seems like as hopeless as it ever has. So this is something in our power. Geez, maybe we should actually do something at this point. Now, I do think the politics here are a little bit more complicated. For one thing, young voters, not particularly reliable midterm voters or otherwise, but particularly in the midterms. I do think that there is, you know, the backlash or the argument against this is basically like, well, what about people who aren't college, you know, college student loan holders?

And the other question, which our friend Philip asked Jen Psaki is about, OK, well, what about people who, you know, worked hard and their parents scrimped and saved and they actually paid off their student loan debt? Aren't they kind of getting a raw deal? Let's take a listen to that question. Follow up on the student loan. You said that the president is looking at a range of options with regards to canceling some student debt. But is the president looking at any options for those students and parents who saved and sacrificed so that they wouldn't have to take out such massive loans? Is he looking at including them in relief retroactively?

How would they be made whole if there was some sort of canceling of debt? You mean for people who have paid off all of their student loans? Who made sacrifices so that they wouldn't have to take out some of those loans? It's a good question. What I can tell you at this point is that there's legislation he'd be happy to sign for individuals who have $10,000 in existing student debt. If Congress wanted to send that to him, he'd be happy to sign it, and he's looking at executive actions and authorities. But I don't have anything to preview on that front. So I think those two things are potentially politically potent.

Both the question of— I think they're fair questions. It's definitely a fair question. I will point out on the substance, and I want to get your thought on the politics, and then we can talk more about who actually would benefit and some of the details behind this. But you already do have subsidies for people who are higher wealth and able to save in advance for their kids' college. So you have covered out in 529 education savings accounts so that you can have tuition functioning as a tax advantage intergenerational transfer. So you actually do already have subsidies in place for those parents that Phil is talking about there

who are able to save in advance for their kids' education. So in fact, the system is kind of unfair right now towards those who don't have the ability to save in advance and have to take out these massive student loans. But on the politics of it, I think it is overwhelmingly popular with young voters who disproportionately are the ones who are burdened by the student loan debt, who

feel their futures are constrained by the amount of debt that they oftentimes graduate college with, who were sold this bill of goods of like, you know, the answer to everything is to get a college education. I think that's particularly true of Black Americans who were told basically like, this is the way to build wealth. This is the way to close the racial wealth gap. And ultimately, you know, it didn't end up being the certain ticket that they thought it would be. And because the costs are so outrageous, they've been saddled with something for life. So for young voters, do I think it will help?

Maybe marginally at this point. But I do think the overall politics are a little more fraught than maybe people would want to— people with my ideological view would want to— I'm glad you could say that because I do think that this is an important point. More than half of young people did not go to college. And so, look, I believe ultimately—I think the people who got saddled with student debt got sold a bill of goods. But you know who I blame the bill of goods for? The university system.

So bailing out the university system who continues to bilk these kids, not have any actual stake in how they're doing, and also not change university financing, let's be honest too. Where is the major bloat coming in university budgets that's increasing tuition? Diversity and inclusion initiatives. So we should all bail out the diversity departments of Yale, Harvard, Texas A&M. Is that true? But I just don't genuinely don't know the numbers. I know administration overall. So I don't know that I have seen any numbers that back up that the overwhelming amount of the bloat is for diversity.

Let's just say it's all administration. You can ask yourself where most administrative costs, new costs is being outlaid to. And I'd say it's both my parents' work and university administration. But there's been escalation in administration for many, many, many years. Oh, absolutely. I'm talking in the last 10 years, which is also when the highest spike has also been.

But I think the most valid critique and the most good faith critique here is the idea of like, okay, but what then? Yeah, that's my point. You do this one-time thing. Now, for me personally, because I do think that this is such an outrageous situation and a relatively new one too.

I mean, it's easy for us to forget because we've always come of age during a time when college tuition is fucking insane. But this is actually a really new phenomenon of it being so insanely expensive that no one could hope to be—very few people could hope to be able to actually afford it up front. And since it is such a burden that really does weigh down younger generations, and we've talked here about how, you know, this sets everybody back from being able to own a home, from being able to start a family. Student loan debt really puts this weight on top of both millennials and Gen Z, that it is worth some sort of solution, even if it is, you know, not 100% of what you would ultimately want. So what I would say is don't let the perfect be the enemy of the good. This is the tool that is at their disposal. This would provide tremendous relief for, you know, millions and millions of people.

And so I do think it's worth pursuing, even as I acknowledge it's nowhere near a complete solution without those other reforms that you're talking about. My point would be, first of all, I think it would be a political disaster because I think a lot of people will feel slighted. But two, and I should also be clear, I actually believe in very poor student loan forgiveness. However, it has to be paired with a complete change in the financing system of the universities.

Number two, we can never let this happen again. I was looking at some of the data. Even if you wipe out $1.9 trillion in debt, the debt load in about five to ten years would also be $1.9 trillion. So what? We're going to wipe it out again? Yeah, do it again. No, but we can't do that because we're just bailing out the university system. So, but that's just an argument for, you know, okay, you do this and then you have to actually reform. You have to have, you know, I personally think we should have free public college, public university at this point are at least very affordable.

So that's just an argument for this isn't the end-all be-all. This is just the beginning. But I think it's, I think again, to say, well, it's not perfect and it doesn't actually solve the whole problem. So let's just forget about it. Well, that's to, that denies a lot of people relief right now that would be very beneficial to them. And so we have some stats that, you know, kind of make points in both directions. Let's go ahead and put the next piece up on the screen there from Brookings. This is interesting because a lot of the help would go to people who are relatively high income, who went to graduate school. If you did, you know, and this is if you did complete debt cancellation. So what Biden's talking about at most is $10,000, even that's uncertain. And they've

also floated like, you know, it may be income based. So some of this debate may be a little bit moot. But, you know, they point out that in this piece, which I actually hadn't really thought about, that in fact, the way to think about it is, okay, well, how much of this debt, how much is this debt as a percentage of your income? Because obviously, if you're someone who's earning a relatively low income, you're going to experience that $10,000 in debt as a much heavier burden than someone who's at the high end of the income threshold. And the person who wrote this analysis made the case of like, you know, sales tax is widely considered a regressive tax

because it takes up more of your income if you are a low-income person. Even though wealthy people, because they spend more money, they pay more of the tax. So it really is important to think about it in relation to a percent of income. And then also, we'll get to in a moment, it also is very different.

The picture is very different when you're thinking about income versus when you're thinking about total wealth. And one thing we've talked here a lot about recently is how much the sort of asset and wealth economy is even more important indicator at this point than thinking about just what your income is. Because you could have a relatively low income, but if you've got, you know, if you own a home, for example, then you're in a much better position. So people who have high levels of student loan debt, that really puts a huge burden on them in terms of being able to buy a home or have that asset creation that puts them into middle class life. So that's why I think even as it's not, you know, 100% or perfect solution or all that I would see, all that I would want to see, having at least some student loan debt relief will really be significant for a generation that

has just gotten screwed over again and again and again their entire lives. Let's put the next one up there on the screen because this is also important. So take a look actually at that pie chart because the largest amount of the benefit only 60% of household, bottom 60% receive only 34% of the benefit because of the outstanding load of the amount of debt. People cannot conceive of just how much debt these lawyers and these doctors are holding. And once again, I just am completely against the idea of bailing out these low-rate law schools, which are charging $60,000 to $100,000, really criminalizing a lot of these students and setting them up for lifelong amounts of debt. Are you opposed,

though, even to the more like $10,000 or if it's income-constrained? It depends because, once again, even on the $10,000—you know, here's another point, which is part of the reason why the student debt is so high amongst the bottom quintile because the bottom quintile is also disproportionately more likely not to have gone to college or not graduated from college. So the data does show us that if you actually graduate, you're mostly on track in order to pay off your debt

if you went to a public university. However, the people who get most screwed, who take out loans and then they drop out. So actually those people I'm the most concerned about and I'd be most in favor of wiping out their debt because they have none of the benefit, all of the saddle. So that's really tough. Like I said, and I think about this a little bit like Wall Street. Look, there was a decent case to bail out Wall Street, right? Like, hey, we got to bail out Wall Street.

People need to make payroll. We need a financial system, all of that. But did we deal with the underlying problem? No. We actually have probably more of a criminal Wall Street system than we do today than before because we didn't solve the incentives. Regular borrowers are not equivalent to Wall Street ghouls who deserve to go to prison. Right, but the whole point was at the time is how are people going to make payroll? Normal-ass people need to get their paychecks.

That's why we did it, ultimately, in the first place. There was a case, a decent case at the time, that real people's lives were going to be affected by a complete bank collapse, which was correct. But, and I think the correct case at the time, which I know you agree with, is we had to change the underlying system, which we did not do. So we can't keep doing this. I don't think it's a good analogy because you're talking about bailing out people who profoundly did not deserve it. This is talking about people who profoundly do deserve it, who were really like sold a bill of goods, you know, walked down this rosy path of just take on the debt, go to college. This is a way to build wealth. And then we're stuck with a bill that is just completely insane and which, by the way, if we're just being real, many of them will never pay.

I mean, that's part of it, too. It's kind of like Social Security. The amount of debt that has been loaded on top of these generations, it's just going to be with them hanging like a rock around their neck for their entire lives. So, yeah, it's, you know, I would like to see us reform our system so that we have free public college. I would like to have debt completely wiped out. But I would support even a limited forgiveness so that people can start to get ahead again. Because, you know, the real path to the American dream at this point is to be able to own a home. And if you've got this debt burden on top of you for your entire life, it makes it so difficult for you to be able to ever become part of the asset ownership class, which is why we see millennials and Gen Z so consistently

screwed. We have some, this is, let's put Matt Brunig's analysis up on the screen here because this is interesting as well. He's got just some numbers about what is the current student debt situation. You could see there just how much money is owed, somewhere between $1.1 trillion and $1.65 trillion. Let's go ahead and put the next piece up on the screen, the next chart that we have here. So this makes the case you're making, Sagar, of if you look at the share of student debt owed by each income quintile, it actually goes up as you become wealthier. But he points out another way of thinking about it is if you look at the share of student debt by wealth rather than income, go ahead and put this next piece up on the screen, the dynamic actually flips. And that's partly because if you are weighed down by student debt, then undoubtedly you're going to have less wealth overall because that student debt is putting a tremendous burden on you and bringing your wealth down to really low levels. So you have here

the least wealthy fifth quintile has 55% of the share of student debt. So I think, you know, that's a really important distinction to make too, is it's one thing to think about income flows in, but not everybody who is, you know, earning the same level of income is in the same boat in terms of their overall wealth and ability to own assets. Yeah. And let's put the next one up here just to be entirely clear about what the Biden people are actually considering. So a source familiar tells NBC that they are thinking no decision is made and that any loan cancellation would be linked to income. So according to the people I've spoken to, a 10K, up to 10K capped by income is the most

likely scenario. Look, I mean, I guess I would be okay with it, but I actually think it would be dramatically unpopular. And one of the reasons why I'm against this type of ad hoc type policy is we have to have everybody have some buy-in here. So I would be much more in favor of a $10,000 type wipeout as long as we restructure the incentive systems for all younger Americans. So think about how many working class young people over the last couple of years have been saddled down by credit card debt and others. If you even look at the polling data on why people aren't getting married or having children, the number one reason is financing. So again, in a country where 55% of people don't even go to college, don't even try, they also have an

immense amount of debt. I would be much more in favor of, okay, let's take 10K, cap it by income. Those people, all this here, frame it as like a new start, a new deal, some sort of thing for those folks. Because universal systems like Social Security and Medicare, where everybody in a generation actually universally benefits from something, is just much more preferable to me. Because right now, this is class warfare. I mean, let's be honest. These people are disproportionately Democrats. So it's a bailout also of their own voters. And also it's just, I don't think it's right to have the educated class get a bailout when young working class folks who actually pay taxes are getting nothing from this. It all depends on what problem you're trying to solve, right? If the problem you're trying to solve is just like people have been

screwed overall and so they should get help overall like which i believe honestly like i'm totally good sending out a ten thousand dollar check to everybody in the country and having it happen on a routine basis and you know redistribution so that we have uh you know massive transfer wealth to make the country less unequal i am 100 on board with that i don't hear that uh particular argument coming from many conservatives. No. Mostly they just want to argue against any help for anybody. And so, you know, if the problem you're trying to solve is people are poor and they need help overall in general, they've been screwed. Okay, that's one problem that requires a universal solution. If the problem you're trying to solve is people have been screwed over specifically by the college education system and the massive tuition bills, then this makes more sense as a solution. And by the way, you know, the younger you go on the demographic scale,

the more likely you are to have gone to college. So like Gen Z, overwhelming majority, do some college. They may not graduate with a four-year college degree, which gets to your point of like, those are the people who really get screwed. But, you know, to paint this as like, oh, it's just for the educated class. I don't think that's fair because you have so many young people now who do go to college because they've been sold. This is the only way you can even have a chance at succeeding in American society. So listen, to your point, what we're likely looking at here is going to be probably very limited if it happens ultimately at all. And I think that will limit some of the Republican attacks on it as well because if it is constrained by income, that makes it much harder to paint it as just like a wealthy class bailout.

But, you know, I think it would be at least some help to a lot of people in generations that have been pretty much heard. We'll see how it works out. Let's talk about Bernie Sanders here putting a little bit of pressure on Joe Biden. We'll see how far they go with this. So one thing we've been talking about here is the fact that, all right, Amazon Labor Union won historic victory against Amazon, against all odds. Absolutely incredible. Now they have to get a contract negotiated. And that is no small feat because these companies, the way the law is written

now, they can drag their feet. They can, we already know Amazon is even challenging the legality of this election. Then if that, you know, when, once that goes down, which it is likely to, not certain to, but when it's likely to, then they can drag their feet on negotiations, pretend they're negotiating in good faith, that's the language in the law, and never ultimately come to a contract. And there's basically nothing to stop them from doing that except for the militancy of the workers themselves. However, Joe Biden, on the campaign trail when he promised to be the most pro-union president in history, said, hey, we're not going to give federal government contracts anymore to companies that union bust. Well, okay, you have Amazon now accused by the NLRB of illegally union busting, including firing workers like Christian Smalls in retaliation for organizing. And they're up for a $10 billion cloud contract, cloud computing contract with the NSA.

So Bernie, let's put this element up on the screen, has just sent a letter to Joe Biden urging him to bar companies that violate labor laws from eligibility for any federal contract, specifically calling out Amazon for illegal anti-union activity and noting it is in line to receive that $10 billion NSA cloud contract.

So Bernie writes this letter just basically saying, hey, listen, I loved it when you said this. That was great. Now it's time to actually do it. And I want to give credit to our friends and partners over at Lever News because they have been on top of this from the beginning. I think this is part of why independent news is so incredibly important. The Bezos Washington Post, unlikely to cover this story with quite the tenacity that our friends over at Lever News will put this tweet up on the screen. They exposed that Biden was giving that $10 billion contract after pledging to ensure federal contracts only go to employers who sign neutrality agreements and commit not to run anti-union

campaigns. However, not mentioned very much in corporate media. So Lever News really provides the sort of cudgel here that Bernie then was able to use in writing this letter. So listen, next question is, what are you going to do to apply pressure? Yes. So I really, you know, it was great seeing Bernie and AOC there rallying with the workers. There was some beautiful footage that came out recently, Bernie talking to Starbucks workers behind the scene. Heartbreaking story of a young worker there who had cancer and had to work full-time

to afford their healthcare and was going through chemotherapy. I mean, it's just horrendous what these workers are ultimately put through. So I've been really, you know, it's been great to see Bernie out there standing in solidarity with these workers. But now it's like, okay, you and the squad and the rest,

how are you going to apply pressure and continue to call out Biden to actually make it possible that this happens? Because this is how the government, even with the laws as they're written now, could help to back up the workers and help provide them with leverage to actually get these contracts done.

Yeah, and look, this is a real story. I mean, people forget the JEDI contract, the $10 billion cloud computing contract, has been hard fought between Amazon and Microsoft for the last, like, five years. Basically, Amazon sued the Pentagon and started this whole process alleging political interference by Trump by saying that they were retaliated against because he doesn't like Bezos. Maybe true, but honestly, I don't particularly care because I don't think they deserve the $10 billion contract for a variety of reasons, like you're saying. But what ended up happening is that legal warfare happened over three years. And the Biden administration specifically are the

people who gave Amazon the contract in August of 2021. This is a $10 billion cloud computing contract for the National Security Agency and the NSA. Now, Microsoft has now been screwed out of the deal. Amazon is getting the $10 billion. And as you say, the Biden administration, having awarded the contract, is full within their rights in order to enforce administration policy. We don't do business as a government with people who do this type of stuff. So look, it really is on Biden right now. I mean, my money is, he's not going to do anything about it. Right. But that's why, like, now the question is, how do we apply pressure? How do we make enough public outrage and enough like- Oh, we're talking about it here. Yeah. Yeah. Enough damage done to the Biden

administration where they have to actually consider doing something about it. So the other thing that I will say here that's important to remember is, you know, oftentimes Biden and all these other politicians, they want to pretend like, oh, we have no power. We can't really do anything. The best I can do is like sort of, you know, signal support for the Amazon labor union before my press secretary quickly walks it back and is like, oh, we're totally neutral. That's just a lie. First of all, you know, it is actually the responsibility of the government to encourage collective bargaining. That is in the law. That is the status of the law. And you can see that they do, in fact, if they want to, have a lot of tools at their disposal to make life difficult for companies that want to engage in illegal union busting.

And that's not just at the federal government level. We're actually going to talk to our friends at Lever News for a segment that I'll post on Friday about the state subsidies that Amazon gets with also written into this provisions that say you're not going to union bust. So enforce the contract, actually enforce the law against these large companies the way that, you know, certainly the book gets thrown at individual regular people when they transgress. And so I think it just exposes also the lie that these actors are powerless and can't help to try to bring these companies to heal and backstop the workers in their efforts both to unionize and to gain win contracts. I think that's well said. Okay, let's go ahead and move on. This is a hilarious story. Also, apologies. Looks like we spelled that wrong. It's Archegos, not Achegos, but it's okay. Let's put this up there on the screen. Archegos founder, Bill Wang, the former CFO,

charged with securities fraud. Guys, this story is completely insane. So if you don't know who Bill Wang is, he was worth roughly $20 billion as of a year ago. But now him and the former CFO of his company, Archegos Capital, have been indicted on securities fraud and racketeering in what they say is one of the most massive fraud and manipulation schemes in the history of Wall Street that nearly jeopardized the entire U.S. financial system. And this is nuts because what it exposes are all kinds of weird regulatory loopholes through which family offices are governed, loose regulation based upon that, and the way that the banks themselves just simply believe the words of companies. So to be clear here, the word of Bill Wang and his company Archegos was good enough for the top banks on all of Wall Street. They show that under the family office founder that the blind spot makes it so they will simply take your word as a company to loan you hundreds of millions and billions of dollars, which you can then use that money in order to place immense bets on other people's stock and then wildly swing

the U.S. financial system. So here's what they say. This is from the U.S. attorney. Lies fed inflation. Inflation fed more lies. Last year, the music stopped, the bubble burst, the prices dropped. And when they did, billions of dollars evaporated overnight. So what they're charged with is securities fraud that manipulating hundreds of billions of dollars in stock. So what they point to is that they have trades as counterparties are allowing large purchases, then increase people's stock price. They increased in stock price, which he uses, or the purchases he uses with using his fake word, are then used to inflate securities, which then through complicated securities fraud, you are able to reap profits off of that. But it

requires everything to keep going up. So when this music stops, the bottom falls out. Crystal, they went from 1.5 billion to allegedly35 billion under management in a single year. Wow. This is totally nuts. Yeah, I mean, this is a little bit complicated. The way I understood it is basically like a high-class pyramid scheme. Yeah, that's it. Because that's exactly what it is.

I mean, they keep, you know, as long as you keep going up and up and up, you don't have to ever pay the piper. But the minute that there was a faltering, then everything, the whole house of cards completely collapsed. The way the New York Times described it is they say, prosecutors say Bill Huang, her firm's owner, and his former chief financial officer had deliberately misled their banks. So they lied to the banks to borrow money and then place these enormous bets on a handful of stocks through sophisticated securities. Those trades were obfuscated. So it was not transparent. That was part of the problem. By the loose regulations governing so-called family offices like Archegos, where wealthy individuals manage their investments, when that strategy collapsed, so when the price went down on one of these stocks significantly,

the whole thing collapses. In just a few days, $100 billion in shareholder value vanished, hitting the portfolios of investors who had invested when the unseen hand of Archegos was actually what was pushing those stocks to new heights. So their use of these highly leveraged, sophisticated financial instruments was what was actually driving the price spikes. So they had effectively rigged the market. And because you had no transparency around it, the banks and financial, nobody knew that it was really them that were causing the inflation of these stocks. And so then when one of them fell, they were so highly leveraged that then there were marching calls and the whole thing ultimately collapsed. What else is fascinating, like I was referring to

the family offices, which is that in recent years, there are not any regulations over family offices in the same way for public disclosure as for hedge funds. So Archegos was just one of several hedge funds which has converted to a family office in recent years because they are not under the same amount of regulations by the SEC. And thus, what's been happening is that these family office hedge funds are able to just simply tell the banks, take our word for it. And what I love about this is it just exposes how BS it all is.

Think about it. A car loan. How many people out there had to go get a car loan? Paperwork. Oh my God. Mortgage. Any credit application. You have to go through and talk to your landlord

from like nine years ago in order to get all this done. When you're trying to borrow like half a million dollars, these guys are getting spotted billions based upon their word. No due diligence done by the bank, which is illegal, actually. You're not supposed to just loan people money. But they're like, ah, yeah, he's good for it. Wire him half a, five billion, ten billion.

This dude had been in trouble for doing something very similar before. And had been like disbarred and he kind of fell off the radar for a while. And then he makes this big comeback basically like with a revamped scheme of his previous fraud. So pretty interesting. And I think you're right. It really does expose how fake and rigged and non-transparent so much of this is. I mean, there is no way that this individual is the only one who's engaging these type of shenanigans. Not a chance. Not a chance. Interesting. Trung Fang, he does these great threads on Twitter. Let's put this up there.

I highly recommend everybody go and check his thread out. But he says in the thread that due to the nature of the swaps that Archegos had built up, their portfolio, like I mentioned, went from $1.5 to $35 billion. But with the nature of the swaps, Crystal, total exposure was $100 billion. And just simply the decline of Viacom stock alone is what led to this entire thing going down because they were leveraged at five times. So just a 15% to 20% sell-off is enough to wipe out an entire element of the portfolio. And then what happens is that when the banks start selling all their large blocks of Archegos-linked companies and a 30% decline on a single day, boom, you just see how it all completely falls apart. So look, guys, all it really is is a perfect view. And it's hard. It's enough to try and explain swaps. And the way this all works is

at a very basic level, you can manipulate stock and then tell the banks that you're not doing it. And then they'll still wire you money as long as you're worth over a billion dollars. While normal people, I mean, think about how hard it is to get a freaking credit card for half the people in this country right now. So really, it's just completely ridiculous. Yep, absolutely. Okay, speaking of completely ridiculous, let's talk about Madison Cawthorn. I have to say, we have not covered a lot of these stories.

Yes, right. Because ultimately, he's one member, extremely cringe member of Congress. But now he's implicated potentially in a sort of insider trading scheme. And so there have been a whole litany of things that have been going on with Mr. Cawthorne. So let's just go through the list here. First of all, you know, he had that whole thing, which we did cover, where he like, you know, said, oh, you wouldn't believe the orgies

and the cocaine use that I've been invited to. And he's one of these who's positioned himself as like super Christian and super, we got to, you know, the real men have to come back and the sexual deviance is terrible. That's the type of like way that he's framed and positioned himself. So somebody who clearly hates him released these photographs of him. Let's go ahead and put this up on the screen. To Politico that shows him cross-dressing. See some women's lingerie here. Clearly some sort of public party scene. And I am the last person in the world to criticize someone for taking, you know, embarrassing or risque photos. However, I also didn't position myself as some sort of like Christian fundamentalist, you know, Puritan type of individual.

And he has. So I think, you know, listen. Apparently he's taking on a cruise ship. Whatever. He can do whatever the hell he wants in his personal life. I really don't care. But don't be a hypocrite about it. Okay, so that's number one.

Next up, he has, for the second time now, been found and detained ultimately for having a gun, trying to bring a gun onto an airplane. Let's put this up on the screen. All right. Officials say a loaded gun, loaded, has been found in North Carolina U.S. Representative Madison Cawthorn's carry-on bag at an airport security checkpoint. It's the second time that he had been stopped with a gun at an airport in the past 14 months, subject to a fine. I guess apparently he was- He says he forgot it in his bag, but twice? I mean, come on, man. Twice? Like, how does that happen? Right. And I have to think that it would be a pretty extremist position, the people who are super comfortable with anyone bringing a loaded gun onto an airplane. So-

Weird. that happened. He also last month, for the third time in five months, was cited by state troopers for a traffic violation, including driving with a revoked license. So that's another thing that happened. But this is the incident that really caused us to want to cover all of this. Go ahead and put this, I think it's Washington Examiner report

up on the screen. Madison Cawthorn implicated in potential insider trading scheme, experts say. All right. So here are the details. They say Cawthorn may have violated federal insider trading laws as he hyped up an alleged pump and dump cryptocurrency scheme. Multiple watchdog groups told the Washington Examiner. Worth noting, Washington Examiner is a conservative outlet. So this is not some, like, liberal elite media hit job here. Oh, yeah, and the reporter is actually a guy I know a long time, Andrew Kerr.

He's a good dude. I mean, this is obviously a very, like, solidly reported piece. posed at a party with a hedge fund manager and ringleader of the Let's Go Brandon cryptocurrency, a meme coin set up in the wake of the chant-mocking President Joe Biden. Cawthorn posted, The next day, that coin ended up performing extraordinarily well. Why? Because NASCAR driver Brandon Brown announced that the meme coin would be his primary sponsor of his 2022 season, causing that coin's value to spike by 75%. Multiple watchdog groups told the examiner that his Instagram post suggests he may have had advanced non-public knowledge of that deal with NASCAR driver Brandon Brown. The Watchdog said the post combined with Cawthorn's statement that he owns some of LGB coin warrants an investigation from the DOJ and the

Securities and Exchange Commission to determine whether the lawmaker violated federal insider trading laws. So this cryptocurrency price goes through the roof after this deal is ultimately announced. However, then NASCAR ultimately rejected the sponsorship deal. Unidentified insiders that owned an outsized share of the coin dumped all their holdings at once. The coin completely collapses. And so it goes from being worth $570 million to being worth nothing. Wow. And so Cawthorn is caught up in all of this because before this deal is announced, he's posting, hey, you know, I love this coin. I've got this. I own some of this coin. It's going to the root through, what did he say, going to the

moon. Yes. And then the very next day, this deal is announced. So at the very least, it looks extremely sketchy. He, of course, denies wrongdoing or his office or whatever. But it's catching the attention of some of his Republican colleagues. This is his fellow North Carolinian, Senator Tom Tillis, who already, it should be said, has endorsed against Cawthorn. Yeah, he hates Cawthorn. In his primary. And he says, put the tweet up on the screen. Insider trading by a member of Congress is a serious betrayal of their oath.

And Congressman Cawthorn owes North Carolinians an explanation. There needs to be a thorough and bipartisan inquiry into the matter by the House Ethics Committee. So that is where things stand, Zagre. Yeah, I mean, look, it looks bad. This is also why you shouldn't be pumping any coin whatsoever. I mean, and if you are- When you're a member of Congress, that in and of itself is gross. Look, yeah, exactly. And by the way, I'm pro-Bitcoin. But even whenever I see Bitcoin congressmen who are like, go Bitcoin and they own some Bitcoin, I think it's an issue. So I can say it. I'm not a public official.

And even then, I always disclose. I'm like, just so people know, I'm into Bitcoin. So this is one of those things where I always think that at the very least public disclosure is needed. But, yeah, when you're a public official, an elected official, and you're personally netting whoever knows how much money off of this, that's a real issue. I do think there needs to be an investigation. And he did use his authority, they say, as a lawmaker to introduce a resolution in the House in February that would deregulate cryptocurrencies. So he has been involved in trying to promulgate legislation that ultimately would personally financially benefit him. And I would probably

even support that type of legislation as long as— Don't be conflicted. Exactly. You cannot be conflicted whenever you're a member of Congress. So just look, we're going to call this out any time that we see it. I think it is important that it came from the Washington Examiner, and I do think that it does merit an investigation. And just in general, I mean, it just seems like his life is a mess right now. I don't really know what's going on.

I don't know how you forget a gun in your luggage twice. But, look, I would just generally say conduct yourself in some better decorum, Congressman. You're already running in a tough re-election. Somebody said that he's trying to run for re-election on hard mode. This is a gamer term. It's one of those things where I'm like, I don't exactly know why anyone would choose that, but good luck to you. Crystal, what are you taking a look at? Well, guys, over on Fox Business, your Barney is using Elon Musk's takeover of Twitter

to fan the undying flame of his romance with the billionaire class. Here we go again. The left hates what they call the billionaire class. Musk's takeover of Twitter has really got him going. We need a wealth tax, says Santa Elizabeth Warren. We must demand the extremely wealthy pay their fair share, says Bernie Sanders, to which Elon Musk cheekily replied, I keep forgetting you're still alive. Socialists never have a sense of humor. The New York Times chimes in today with a study

showing the top 18 families in America have an average net worth of $66 billion. Oh, the horror. Now, I don't expect billionaires to get much sympathy, but I think they should get some respect. First of all, Musk, Bezos, Zuckerberg, Gates, they've created companies that employ millions, and those people enjoy high income and very strong benefits. Isn't that what the left wants? Yes, but the left wants government to provide those goodies, which, of course, they never do. And look at what the super-rich have done with their billions. Musk has developed Tesla, SpaceX, SolarCity, The Boring Company, Neuralink, and now Twitter, all dynamic breakthrough companies.

Thank you, Elon. Bezos has developed the world's best online shopping company, AWS Cloud Services, Whole Foods, Ring, Twitch, PillPack, all dynamic breakthrough companies. That's where the money went. Thanks, Jeff. My point here is that the accumulation of great wealth has actually enriched America, all of us. All right. There's a lot to unpack there. So first of all, he seems to believe that if billionaires were actually taxed at rates like what you and I are taxed at, that they would throw a temper tantrum, go home, and stop inventing their wonderful things. In a sense,

Musk actually provides a powerful counter to that. He at least professes to be interested in Twitter for reasons other than adding to his already limitless fortunes. These dudes already have more money than anyone could ever spend in an entire lifetime. Would they really just close up shop if we closed some loopholes or had a wealth tax or made them pay their workers enough to make rent? Speaking of which, Varney's portrait of the left is, of course, a total straw man. He argues the left wants to close Amazon and, like, have it run by Anthony Fauci or something. Here's what the godfather of the left, Bernie Sanders, actually wants from Amazon. Now, when you're worth $170 billion, as Bezos is, when you've got a corporation that is making huge profits, you know what? You can pay your workers good wages, you can provide good benefits,

and you can have decent working conditions. So, recognizing a lawful union, negotiating a contract, treating people like human beings doesn't seem like such a crazy thing to me. And judging by the overwhelming bipartisan support for the Amazon labor union, it's not crazy to the American people either. What is actually extreme is Varney's fawning appraisal of our elite ruling class and desire to do nothing but cut their taxes and worship their very existence for all eternity. After all, Varney's core thesis is this, quote, the accumulation of great wealth has actually enriched America, all of us. Has it, though? The overwhelming majority of Americans, including Fox News viewers, certainly don't agree with that. According to a Pew poll from last year, only 21% of Republicans think that billionaires are good for the country. A comprehensive Vox and Data for

Progress poll that dived even deeper into the nation's increasing animosity towards the billionaire class has a lot to say about this. 72% of voters polled felt it was unfair that billionaires profited off of the pandemic. A mere 23% felt the billionaires were good role models for the country. Only 36% felt at all positively about billionaires. Majorities also felt the billionaires were already too powerful. 61% felt that they were too influential in the 2020 election, including actually higher numbers of Republicans than of Democrats. And it is no mystery why the public increasingly views the entire billionaire class with complete contempt. While the working class was struggling, suffering, and dying during the pandemic, our plutocrat overlords were raking it in, growing exponentially richer off the backs of poorly paid, mistreated workers.

In fact, the pandemic helped to swell the ranks of the billionaire class, adding 573 new names to the list. Not only that, but the overlords running our largest monopolies are taking advantage of inflation to increasingly price gouge consumers, adding to mass misery and suffering. And we all see it, guys. It's not a secret. But there is a catch here. While Americans look with disgust on the billionaire class as a whole, when they're asked about specific billionaires, namely the famous ones that Varney happens to mention, they have much more positive feelings. Musk in particular is actually quite popular with both Democrats and Republicans, contrary to current perception on Twitter. Varney likely knows that, so he holds Musk and Bezos up as if they are typical representatives of the billionaire class. But the reality is that precious

few of our nation's ever-expanding billionaire class are actually even delivering anything that the American people might want. Quite the opposite. According to Forbes, the largest single industry concentration of billionaires is actually Wall Street's money changers, whose wild speculation has for decades destabilized our economic system and which has long been divorced from simply supporting the real economy. People who did little except be born into the right family also have quite a significant precedence among our nation's billionaire class. Looking at the Forbes list of the 400 wealthiest people in America, 117 inherited fortunes. Have those billionaires' accumulation of great wealth actually enriched America?

Enriched all of us, as Varney claims? Are you better off because the Walton heirs could throw their weight around in politics, including, by the way, pushing privatization of water rights in the West? And even with the supposedly good billionaires, are you better off because Bill Gates persuaded the entire global public health community to cower before big pharma's patent rights? Is your life improved by the millions that Michael Bloomberg has spent to buy off politicians from Stacey Abrams to San Francisco mayor London Breed? And are we actually better off because apparently the best we can hope for in our modern public

square is to perhaps get a slightly better billionaire in charge? Because if, like me, you actually care about free speech, you'd know that the only real protection of such fundamental constitutional rights is through public democratic accountability. As Ben Burgess writes over at Jacobin, many centrist commentators seem alarmed at the thought that ordinary working class people will be too free to express themselves as they please and access a broad range of points of view so they can make up their own minds about what's right and what's wrong. I have the opposite concerns. I worry that we won't be able to count on Musk to stick to his stated principles when they come into conflict with his profits. It's as if we lived in a kind of libertarian dystopia where every inch of every

city was private property, and we could only hold protest marches on sidewalks that happened to have been bought by billionaires who were personally friendly to free speech. A horrible thought indeed, but very much what we're facing. Now, at least with Stuart Varney, you can say the man's been consistent. I have never known him to do anything other than simp for wealthy elites. But there is a portion of the right that has postured as anti-elite and have really exposed themselves as exultant at elite power, so long as the elites are seen as on their team. Writing at the American Conservative, Matthew Walter observes that, quote, the question for the new right appears to be not whether we should be ruled by billionaire capitalists, but which billionaire capitalists should hold sway.

Quote, Conservatives who want Musk to purchase Twitter are not interested in altering, or even seriously questioning, the essentially oligarchic structure of American society. Instead of committing themselves to a program of broad-based structural reform, one that might entail, for example, the nationalization of ISP, search, social media, and other basic internet functions as public utilities, and thus subject directly to various First Amendment protections, they accept that the money power will continue to hold illimitable dominion. Now, Sagar, I think, has been among those with an honest take that, look, relying on

billionaire benevolence, not ideal, but might be the best we can hope for in the current order. Fair enough. But if there was a genuinely aligned left-right horseshoe movement to change that current order, we might have a little bit of a prayer. Unfortunately, what we've seen in the caveat-free cheerleading coming from Plenty is that they're actually much closer to Stuart Varney's overt embrace of a new feudalism led by modern-day billionaire aristocrats than they are committed to any actual populist belief in the democratic voice of the people. Spoiler alert, for everyone pinning their hopes on the good graces and principled stances of Elon Musk or of any other billionaire,

he, like every other flawed human being, is going to disappoint. The Varney thing is so incredible. He like uses this like... And if you want to hear my reaction to Crystal's monologue, become a premium subscriber today at breakingpoints.com. All right, Sagar, what are you looking at? Well, okay, let me say this at the outset. I never set to cause chaos. On Tuesday

evening, I was minding my own business. I went to the gym. I sat down at my computer, catch up on the news. I noticed a funny story. Vijaya Gade, the head of Twitter's policy team, the chief censor at the company, who famously sat on the Joe Rogan podcast, Gaslight the World, on their policies when she was pressed by Tim Pool, reportedly broke down crying in a meeting after Musk bought the company. Here's a tweet. Basically, what I said. My editorial was that she was, quote, very upset about the Elon Musk takeover and noted that she was the one responsible for censoring the Hunter Biden laptop story. Was it mean-spirited? Kinda. But I have no sympathy for the people at the top of the censorship regime, and I admit some serious schadenfreude was going on. So I sent it, and I

moved on. Until my phone buzzed, and since then has basically not stopped buzzing. I checked it, and turned out that Elon Musk himself had replied to that tweet, with quote, Suspending the Twitter account of a major news organization for publishing a truthful story was obviously inappropriate. Now look, obviously I never expected Elon to reply, and I agree with the sentiment. I thought it was a good thing to see the new owner of Twitter respond on a matter where Twitter so obviously flagrantly titled its censorship regime on the part of a single candidate in the race. Honestly, I didn't see how anyone could really disagree with what he said. But was I wrong? The blue tech technology press got very upset, not just with me, but with Elon, and reverted to their favorite accusation, that Elon and I were apparently racist and sexist for targeting Vijaya Gade.

The San Francisco correspondent for the Financial Times, Dave Lee, immediately said, Moments after Elon Musk publicly criticized the work of Twitter policy exec Vijaya, her Twitter mentions are full of hateful tweets. Is this how he plans to run the company? It was retweeted thousands of times. Oh God, not hateful tweets. Oh no. So Elon is responsible for what random people say because he and I highlight that she was part of one of the most shameful events in the company's history and behind one of the top reasons Elon bought the company in the first place. Tech press dean Kara Swisher jumped in, saying it was appalling to see Vijaya attack. She begged Jack Dorsey to come to her defense, decrying, quote, racist rants against her on Twitter. So, let's say it. Racist tweets against Vijaya are obviously bad.

But this is a Taylor Lorenz tried-and-true tactic. You are not allowed to criticize people, even if they are in immense positions of power, because people might be mean to them. Now, noticeably, of course, they're allowed to be mean to you. And when people are mean to you as a result of their criticism, then anything that you have to say is totally illegitimate. How about this? Let's be mean to each other. If there's fallout, so be it.

Furthermore, this fits a pattern. If this were a normal Twitter employee making like $ Furthermore, this fits a pattern. If this were a normal Twitter employee making like a hundred grand, a 27-year-old program or something, that's a fair enough response. But this woman was literally in charge of the most censorious action in Twitter history, from Hunter Biden laptops to making the call to take Trump off the platform. Furthermore, as you see before you, she received a 130% raise last year, bringing her total compensation to $16.9 million, up from the $8 million she was paid in 2020. I got no sympathy for somebody who is a public figure and a multimillionaire getting criticized for purely policy reasons. The

fallout continued, though. The press really just would not let it go. Will Ormias, he's the technology reporter at The Washington Post, was extraordinarily upset, saying Elon had now publicly agreed with and amplified criticisms from the right of two Twitter employees. One, myself, who accused the top policy exec of censorship, and another, a company lawyer for facilitating fraud. Now, let's dissect that latter tweet. In the latter one, Mike Cernovich on Twitter highlighted that Twitter's lawyer, Jim Baker, who was general counsel at the FBI, was one of the people who personally arranged a meeting between the FBI and Michael Sussman, who you might remember as a fabulous liar pushing Russiagate lies ahead of the 2016 election. Baker was later criminally investigated by the FBI for lying and was forced out for his role in Russiagate. All Elon replied was, quote, sounds pretty bad. Yeah, it is. A Russiagate liar working as a lawyer at the company seems bad, especially when that company censored the Hunter Biden laptop story. Calling those things out doesn't even seem crazy. This is how the Washington Post phrased it.

Imagine getting up and going to work in the morning for a company whose new owner is systematically attacking your colleagues to his 84 million followers in public for a site you work for and knowing you might be next. This is the worst case scenario, Twitter employees feared. Yeah, good. They should be afraid. They've been running our public square with their censorious ideology for nearly a decade. The fusion of the censors with their lapdogs and defenders in the press are exactly how we got where we are today. It shows you just how dangerous the machine became. The press sets the tone for what is disinformation. The censors act on that. Then, if you attack the

censors, the press attacks you. It's a fascinating and important lesson, how fused the entire system is. It's exactly why I have many, many reservations about Elon. And look, I don't think that putting your faith in any one person is a good thing, but his purchase of Twitter and making it known it will no longer be business as usual is unambiguously a net positive, at least right now. And watching these people freak out and cry, kick and scream as they lose power over us, that's something we should celebrate. Let the tears flow. Let speech go unhindered because it's going to be a fun few years. And that's the thing, Crystal, the Russiagate one, we've been... And if you want to hear my reaction to S that's the thing, Crystal, the Russiagate one, we've been...

And if you want to hear my reaction to Sager's monologue, become a premium subscriber today at BreakingPoints.com. Joining us now is the executive editor at The American Prospect, the one and only David Dayton. Great to see you, David. Good to be here. First of all, I have to just say that I cannot say enough what great work you guys do over the American Prospect.

We really lean on it in the show. You guys do in-depth analysis that nobody seems to, you know, dig into the numbers the way that you guys do. So I just want to applaud you for the work that you're doing, first and foremost. But second of all, we'll get to the news here. Unexpectedly, this morning, we have a new report that says that the U.S. economy, the GDP, shrank at a 1.4% annual rate in the first quarter. That is according to the Commerce Department. That is its first contraction since early in the pandemic. The news just came out, so I know you're just sorting through it as we are, but what do you make of these numbers? Yeah, I mean, I think the expectation

was for pretty slow growth growth for something around 1%. So this is a surprise to the downside. I think there are a couple factors. Number one, the first quarter we had Omicron, which really at the beginning of the year was a significant lead weight on the economy. And then for the last month, you had the war in Ukraine and what that did to gas prices. And I think overall, you're seeing the effects of inflation on consumer spending. But also, you know, my understanding is that a lot of this has to do with inventory reductions. Can you explain that? Yeah, there's a weird thing about GDP where if you end up having a lot of buildup of inventory,

that kind of counts as part of your gross domestic product because it's sitting there in a warehouse. And if you have less, then it counts less. So sometimes GDP is a little noisy as that goes. And this is also the first advance estimate, and we'll get a more fine-grained understanding of it. And it could change from there. But yeah, sometimes you get these weird swings because of inventory. So the other one here is about exports, David, which also links back to what we were going to be talking about with you. I mean, so why are exports contracting and our trade deficit ballooning? Because that also seems to be a significant part of the reduction here in GDP. Yeah, I mean, it's a good question.

Obviously, as demand has increased for goods, just basic goods, necessities, and durable goods like furniture or washing machines or whatever, you almost can see it like, okay, we don't make any of that stuff. So if the demand increases, the trade deficit is going to increase. People are going to eat the same amount of food. Agriculture is largely our biggest export. So unless people are consuming massive amounts of food, that's going to stay pretty even. But if people are consuming more durable items, just more stuff, that's going to come in from overseas. So that's one way to think about it. So David, you had a great piece kind of evaluating where we are in terms of the supply chain crisis, where we are in terms of, you know, is inflation just continuing to go up and up and up? Are there

any signs of that abating in any sectors? Let's go ahead and put this tear sheet up on the screen. It says supply chains are easing or they're not. Our system is so unstable that we could be seeing endless waves of supply dysfunction with dangerous impacts on the economy. You point to the fact that you've got variables pointing in sort of every direction that enable you to look at this a number of different ways. And you also talk about something called the bullwhip effect, which is what could cause us sort of careening from one problem to another problem back and forth. Can you just break some of that down for us? Yeah, I mean, the bullwhip effect is this sort of standard understanding of supply chains where it takes time from when you order something, if you're a retailer, to it actually getting to you.

And conditions could change in that time period. And that's the bullwhip. It's the time for the whip, the crack, and then move back and straighten out again. So for example, a lot of companies fearing that they're not gonna be able to get all of their supply, but they might be able to get some of it. They overordered or double ordered in the past six months, hoping that they'd get something that they'd have to be able to sell. And by the time they actually start getting that stuff, then the demand has shrunk because of

inflation. And there's now, you've gone from shortage to glut. And there was a sense, especially in the beginning of April, I mean, the GDP number comes out now and we're a month into beyond where the GDP is measuring. So April in particular, you started to see this softening in freight, particularly trucking, where there just weren't as many orders being asked to move goods and things like that. And you're seeing what has been described by some experts as a recession in trucking. And that's because of lower consumer spending, right? But the goods are already on the way by the time we get the lower consumer spending. And so you could end up with this glut from these retailers that have a bunch of inventory they can't sell.

Now, that's like sort of happening on the, you know, it's kind of happening in real time. But the other part of this that cuts against that whole concept is the fact that Shanghai has been locked down for three weeks. And now we're seeing Beijing potentially going into lockdown. Shanghai is more important as manufacturing goes because it's more of a hub. You could see, you know, you have factories that have been shut down for a month. And for basic items, for things that people just ordinarily consume,

that's going to create shortages. And it could create shortages of component parts for manufacturing in other parts of the world. And so the bullwhip is going to whip back, right? I mean, you have this shortage, you went to glut, and now you might go back to shortage. And it's just an indicator of the essential instability of the way that our commerce and logistic systems work right now. higher profit margin trumped any sort of focus on resiliency that would keep us from careening from crisis to crisis to crisis and having such fragility built in, which is really what's been exposed over the past couple of years. David, I'm also wondering, are we seeing impacts from the Federal Reserve hiking interest rates and indicating they're going to do that at, you know, at least the same pace, potentially an even more accelerated pace, and also indicating that they're planning to sell, you know, get unload assets from their balance sheet at a pretty good clip as well.

Are we seeing an impact from that policy play out here, too? I think not direct effects yet because they've only raised a quarter point at this point. There's an expectation of a half point or maybe even a 0.75 point rise in May. But expectations are trending in that direction. And that particularly comes through the channel of mortgages. Mortgage rates are over 5%. And so it costs a lot more to buy a home. And we're starting to see that play out in some softening of housing markets. But to get back to your point, I think there's one very key thing that you can say about the Federal Reserve's intention to increase these interest rates to

break the back of inflation. And that's to ask the question, what are increased interest rates? How are they going to end the lockdown in Shanghai? How are they going to stop the 500 ships that are currently off the coast of Shanghai Harbor? How are they going to shrink that number? They're not. I mean, we have a supply problem and the Fed is targeting demand, essentially, is the issue to me. And I think what we've seen is not only the chaos that can arise from a pandemic, but the fact that we're in kind of a world where there are these threats to supply shocks at every turn. I mean, the war in Ukraine has been a much bigger spur, particularly on food prices, wheat being a very major commodity export out of Ukraine. We've seen that be a much bigger deal, and of course oil,

than what we saw in the two years leading up to the pandemic. Climate issues have been periodically problems for supply. Last year in China, the Yangtze River flooding led to a lot of production delays. A heat wave led, because of the way in which China's energy sector goes, led to shutdowns at factories of electricity for several weeks. And that led to shutdowns. We've seen like freak fires. There was a fire in Japan that reduced a lot of semiconductor capacity. And then there was a fire early this year in Berlin at the factory that makes the machines that make semiconductors. So, I mean, we don't, I mean, we've been able to make the very long intermediated supply chains work, I mean, work to the extent, not really for workers, but at least for cheap prices,

for a long time. But I feel like the threats to this are rising. The hidden risks that this kind of system draws out have risen over the last several years, whether it's through more political unrest, climate and extreme weather events, and now a pandemic. And I think it demands a rethink of this system. I think that we are all living through that in real time. David, thank you so much for breaking it down.

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