Breaking Points with Krystal and Saagar - 5/4/23: CNN Claims Putin Drone False Flag, Another Bank Verge Of Collapse, AOC/Matt Gaetz Team Up Stock Ban, More Bill Gates Epstein Meetings, Biden Debate Push, 10 Year Olds Working McDonalds, 2010's Digital Media Apocalypse, Ben Smith

Episode Date: May 4, 2023

Krystal and Saagar discuss the Drone attacks in Russia and a CNN guest claiming it was a False Flag operation, US preps Ukraine with Nuclear attack sensors, Another Bank "Pac West" on the verge of collapse, Biden may declare Debt Ceiling unconstitutional, AOC and Matt Gaetz team up on a Stock Ban for Congress, Bill Gates caught again with Epstein along other multi millionaires, the Media says "Biden Debate Push' is only coming from the right wing, Krystal looks into a shocking report that 10 year olds were found working at McDonalds, Saagar looks into the Presidential Debate Commission, guest Ben Smith from Semafor comes to talk about his new book "Traffic" as well as the media apocalypse occurring in 2010 digital media.To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/To listen to Breaking Points as a podcast, check them out on Apple and SpotifyApple: https://podcasts.apple.com/us/podcast/breaking-points-with-krystal-and-saagar/id1570045623 Spotify: https://open.spotify.com/show/4Kbsy61zJSzPxNZZ3PKbXl Merch: https://breaking-points.myshopify.com/ Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

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We rely on our premium subs to expand coverage, upgrade the studio, add staff, give you guys the best independent coverage that is possible. If you like what we're all about, it just means the absolute world to have your support. But enough with We have an amazing show for everybody today. What do we have, Crystal? Indeed we do. Lots to get to this morning. We have the latest fallout over that alleged strike on the Kremlin. We'll tell you what we know about all of that. We also have another bank that may be teetering on the brink of failure. This comes as the Fed hikes interest rates yet again, and we face down the debt ceiling deadline. So there's a lot going on in terms of the economy. We also have new details about exactly who Jeffrey Epstein was hanging out with and how often. Larry Summers, I have some questions for you.

And a new effort by our friends over at Media Matters to paint wanting debates as being right wing. You're going to love this one. You're going to love this one. Also excited to talk to you, Ben Smith. In the show, he has a new book out. And he's talking about, you know, he was with BuzzFeed. BuzzFeed obviously is going under. He was part of that whole 2010s media buildup.

Very insightful guy. He's got his own new media company now. So I want to hear from him about the failures there, lessons learned, how we can keep from, you know, any cautionary tales that we should learn from there. That's right. Before we get to that, I want to say once again, just thank you to everybody who's been signing up for the premium subscription, who's been helping us out, building out the new studio, paying for the new lights. We just got some exciting news, some big technological developments that we'll be able to debut to all of you. And it does just mean the world to all of building out the new studio, paying for the new lights. We just got some exciting news, some big technological developments that we'll be able to debut to all of you.

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We build everything by blocks, not like some of these other idiot media companies, which we will be talking to Ben Smith about. Yes, indeed. All right, let's start off with Ukraine. So obviously, Emily and Ryan did a great job yesterday of talking about what was going on in the alleged attack on the Kremlin, potentially an assassination attempt, that's what the Russians are claiming, by the Ukrainian intelligence services on Vladimir Putin's life.

Well, in terms of what we know about the both reaction by the Russians and then the initial denials by the Ukrainians, here's what we have so far. President Zelensky of Ukraine was actually in Finland when the attack happened, and he addressed the allegation on camera in English. Here's what our villages and cities. We don't have enough weapons for this. That's why we don't use it anywhere. For us, that is the deficit. We can't spend it. And we didn't attack Putin. We leave it to tribunal. Just gonna say, I would say it begs belief just because, and we'll get into this in a little bit about the way that they are specifically phrasing their denials. But I think it's also just worth, for anybody who's just joining us and hasn't seen the video, this is some crazy video in downtown Moscow. Let's go and put this up there on the screen. I mean, what we are watching here is this, you know, this is the heart of power inside of Russia. And you can see a drone very

clearly coming and striking the flag, which is on top of the domed building there. And actually, whenever there's some zoomed out photos and video of this crystal, you literally watch the drone fly past the Kremlin, the entire seat of power and all legitimacy of authority in Russia before exploding on top of the flag. The Russians claimed that anti-aircraft was used to blow up other drones that were in the area. There's, again, the circumstances around all of this are unclear. I want to go back to, though, the initial denial, the denial now by the Ukrainian regime. Let's go and put this up there on the screen. And this was a screenshot that was flagged by our producer. Following the news, the actual chief of staff to President Zelensky actually posted three fire emojis on his Telegram

channel without any commentary, but then deleted the post shortly afterwards. Deleting the post is almost more of a tell than anything. Deleting the post is a little bit of a tell, I would say. And the other reason that I think it's so important to think about all of this is that if you read the detailed response, not just by Zelensky, but by the chief foreign policy advisor to Ukraine, who actually put out a tweet in English, he said something which calls into question the entirety of the statement. He said, Crystal, we have never used drones or perpetrated any attack on Russian soil. That's why even pro-Ukrainian accounts who I follow, people like Michael Weiss and others,

are saying this is ridiculous. They're like the idea that the Ukrainian intelligence services have not carried out both assassination campaigns and even air attacks on Russian soil is ludicrous. You know why it's ludicrous? We even know from the leaked set of Pentagon documents that they not only have done so, but want to do so with long-range weapons. So there's a lot, if you parse the language, you know, Zelensky, funnily enough, is saying, oh, we don't have the weapons. First of all, you have the weapons. Second, you actually want more so you can do even more of this. And

third, the idea that the Ukrainian intelligence services have not carried out multiple attacks on Russian soil throughout the course of this war is just a lie absolutely on its face. Even the most pro-Ukrainian accounts will tell you that. Now, does any of this war is just a lie absolutely on its face. Even the most pro-Ukrainian accounts will tell you that. Now, does any of this mean that they are directly responsible? Who knows? Is it a genuine who knows moment? Is it technically possible the Russians could have carried out a false flag? Maybe. I mean, let's think about it a little bit. But first, though, I think we should note that the people who are the most pro-Ukraine here in Washington all want to call it a first flag, because I think by saying that, they are implicitly acknowledging this is a dangerous escalation.

One of those is the former CIA director, Leon Panetta. Here's what he had to say. And former CIA director, under President Obama, Leon Panetta. Secretary Panetta, sources tell CNN that U.S. officials had no warning that an attack like this was coming and that the Ukrainians assure them privately they had nothing to do with it. What's your take? Jake, this really does smell like a false flag operation on the part of the Russians, a diversion, if you will. So false flag, they said it's a diversion. I mean, again, look, anything is possible, but I think we should consider a couple of things. I'm curious what you think, Crystal. Number one is this. It's humiliating to have a drone. It's like the Chinese balloon thing,

but for the Russians. You have a nation that you are at war with that is able to penetrate your most innermost defenses and strike at the seat of power in Moscow. I mean, that's humiliating. That would be like if somebody blew up the statue on top of the Capitol building. That's insane. Think about what that response would look like and the questions it would call to the actual like command and control of the Russian regime. Second, you know, okay, everyone's saying it's a false flag and all that, but we also, again, as I've laid out, Ukrainian intelligence services have long both wanted the weapons to carry out attacks like this, have, you know, justified this and also are, you know,

we're obviously gleeful as we initially showed you in that. So I just think much of the false flag discourse is centered around the fact that the true here's the basic truth. Whatever you think, this is definitely ratcheting things up a notch. Well, and whatever you think, it's definitely in the realm of possibility. I mean, even the biggest Ukraine stands who want to believe Panetta that, oh, that has all the hallmarks of Russian disinformation and a false flag in the infamous words used to dismiss the Hunter Biden laptop story. Even if you want to believe that, you have to acknowledge the Ukrainians have done some crazy crap already and they've done it on Russian soil. And you also have to acknowledge, yeah, the Russians are liars. So are the Ukrainians. I mean, we know this. And look, heat of battle,

heat of war. I get it. OK, maybe you can make some excuses for them. But you cannot rely on the word of Zelensky whether or not anyone in the Ukrainian state, Ukrainian Rotary Club or whatever, had to do with this attack. I think your point about, you know, it's hard to imagine that this would be the type of false flag that they would want to stage, given that also throughout this war, it's really been Putin's, Putin has really attempted to sort of protect the population from the fallout of the war and not make it feel like this is on their soil and this is coming for them directly in order to try to maintain support for the war effort. So, you know, it flies in the face of that as well. But just think about it. I mean, we had,, very, very likely that Ukrainians were involved in two separate assassinations on

Russian soil with pro-Russian war bloggers, effectively. We know that they, you know, were very likely involved in the Crimean Bridge. We still don't really know exactly what happened with Nord Stream. They may have been involved, may have been U.S. on our own, et cetera. But it's not crazy to think that they were involved in blowing that up as well. We know from the leaked documents that they were very interested in obtaining long-range missiles from us so that they could strike further onto Russian soil. So to act like, oh, there's no way this could be them, I think that that is incredibly, incredibly naive. I think it is willfully blind. And it frankly irritates me that the media is not more clear about these things,

because you have so much of the population that they just see Zelensky as a hero and they just dismiss it out of hand of there's no way possible that he could have done this. Think about the incentive that they have here, too, which is something that we have always flagged as a real danger. It is in the Ukrainians' interest to have an escalation that would draw us directly into the conflict. So when we look at something like this and we're like, this is insane. You're trying to potentially assassinate the leader of a nuclear armed superpower? Like, what in the world are you up to? But their calculus is very different.

Their interests are not, in this way, actually aligned with us. They would like to see some sort of escalation that forces our hand and draws us directly into this war, because, frankly, that is the only way that they would outright win. So that has always been there. But I just really want to urge people to think about how much fire we are playing with here. Because even if you submit, there was like a 1% chance that this was the Ukrainians. These are our partners and allies. They did not warn us probably in advance that they were going to do this. We have no control over them. And we also know from the leaked documents and from a lot of other reporting, we have less insight in some ways into what the Ukrainians are up to because we don't have these deep intelligence networks that

we've been working on for decades with regard to Ukrainians and they don't let us in on what they're up to. We have less insight into their operations in some ways than the Russians. So we are playing with fire. This is an insane situation. And it just reminds me again, whatever we can do to get this conflict to an end is incredibly critical. This is the issue. You know, the NAFO people who are out there are all like, well, the Moscow has tried to assassinate Zelensky. Who's defending Moscow? Okay. Right. If the Ukraine, listen, here's my general take on the matter. People dismiss any concern of ours as some sort of condemnation

on Ukraine. Now, here's the deal. If Ukraine wants to put itself in a position to risk its annihilation, they are free to do that. But then, should said risk happen. They should bear 100 percent of the risk and of the possibility without any of the escalation coming back on us. And that's part of why I'm so annoyed by the discourse around this. Nobody's saying that Ukraine is, quote, unquote, not justified or doesn't have the right to retaliate. You can do whatever you want, but whatever you want, you should keep us out of it. And that's the problem, which is that they don't seem to understand we are tied at the hip. Not by my choice, I can tell you that. But by the choice, though, of the president of the United States, of NATO, and the entire Western alliance, it seems to have lost their minds. And they seem to think that,

you know, we are going to rise and fall with whatever happens to Ukraine. And if that's the case, then, then, of course, as you said, Ukraine is of their fate and what happens to them is now directly tied to us. And so we should have some say in the matter. When you're dealing with nukes, what's going on here is tied to everyone on the planet. I mean, even if we weren't so directly involved and basically proxy, you know,

fighters alongside of the Ukrainians with, by the way, some limited number of boots on the ground and providing a lot of intelligence to help them with their targeting and all of those things. And of course, the money and the weapons and all that we have sent over there. Even if that wasn't the case, every single person on the planet should be concerned about what's going on here. Sure. And then also, this is another important thing. And by the way, this is coming from Bellingcat, which is definitely one of definitely more of a pro-Ukrainian group, I think it would be fair to say. Put this up there on the screen. They are acknowledging that there are apparent Ukrainian attacks within Russia and Russian-controlled territory

over the last four days, all using drones. There was a drone attack on a huge fuel storage facility in Crimea. There was a drone attack on an oil depot near the Kerch Bridge. There was two major train derailments in a region inside of this territory. And there also now was the drone attack at the Kremlin. Lots of people kept saying, oh, well, this is an isolated incident.

No, it was part of a concerted Ukrainian drone campaign against targets inside of Russia. Now, once again, they can do what they would like, but if they get retaliated against and they get a city wiped out or something like that, well, then that's on them because that's what war looks like. And then the idea that we should get drawn into it even more, which is what a lot of people here in Washington want, I think is very problematic. For me, the fact that so many people want to call it a false flag is the tell in and of itself. Because they have, because by doing that, they can push responsibility off the Ukrainians.

Because if we all acknowledge that it is, look, let's just say it's probably almost certainly, it was the Ukrainian regime. Well, then they have to acknowledge then that they've done something incredibly risky. I also want you to think about, you know, with Panetta there on with Jake Tapper. Now, if you ever had anyone with a critical view as we do or a skeptical view as we do go on and say, you know, this really looks like a Ukrainian attack. Oh, they'd be up at arms. There's no way you could just say that without Tapper jumping in and pressing, which you know what? He should, right? But you got to do it on the other side too. And Panetta is just allowed to float this with no backing, no evidence, no nothing, just because he wants it to be true. And no pushback from the media.

This becomes the accepted narrative. Also, to linger on that tweet that we put up earlier showing the various drone attacks in and around Russia from Ukrainians, that also really undermines Zelensky's claim that, oh, we don't even have the weapons. That's what I'm saying. So if your statement of denial really doesn't hold up to scrutiny, that should cause people to have a lot of question marks about what else you're presenting here and whether it is, in fact, accurate or not. Again, let me just say, if you are more inclined than we are to believe Zelensky's denials and believe this was a potential false flag, please acknowledge there is at least a chance that this was the Ukrainians. And if there's even a chance that they are freelancing and engaging in this type of incredibly reckless actions, that should change your whole way that you're thinking about this war. Yeah, absolutely.

All right, let's go to the next part here about, yeah, how are the Russians taking this? Turns out, not well. Let's go ahead and put this up there on the screen. Dmitry Medvedev, the former president of Russia, says, after the attack on the Kremlin, there is a need to now, quote, physically eliminate Zelensky. He says, after today's terrorist attack, there are no options left other than the physical elimination of Zelensky and his clique. He is not even needed to sign the act of unconditional capitulation. Hitler, as you know, did not sign it either. There will always be some kind of changer like this. It's President Admiral Donitz wrote Medvedev in his Telegram channel. By the way, Medvedev, remember, was supposed to be the reasonable one whenever Putin was out. Now, look, he's basically lost it in terms of his rhetoric now for quite some time.

But really, his designs and his rhetoric and all that are aimed not just at Zelensky. They're really aimed at us, just to show you what the temperature is inside of the Moscow elite. Let's go to the next one here up on the screen. The Speaker of the Duma, you know, basically the Russian Congress,

says that Russia should use, quote, weapons to destroy the Kiev regime. As Samuel Romani here says, aside from nukes, what are said weapons? Exactly right, which is, you know, what exactly is on the table. Now listen, nuclear saber rattling has long been part of the Russian rhetorical campaign. Obviously, they can credibly back it up because they have more nukes than everybody else on the planet. But you should also pair it with some recent news, which was passed off as some sort of secondary thing, but is pretty alarming. Let's put this up there on the screen. The Federal Nuclear National Security Administration here in the U.S. is now setting up an advanced network across Ukraine with radiation sensors to detect a nuclear blast that could verify an attacker's identity. Again,

this is U.S. taxpayer dollars and a U.S. agency that is now wiring up Ukraine with the same sensors and unit of atomic experts that are monitoring all of this equipment with the same sensors and unit of atomic experts that are monitoring all of this equipment with the same radiation sensors that we have here at home. Now, we don't know all their allies that have said sensors and have the same network, but I do think at the very least, it seems important to say you don't do this unless you think that the chance is greater than 1%. And as all policymakers have always made around nuclear policy, the policy of 1%, because the risk is so catastrophic that you have to take it and treat it almost as if it's on the table as 50-50. Yeah. Yeah, I think that's right. And this is in direct contrast to we've been receiving assurances in the media and from administration officials for a while now of like, oh, we don't think that's going to happen. We don't think there's going to be any nuclear deployment. There was some increased concern that there is some level of significant risk that Putin does introduce nukes into this conflict.

I don't have to tell you how terrifying that potential scenario is. They also talk in this article about how they fear a potential reactor threat scenario. They have a nuclear power expert who says that Russia, if it suffered a humiliating defeat and withdrew from Ukraine, might retaliate by firing on a reactor. It spent fuel storage areas in order to release high radioactivity into the environment. That's one of the biggest dangers. This Dr. Lyman, his name said, if they wanted to render as much of the countryside as they could uninhabitable, those reactors might become targets. So that's another potential threat that they're monitoring here as well. It's also interesting the way they talked about this agency outfit group within the energy department that they describe as a shadowy unit of atomic experts that apparently

they didn't even want to acknowledge the existence of until very recently. So anyway, there's that too. Yeah, great. And by the way, what's happening on top of all of that after the attack? Put this up there on the screen. The U.S. is sending Ukraine $300 million more in additional military aid, including an enormous amount of artillery rounds, howitzers, air to ground rockets, ammunition as the launch of the spring offensive against the Russian forces approaches. The new package also includes Hydra-70 rockets, unguided rockets that are fired from an aircraft. It includes an undisclosed number of rockets for HIMARS, mortars, howitzer rounds, missiles, anti-tank rifles. The weapons all will be pulled

from existing Pentagon stocks stocks so that can go quickly to the front line in case you're wondering uh where it's all coming from which is our own stocks of military resources of which we are going to probably take a decade to have to replace i encourage everybody to go read you know i might probably do a monologue on this soon the level of how much this is exposed how hollow and useless our defense industrial complex is. For all of the talk of the military industrial complex, I always try and emphasize this point. They're not even good at what they do.

We have like one plant that produces weapons. And then we just had a fire. A clean amount of money. Yeah, and you're like, what are we paying for? We pay the size of the GDP of small African nations on a yearly basis, and we don't even have enough weapons to send to a measly country like Ukraine,

let alone defend the United States of America. That's a whole other subject for another time. The point is though, is that it is a zero sum game and we are not, basically we don't have resources that we necessarily could need. And I think also at this point, we should all acknowledge the coming Ukrainian spring offensive. It's happening at some point. We don't know when. It could happen literally today. It could have already begun with the drone campaign. It could happen in a week. America doesn't even know. Our own intelligence services don't know. Zelensky doesn't want to tell us, apparently. I mean, I guess in some way you can sympathize. He's like,

well, you know, we didn't even know about these leaked documents. Like, why should we tell you anything? It's just going to end up in the press. No, I don't blame him. I blame us. Yeah, right. Right? I mean, we have a lot of strategic leverage here that we could be using if it was important to us to know what the hell they were up to.

But, you know, apparently it's not that important to our leaders. And the piece you're pointing out, Sagar, with regards to the military industrial complex, this is why actually some of the voices of restraint have come from the Pentagon. I mean, think about General Milley because they're very aware of what this does to our own readiness and preparedness. The last thing I want to say with regard to the Russian response here is, listen, if Putin was killed, died, assassinated, whatever, it's not like we would be shedding tears here. However, I think we have a realistic understanding and no one needs to confuse themselves about the fact that it's not going to be doves that come to power in the wake of that death. The ascendant voices within Russia are harder line, if anything, than Putin. They are more pro-war. They are more aggressive, more brutal. And I know you may think that that's not possible, but believe me, it is. So don't think that if Putin was gone or taken out

that this would be an improvement in the situation. It could actually make things much worse. And, you know, as we've said before, the biggest risk in terms of nuclear usage deployment is if Russia is truly desperate, truly backed into a corner. And I think that this incident, whether you think it's, you know, most likely that it was the Ukrainians or only possible that it was the Ukrainians, it should really bring home to you the grave risks that are attendant to continuing this conflict and allowing it to go on as we have. Yeah. I mean, we just read that thing about Medvedev. Like that's the moderate guy, you know, inside of Russia or the do must be. These are established politicians who are the

real alternatives to Putin. People always, I've always heard that with the Chinese Communist Party too. They're like, who knows what the hell would come next? You have no idea. Like that level of authoritarianism could actually look like child's play compared to what some facets within the party or the military or whatever do desire. Not everybody is like us in our system. That's a lesson that I think a lot of people should remember. Let's go ahead to the next one with the economy. Yeah, so we've got kind of a lightning round of big economic news that is all coming together this week that should similarly make you pretty nervous. So we told you earlier this week on Monday we have the second largest bank failure in history. And now it looks like we've got yet another bank.

This would be the fourth one in just a few months that is teetering on the brink. Let's put this up on the screen from CNBC. We're talking about PacWest here. This is a report from yesterday. Their shares fell more than 50 percent after hours on a report that the bank is considering, quote, strategic options. That means, again, it is teetering on the brink. I'll read you a little bit of this report. The regional bank is assessing options, including a possible sale, bringing in advisors to evaluate longer-term plans for the business, according to one person familiar with the matter. They later confirmed they were still in discussions with multiple potential investors and partners. The company will continue to evaluate all options to maximize shareholder value. And all regional bank shares have basically been hit hard recently after the

collapse of Silicon Valley Bank, and PacWest has not been immune to that. Just to give you a sense of the size of this, this is an LA-based bank that has a roughly $750 million market cap, so it's no small potatoes. And it's down by 72 percent this year through Wednesday. So has just been battered. Now, I will tell you this morning what they're saying. The folks at PacWest is that core deposits have actually increased since March, according to them, in the wake of the Silicon Valley bank collapse. Because that's been a major issue for some of these regional banks is depositors have fled to the big boys like JPMorgan Chase. But they say that hasn't been the case for them.

They did confirm they're in talks with several potential investors seeking to calm markets after a 60 percent stock route that made it the new focal point of concern over the health of U.S. regional lenders. So earlier in the week, the message that was coming out from everyone was like, these are just one-off situations. There's no contagion. I think this shows you that there is a lot more fragility throughout the sector than maybe they want to admit. Yeah, they're really not telling us the full thing of what's going on. I actually read with interest a tweet by Bill Ackman, the billionaire investor. I mean, look, he's talking about the financial system. So maybe he's talking about something he's talking about. I actually thought it was worth reading.

He says that the regional banking system is at risk. SVB depositors' bad weekend woke up uninsured depositors everywhere. The rapid rise in rates impaired assets and drained deposits, zeroing out shareholders and bondholders massively increases banks' cost of capital. The FDIC's failure to update and expand insurance regime is hammering more nails in the coffin. First Republic Bank would not have failed if the FDIC had temporarily guaranteed deposits with a new guarantee regime was created. Instead, we are watching dominoes fall as great systemic and economic costs. Banking is all a confidence game. At this rate, no regional bank

can survive bad news or bad data as a stock price plunge will inevitably follow. Insured and uninsured deposits are withdrawn and, quote, pursuing strategic alternatives just means an FDI shutdown over the coming weekend. There is no incentive to bid until Sunday after the failure. So, look, he's talking there. He wants a better insurance regime, which I do think probably should be on the table. Just one that doesn't, you know, come at the cost of increasing our fees. But I thought it was actually well said in terms of how the game is structured around how these weaker regional banks, you're dead in the water now at this point. You know, all it really takes is because confidence is so shaken at this point for these regionals, it only takes one piece of bad news that you might have been able to weather in the past and you can just collapse overnight.

That's right. And the reason why this bank in particular is vulnerable is because of where it's located and what its client base is. So similar depositor base as we saw with First Republic, as we saw with Silicon Valley Bank. And so that's why investors and others are looking at this one going, are you all going to be OK? This does not look particularly good. So I think the FDIC point is really important. We covered earlier in the week how they just put out a report of their recommendations of how to change the deposit insurance system. I think that's important. I think it's important we deal with that quickly so that at the very least there is some certainty

because that's one of the things that was so unnerving after the response to Silicon Valley Bank is we were, you know, reporters were asking questions of Janet Yellen and others like, okay, so does this mean that effectively all deposits are insured in the entire system? And like, what does that mean in terms of who's backstopping that and how's that going to all work out? And they really hedged, you know, she gave a different answer than Jerome Powell gave. It seemed like they were not on the same page whatsoever. So if anything, whatever the ultimate regime is going to be, they need to figure it out. They need to make it really clear. And two, by the way, they got to stick to it as well. You can't have it then be loosey goosey and, all right, we're going to take it on a case by

case basis because then you end up with, you know, you end up with a lot of moral hazard. You end up with some people being treated, usually, you know, wealthy depositors being treated in a way that is kind of unfair. So anyway, that's incredibly important. The other piece of this that Ackman is very obvious to a lot of folks is part of what has pushed these banks off the cliff has been the Fed's program of aggressive interest rate hikes. And let's put this next piece up on the screen. They have decided they are going to continue in that direction. They just increased rates another quarter point. But they did signal a potential end to the hikes. I think it is a major question mark where things go from here,

whether they continue the interest rate hikes or whether they press pause. Powell made it very clear they have no intention of cutting rates at this point. This was a widely expected decision. Nevertheless, this pushes the Fed funds rate to the highest level since August of 2007. So it gives you a sense of how extraordinary this path of interest rate hikes has been. Just to give you a little bit of the Fed speak here of how they altered this particular statement versus the last one that is making people feel like, OK, this might be the end of the rate hikes, at least for a while. They omitted a sentence that was present in their March comments saying that, quote, the committee anticipates that some additional policy firming may be appropriate for the Fed to achieve its 2% inflation goal. So they took that line out. People took that as all of these statements, just so you know, are really carefully worded and parsed, et cetera.

So they were taking that removal of that statement as significant and an indicator that perhaps this might be the last rate hike. This decision to hike rates by a quarter point was unanimous, which is also really noteworthy. The post-meeting statement also noted that tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. Now, they did have something similar to that language in the March statement as well. But basically, you could look at this as them saying, you know, we don't

potentially we don't need to hike rates anymore because we already have this gigantic weight on the economy that is probably going to pull inflation down. And, you know, they they have been warning as well. even the Fed's own economists have been warning that we are likely to see some sort of a recession due to these rate hikes and the banking issues that have resulted. It's really important. Let's go ahead and put this next one up there on the screen too, just to hammer home like why it all matters for you, which is this massively increases all of the interest rates on credit cards. Currently, the credit card interest rate average is 20% as of April 26th.

That is up from 16% just March of last year. Car loans currently are at one of the highest levels in modern history. The average interest right now on a car loan is 7% in March. That's at least one point from just six months earlier and obviously a lot more than where things were just a couple of years ago. Student loan rates, obviously variable student

loan rates. It's killing a lot of people. Currently, borrows with a federal undergraduate loan dispersed after July 1 are now paying 5% interest. A year earlier, it was at 3.7. Obviously, even one point on that is thousands of dollars on the average balance for people. And then mortgage is one where it really is just murdering people. So actually, I'm looking at a graph from Politico that just came out this morning. The average monthly mortgage payment for a typical US home has grown 50% since January 31st, 2022. Currently, as it stands, a home with a 5% down payment and a 30 fixed year rate is at $2,237. In January of 2022, it was $1,500. So, I mean, that's a ton of money. That's almost, what, $24,000 extra per year with the vast majority of it going to interest, so you're

not even touching your principal. Now, personally, I don't even think 5% down is pretty risky just in general in terms of putting stuff down, but we got to be real about where things are with our current financial picture for most Americans. And you're just getting the rawest deal because the real estate market has basically gone flat. It hasn't gone down. Some places it's gone down, but instead of growing 13% or whatever year over year, it just hasn't grown by any percent. But that doesn't mean that the price isn't still crazy out of reach and you have a 50% increase in your overall mortgage payment. You're paying a ton more money for basically the same house.

And the crash that everybody wanted, it just didn't happen. And the reason it didn't happen is because basic supply and demand. We just don't have enough housing for people who want to buy a house. Ergo, the price is sky high. Yeah, and when rates are high,

that means that there's a disincentive also to build additional housing stock. Which is a huge problem. So, I mean, especially in a nation that has as much debt as we do, the fact credit card interest rates are up, new car loan rates are up, student loan debt rates are up, I mean, mortgage rates obviously up, all of these pieces really adds up to an affordability crisis across America. And then you add to that the fact that inflation has slowed somewhat,

but is still a significant problem. I also just want to underscore something that I talked about in my monologue earlier this week, which is that the commercial real estate market is something we really have to keep our eyes on in terms of bank and economic stability, because you have a few things coming together. Number one, people are not working in the office the way that they used to, not anywhere close, and it's not going back. So anybody who is in or around a metro area, we certainly see it here in D.C., these downtowns are totally different. And there's been a lot of ideas, okay, we should convert this office space to residential space to deal with the housing issue. It's not that simple.

It's hard to convert them. There's zoning issues. There's all kinds of challenges there. So it's not easy to do that. Meanwhile, half of the multi-trillion dollar market, half of that debt comes due in just the next two years. And guess what? It's banks like PacWest. I don't know specifically what their balance sheet is, so I'm not speaking specifically to them. But that type of regional mid-sized bank, they are the ones that overwhelmingly hold this type of debt. And just as your mortgage rate, if you're going to try to buy a house, is going up, their rates in the commercial real estate market have also gone up significantly, while the value of those properties is getting crushed because there just isn't the

demand for office space that there used to be. So I think that is a huge cloud looming over the market, something Charlie Munger was warning about that I really want to keep our eyes on. And that is obviously tied into what the Fed decides to do here as well. Now, there's another piece here that I want to point to. We're supposed to get the sort of big jobs report that everybody really pays close attention to on Friday. So we'll keep our eyes out for that. In the meantime, we got the ADP jobs report. Let's put this up on the

screen from CNBC. That report showed that private payroll surged by 296,000 in April. Now that's a lot higher than expected. I do want to warn frequently, especially in recent months, for whatever reason, after the fact, these estimates have gotten consistently revised down. So it may not be as good as it looks. But the reason this is significant is on the one hand, you're like, OK, well, that's great. If more people are getting hired and there's this huge job growth, that's great for workers, you know, creates tight labor market, makes it so that they can be choosier, they can demand higher wages, et cetera, et cetera. But the thing that cuts against that is as the Fed is in this place where they have a giant question mark about what they're going to do next, things like this, they look at as like, oh, well, we got to keep hiking rates and

trying to crush the economy because clearly we haven't crushed workers enough. So it sort of cuts in both directions. Yeah, the economy thing is just really difficult because, you know, even if you look at the unemployment rate, the unemployment rate is basically fake because we have more job openings than we have actual people who are in the job market. And that's part of the problem, which is that we have, what, 7 to 10 million prime age males who are just like literally not working. That's a societal problem. That's not an economic problem. And it's one of those where you have no idea how to fix it. The vast majority of these people are either playing video games on drugs, who are basically dropped out of society and are not, they don't have no interest in participating in civic life or economic life. And again, like you can't just,

I don't know, you can't interest rate cut or hike your way out of that. That's a way bigger whole of government societal approach. I've been thinking about it a lot too, just because I think we keep trying to solve things with these blunt instruments when actually we have much more downstream factors, which materialize in crazy things like housing prices and all this other stuff. Although remember, we looked at that report that said most of the decrease in labor market participation was actually people who were going from like working full-time plus to scaling back their hours. So it wasn't as much people who were pulling out of the workforce altogether. It was more people who had had a

reassessment during COVID and were like, you know what? My whole life is not my job. So that's definitely part of it. I'm talking about people who literally don't participate in the labor force at all. So this is a reduction in the labor force participation rate. But I'm saying like, even in terms of the people who count to the rate specifically, they don't because they're not even seeking work. And yeah, I mean, look, that's a whole other thing that we've probably done quite a bit of work on. But I do think it is something we always have to think about whenever it comes to the way that we look at these statistics. And the White House is like, oh, we have a 3% unemployment rate. It's like, that's just, it doesn't even touch what is really going on. It's always, that's always a misleading statistic. There's a lot more going on there. The last piece about this jobs report that

I think it's important to note is something else that we've been trying to highlight, which is that how the economy is doing, it's very uneven. It's very strange because obviously, I mean, the tech sector, advertising rates, any media, these industries are getting crushed. And in fact, if you look within this jobs report, you have leisure and hospitality doing great, gain of 154,000, education and health services, 69,000 add, construction actually 53,000 jobs added. Other sectors posting solid increases were natural resources and mining, trade, transportation, and utilities. But there were a couple sectors that are actually losing jobs right now. One is the financial sector because of these deposit runs and bank failures,

et cetera, et cetera, lost 28,000 jobs for the month. Manufacturing also took a hit. That's really noteworthy, down 38,000 jobs, and it has been in contraction for the past six months. This in spite of the fact that the Biden administration has made some efforts to try to reshore, and certainly Biden would like to see manufacturing growth. So the fact that that sector continues to shed jobs, I think is worth noting. All right, let's get to this piece about what the hell is going to happen with the debt ceiling. Just to remind you, we are rapidly approaching the deadline. It's looking like early June when we would no longer be able to engage in what they call extraordinary measures to keep from defaulting on any of our congressionally approved obligations. So Democrats are trying

to figure out what their plan is. Biden had long been saying, we're not going to negotiate. We want a clean debt ceiling increase. That's that. But after McCarthy was able to get the Republican House caucus to coalesce around a package that they were able to narrowly pass through the House, Biden blinked. He did decide to meet with congressional leaders, including McCarthy and McConnell. So here's another piece of what Democrats are trying to float to deal with this whole situation. Put this up on the screen. The headline here is Democrats unveil plan to bypass McCarthy on debt ceiling increase. I think that's a little bit misleading of a headline just because I don't think this plan is actually going to work and they make it sound like it could. But the idea here is a discharge petition through the House that would force a vote on a clean debt ceiling

increase. In order to successfully use a discharge petition, you have to get a majority of members to say yes to bringing a vote to the floor. That means they would need a few Republicans to go along with them. And that seems, at this point, very unlikely. They say House Minority Leader Hakeem Jeffries in a dear colleague letter on Tuesday wrote the Democrats plan to file that discharge petition, which if signed by 218 House members would force a vote on a clean debt ceiling increase. So far, Republicans, even they interviewed some of

the more sort of like moderate ones, they're all saying no. It would require signatures of five House Republicans to force a vote. Don Bacon, who's one of those moderates, told Axios, Leader Jeffries refuses to negotiate. That's not how it works in a divided government. We have to govern, which means we must find some agreement. We must negotiate. Another moderate Republican speaking on the condition of anonymity told Axios, I don't support a discharge petition.

Biden has been doing a horrible job of outreach to moderates. They won't get that through, said another House Republican. So, you know, this is an attempt by Democrats to put some pressure on McCarthy and show that they have some sort of a path to a clean debt ceiling increase. But it looks to me unlikely to work. It's unlikely, but it's one of those where it's like a pull the ripcord situation like a reserve shoot where at the very last moment if five people were willing to sign on they could just sign on to it

it would discharge it, come to the floor, they could amend it they could pass it, then it would be a question of whether the Senate would be. So I don't think it is in any way something that's going to happen immediately but I wouldn't even call it a plan B, I'd call it plan E. Yeah.

You know, for the very, very last days of what it might be. Well, it's like if there was some like major economic fallout. Yeah, exactly. And the moderates started getting freaked out because these are, they do in the Republican caucus now, you know, they have a number of members. We always point to the New York congressional delegation that won in seats where Joe Biden also won. They feel a lot of pressure in terms of the reelect, and they do not want to be saddled with responsibility for some sort of

calamitous debt ceiling situation. So you could see if there was some major repercussions, or for those that are particularly tied in with Wall Street, if there starts to be major market repercussions and their Wall Street donors start freaking out, then you might see potentially five Republicans being like, all right, let me get on board with this discharge petition. There is another way, though, potentially. And we've talked before about minting the coin and some of the other workarounds. There's a New York Times report that Biden aides are actually debating whether the debt ceiling is constitutional. This is a fun one, actually. This is interesting.

Yeah. So let me tell you, this is based on the 14th Amendment Clause, which states that, quote, the validity of the public debt of the United States authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. There are some legal analysts, not like weird kooks, but some serious people who look at this and are like, that means that basically the debt ceiling is not constitutional. And when you have these two conflicting instructions coming from Congress, one of them is, hey,

spend this money and it's obligated and we've created these debts and obligations. And the other one is, don't do what you need to do to make sure to pay these things that we told you to pay. That, you know, the 14th Amendment basically comes in and says you got to honor the obligations that you've made. So they say in terms of how this would go, what the economic fallout would be, let me quote, they say there's a broad consensus on both sides that the move risks roiling financial markets. It's likely to cause a surge in short-term borrowing costs because investors would demand a premium to buy debt that could be invalidated by a court. Moody's analytics economist, Mark Zandi, modeled a situation. What he believes would happen is there would be short-term economic damage as people freaked out and this worked its way through the court system. But there would be long-term gains if the courts upheld that

constitutional interpretation because you would then remove the threat of future brinksmanship over the limit. Quote, the extraordinary uncertainty created by the constitutional crisis leads to a sell-off in financial markets until the Supreme Court rules, but the economy avoids a recession and quickly rebounds. So do I think it is likely that this direction is going to be pursued where the White House just decides this debt ceiling is unconstitutional? We are not going to abide by it. And, you know, it works its way through the court system. Do I think they even take that approach? No, I think it's unlikely because Biden's such an institutionalist. Jeff Stein had done previous reporting about

discussions behind the scenes, and they had sort of dismissed out of hand all of the potential workarounds. But at least somebody in the administration is considering this option. So if anybody wants to know the history behind it, it's kind of interesting. The reason why the radical Reconstructionists in Congress added this to the 14th Amendment is because they were afraid that former Confederate states when they were readmitted would gain political power and would repudiate previous federal debts to guarantee instead Confederate debt incurred during the war to back their so basically they would say well They would repudiate like Union debts in order to try and pay off Confederate debt.

So what they did is they added this in saying that the clause would make sure that they would guarantee all of the debts that were incurred try and guarantee debt, you know, to some official or whatever who had not been, what was the term? I forget. Reconciliated or whatever. Yeah. At the time, they had to, like, swear an oath to the Constitution. That's where the bounties for services in suppressing insurrection are rebellion. Right. That language comes from.

Anyway, fun history lesson. It's kind of interesting just to think about how all that played out and how it may now interact with the debt ceiling. And the debt ceiling is interesting. I remember talking about this in 2011 because on the one hand, you have the House of Representatives, which is supposed to appropriate all money, which they have done here technically. But then the debt ceiling itself was not really even in question up until the 2010s with the Tea Party era. Then all of these legal interpretations. The big problem too, though, with this plan is it does have to survive the Supreme Court. You can't just do whatever you want. So even if you agree and you have some legal authors or theories or whatever, it would still get challenged, no question, by the Speaker of the House.

He would just sue the president. And given that we have a conservative Supreme Court, I don't really think this one is on the table. Of all of the unilateral options, I think mint the coin has the best choice. But as Jeff laid out in his piece, that one is not a guarantee either in terms of the legalistic framework, the Federal Reserve and their acceptance of the coin, the way that Congress and all of that would have it. The easiest way is just freaking past the debt ceiling, but that's probably not going to happen.

I mean, I am in favor of them trying any or all of these workarounds because I think this, having every few years, like this manufactured genuine crisis occur. I think this is an insane way to run a country. And yeah, if you want to fight over what the spending should be, et cetera, you fight it when you're appropriating the money, not after you've already said, we're going to pay X and Y and Z, and then you're not willing to lift the debt ceiling. Like this weird technicality that we have as like an accident of history that they have to go through with. And you're going to use that to hold the entire country hostage. I think it's terrible. I think it's insane that we have this situation. So I am in favor of, even if there is some risk involved, trying to engage in one of these workarounds.

But I think you're right in terms of the Supreme Court. Unfortunately, if the makeup of the court was different, perhaps there might be more appetite for pursuing one of these workarounds. But I also just am fundamentally skeptical that Biden would do anything that's outside of the norms and outside of the box because he's such an institutionalist. So we will see how this all works out. Certainly will. So this is an interesting development. that it is insanely corrupt that members of Congress can trade stock with regard to companies that are directly impacted by the actions that they are taking as members of Congress, by inside information that they are receiving as members of Congress. There has been a big nationwide swell of grassroots bipartisan support to do something about this obviously insane situation.

The issue had kind of fallen off the table. Every once in a while, one of the parties would pick it up, and Kevin McCarthy, when he was running for Speaker, before Republicans even got the majority, was like, oh, yeah, we'll pass the stock trading ban. When I'm Speaker of the House, we didn't hear anything about it. Nancy Pelosi did a fake effort and inserted a poison pill to make sure it didn't pass. Well, we have a new effort, and it's being spearheaded by two very unlikely allies,

Matt Gaetz and Alexandria Ocasio-Cortez. Also, they have, like, you know, bipartisan, like, problem solvers, caucus, centrist-type people who are involved in this effort as well. Gaetz was asked about his decision to work with AOC, someone he is very ideologically opposed to, and he had an interesting response. Take a listen to this. AOC is someone he is very ideologically opposed to. And he had an interesting response. Take a listen

to this. AOC is wrong a lot. She'd probably say the same thing about me, but she's not corrupt. And I will work with anyone and everyone to ensure that Congress is not so compromised. We should disallow congressional stock trading for the same reason we don't allow the referee to bet on the game. And this is not a small amount of money. $788 million worth of securities traded by members of Congress last year. About one in every four members of Congress is doing this. And it's not exactly like I'm elected with a bunch of Gordon Gekos and Bobby Axelrods. Take Lois Frankel, who you just mentioned.

She's been a lawmaker since I was five years old. And I'm supposed to believe that all of a sudden she's making moves like she's Warren Buffett. Yeah. And we're about to talk about Lois Frankel specifically. He's referring to a good point. You know, to be honest with you, I'm not surprised that Gates is willing to work with AOC. I'm a little surprised that AOC is willing to work with Gates. I mean, I'm glad to see it, but I am a little surprised by it. I'm shocked that she's willing to do it, but the details of the bill itself are actually quite good. Let's go ahead and put this up there on the screen around the actual bill to ban these lawmakers from owning stocks. What it would do is called the Bipartisan Restoring Faith in Government Act.

It's also sponsored by Brian Fitzpatrick and Raja Krishnamoorthy, who's another Democrat. And where they're coming to is one of the more stringent prohibitions on members, spouses, and any dependents from owning individual stocks, making trades, requiring all members or covered family members who currently own any individual stocks to divest or place them in a completely qualified blind trust. Even I personally have issues with the blind trust thing,

but it's one of those where, you know, willing to compromise. We can get to an actual qualified blind trust, even as fake as some of those can be. It's going to be monumentally difficult to get a majority of members of Congress to agree to this because there are many of them profiting royally off of the inside information that they hold, and they are going to be loathe to give up their ability to, what was that Crenshaw said, better themselves?

Yeah, you've got to better yourself. Better themselves. No opportunity to better yourself. And to go that extra mile and do what I think should be done, which is they should all have to divest their holdings completely and none of this qualified blind trust thing. I think we have to live in the realm of political reality that that would be impossible to accomplish. That's unfortunate, but that is reality. So I think accepting some sort of compromise, qualified blind trust situation here is the best we can possibly hope for.

I would love to see, you know, once we get more details on the bill, I'd love for someone who's a subject matter expert to look into because not all qualified blind trusts are created equal. So what are the specifics of those provisions and how much teeth does it have? I think that's a really important point. But we also had some news this week that underscores why this is so important. As they were referring to in that Matt Gaetz segment, put this next piece up on the screen, Democratic Congresswoman Lois Frankel. She sold First Republic stock before the takeover and the collapse and bought JPMorgan stock. And of course, JPMorgan Chase ends up being the massive beneficiary of this collapse because they get a sweetheart deal from the government to take over First Republic Bank. So it looks like a really intelligent, just insightful, prescient, eerily prescient trade that Frankel was able to make here, Sagar. These guys are – I mean they're just so shameless about their action.

As Matt said, like this is somebody who has been in Congress for literally decades. And what I always just come back to with all of them is how is not enough? Like why is it not enough to just sit with your personal finances? I just looked it up. She's worth $2.5 million. That's plenty of money. If you want to make more money, you can leave Congress. But it's never enough for them. She's literally been in the House of Representatives for decades.

That's another question. How exactly do you become a millionaire when you're House of Representative? And she's somebody who's long been on the list of trading in companies that have been influenced directly by their committees. You know, a household, or what should be some sort of household name, but is such a common activity that we have to only call it out in extraordinary times.

And that's what I think is sick about it. When you see this one where you're like, come on. Yeah, you're like, come on. Really? Come on now. Really? Right. Yeah, I think it's always important to underscore when you look at the overall numbers, do you

really believe that these people are consistently beating the markets and doing better than people whose job it is to make these sorts of trades? No. So, yeah, it is a disgraceful, disgraceful situation. I hope that this bipartisan effort picks up some steam. I'm really glad to see it moving forward and we will certainly keep close track of it. Yes, we certainly will. I hope that it goes somewhere, but you never know whenever it comes to things like this. In fact, you do know, which is unfortunately every single effort has been quashed. Let's go ahead and move on to Epstein.

We want to give everybody an update. Two separate things coming out, actually. One yesterday and another one today. Let's go ahead and put this up there on the screen. Jeffrey Epstein documents part two. Quote, dinners with Larry Summers and movie screenings with Woody Allen. My personal favorite is Mr. Summers, who, of course, the former president of Harvard, former U.S. secretary of the treasury, one of the most influential people in U.S. economic history,

probably in decades. And it turns out not only was he hanging out with Jeffrey Epstein, he was even raising money from Jeffrey Epstein well after he was a convicted sex offender. In one case, he says, quote, I need small-scale philanthropy advice. My life will be better if I raise $1 million for Lisa. Lisa, by the way, is his wife. Mostly it will go to make a PBS series and for teacher training. Ideas? And it's because he wanted to raise this $ million for his wife's pet pbs poetry project

now who amongst us has not had access to millions of dollars of our own personal wealth but felt the need to placate your do nothing wife's poetry pbs poetry idea by soliciting funds from a billionaire it's just a very from a pedophile billionaire or pedophile multimillionaire or whatever. It's just such a common situation for someone- Very relatable. To be, yeah, very relatable. My life will be better. Well, then spend your own one million. You're living on a Caribbean island. You're living in Cape Cod, all these other places. It's just totally ridiculous. But what comes across in the new Epstein documents is not just his relationship

with Summers. It's the fact that Summers felt so comfortable raising money from him after years of working with him throughout the Harvard tenure. Reid Hoffman, the billionaire venture capitalist, he even visited Epstein's private island in the Caribbean. He was scheduled to stay over at his townhouse in 2014. Woody Allen, now that one's a little bit less surprising, attended, quote, dozens of dinners with his wife. Yeah, sure he did, at Epstein's mansion and invited him to film screening. Ehud Barak, we've talked about that a lot,

the former Israeli prime minister. But you know what? Maybe we knew this already and I forgot. He says he was introduced to Epstein by another former prime minister of Israel, Shimon Peres. Oh, yeah. Okay. You know, you also had on the list Leon Black, who was one of the richest men on all of Wall Street, the former founder of Apollo Global Management, scheduled, quote, more than 100 meetings with Epstein from 2013 to 2017.

Don't forget. That one blew my mind. Well, it's already come out through tax records that Leon Black paid Epstein over $100 million, quote, for tax advice. Sure. That must be some good tax advice. It's great tax advice. Once again, it's so ridiculous on its face you

have jeffrey epsom is not a qualified tax professional you're worth nine billion when you have nine billion you have the top tax people on the planet who are available to you who are not convicted sex offenders so you know like it just begs belief there's a new report that came out just this morning crystal yeah that i feel compelled to mention. Yes. In one day, September 8th, 2014, Jeffrey Epstein was scheduled to meet with Bill Gates, Thomas Pritzker, Leon Black, and Mortimer Zuckerman, four of the richest men in the entire country. That's just one day, September 8th, 2014, well after he had already been convicted as a sex offender. Literally in the 10 a.m. hour, he was meeting with Pritzker and Gates. At the 11.30 a.m. hour, he was meeting with

Black. 2 p.m., Mortimer Zuckerman. 3 p.m., the top lawyer at Goldman and the former White House counsel, Catherine Rumler. 5 p.m., Leon Botstein. I mean, every single one of the people who I'm just naming here are literally like titanically powerful and rich people, which is insane. Like whenever you want to think about it, all of it, by the way, was actually scheduled to happen in and around either his residence or like at the Four Seasons Hotel. And I just think like it's such a perfect view into how all of this intersects. The last person who he was scheduled with was a quote philanthropic advisor to wealthy families.

And I just can't get away from this. Like when you're worth a hundred billion, like Bill Gates, why do you need help raising money for anything? You have more money than God. Like you can fund anything you You have more money than God. Like you can fund anything you want 100% out of pocket. That's my point though.

That all of their excuses are BS. They don't need help raising money. They need help with something else. And the question is, what is that something else? And that's what I would like to know. Well, and the other question is, I mean this is clearly not just him casually meeting this person or that person. This was a very intentional, strategic pursuit of people with wealth, power, fame, et cetera, connections that he engaged in as his job. I mean, this was his job was to meet and understand all of the, you know, deepest needs and desires and whims and, um, uh, and, uh, help solve the problems of, uh, whatever wealthy, powerful person he could get his hooks into, which apparently was a whole lot, all of them,

you know, just to, to go back to the land black one one, more than 100 meetings with Epstein from 2013 to 2017. I don't know if I have 100 meetings with my parents. Like that is so – that's like you're having like a weekly meeting. In four years, yeah. I mean this is – that blows my mind. And, you know, he was pushed out of Apollo Global over whatever the hell was going on here. That one blew my mind. There was also – That's 25 times a year. That's actually every other here. That one blew my mind. There was also, there were a couple of-

That's 25 times a year. That's actually every other week. If you, if you, yeah. What? Yeah, if you do the math. And you're Leon Black. Like, you are a busy, powerful person. Right, right.

And you're making time for Jeffrey Epstein every other week? Yeah, that's pretty crazy. That is crazy. It's only 52 weeks. And, and, you know, we don't have the, more than 100. Right. So, you know, it's't have the – more than 100. Right.

So, you know, it's more than every other week. So anyway, that is – It's going to be fun. Okay. So there's that. There's also a couple of anecdotes in this article that I think are really worth going over. One, they talk about this woman, Ava Anderson Dubin, a longtime friend and wife of hedge fund billionaire Glenn Dubin, invited Epstein to charity events to which he contributed.

In the summer of 2015, Epstein sent her a, quote, funny story about checking into a California hotel with a young woman. Quote from Epstein, I went to park the car and the bellman said to this young woman, is that your father? He wrote in an email referring to his female companion who was then in her twenties, a little old for him. And this woman, this, you know, billionaire wife or whatever wrote back, um, Glenn, her husband laughs so hard. What a hilarious joke about how young the woman you're with that they think that she's your daughter. So he clearly felt comfortable sharing some of his preferences with some of the circle. And there was another piece in here where they talked to this guy, Barnaby Marsh, who was an executive at a large charitable fund, the John Templeton

Foundation. He met with Epstein roughly two dozen times, often for breakfast at the townhouse, according to these documents. And he said so many of these billionaires knew him. Nobody ever said, watch out for him. He said Epstein convened people, including Microsoft co-founder Bill Gates, to try to solve problems facing rich donors, such as how to make large gifts. Epstein told Mr. Marsh that Epstein was managing money for mr gates gates denies that that is the case but i thought that quote was incredibly revealing that he's like yeah everybody just accepted this guy all these billionaires knew him he was part of the club so no one asked any questions because he was in the club i just i just frankly don't believe it's that easy maybe i'm wrong and maybe i'm very naive like as i come back to this when you're worth billions and

billions of dollars, every single one of these people, you have enough money to quote unquote fund whatever you want completely out of your pocket. So why do you need the sketchy guys help doing this? Clearly, something else is happening. I don't know what that something else is. I will leave it to you to speculate.

I am just saying, as you said, Crystal, you don't meet with somebody 25 times. 25 times a year on average. I have great friends who I don't see that often. Not even close. Yes, so. Not even close. Yes, ask yourself who you have met 25 times.

It better be like somebody, basically colleagues. People you work with, your kids. Your kids and your closest – and even men. The close ones, don't keep them that close whenever it comes to family. Every other week. Who do you meet with every other week in your life? And when you're worth $9 billion. So anyway, you can take that for what you will.

Also, I have good news. The private island that he had – let's go ahead and put this up there on the screen, has been bought by another billionaire. Stephen Decoff has agreed to purchase the two islands for just a mere $60 million. What exactly his plans are for the island? Who knows? Probably he got a great deal on it because nobody else wanted it. They said that this was half of the initial list price. And apparently, the rumor is, you know, the rumor is or what was reported out is he wants to build some sort of like exclusive resort. Well, it already was an exclusive resort for a certain other people with certain other proclivities. Kind of perfect that, you know, another billionaire sees a profit opportunity here. Of course.

So he doesn't care about the history of it. Of course. He's just going to go for the money-making opportunity. All right. Let's talk about the debates. Yeah. You guys are going to love this one. So now, apparently, according to Media Matters, wanting there to be debates is actually right-wing and is just a plot, you know, against whatever.

Okay. Put this up on the screen. Let me read you a little bit of this. The headline is, right-wing media are exploiting RFK Jr. as a spoiler candidate against Joe Biden. They say many conservative media figures are celebrating longtime anti-vaxxer RFK Jr.'s campaign as a potential spoiler against President Joe Biden's reelection, using his entry into the primary to call for Democratic debates. Oh, my God. Can you imagine calling for debates? That's horrifying. Which usually aren't held, they say, when a party is running an incumbent. Now, let me

just pause on that first sentence because everything about it irritates. I mean, the framing of him as a potential spoiler, he's not running against him as an independent, right? If this was a, like, Jill Stein situation, he was running as Green Party or third party or whatever, I can see the case, right? I could see how they could frame him as a spoiler candidate. Now, I still wouldn't accept that framing because I think democracy is good and I think it's better to have more choices than fewer choices. But I could at least accept that there is an alternative view and that this could be a damaging thing to Joe Biden's reelection prospects. He and Marianne Williamson, too, they're not running against Joe as third party candidates. They're running against him in the primary. And all they want is exactly what

the Democratic base wants, which is for people to be able to evaluate alternatives. Now, listen, I have no doubt that Steve Bannon and the other people that they quote here, are they interested in sowing chaos in the Democratic Party? No doubt about it. Are they like good intention and just really want to see democracy play? And of course, they don't want to see that. But to frame this as exclusively the interest and domain of, you know, right wing like Steve Bannonites is just incredible. It's not just misleading. It is an out and out lie. And so let me show you how I know that to be the case. There was just a poll that was done by

Newsweek and they asked people, put this up on the screen. They asked Joe Biden voters, okay, not all voters, just people who voted for Joe Biden last time around. Should the Democratic Party hold primary debates? Guess what? 79% of them said, obviously, like we actually believe in democracy and we would like to see some primary debates. Are those right wing people looking for a Joe Biden spoiler to reelect Trump? Of course not. They just look at the reality of this very aged president and their deep concerns about the future of the country. And by the way, his ability to defeat Donald Trump. And they're like, maybe we should at least have a chance to evaluate our options. And the last thing I'll say about this before I get your reaction is part of the cope in that Media Matters article is all about how,

well, they didn't have, you know, they don't normally have debates in the primaries when there's an incumbent president. First of all, oftentimes there isn't a significant challenge. And whatever you think about Marianne Williamson and RFK Jr., they're already both polling in double digits. RFK is at like 20 percent. OK, these are significant challenges. They have nationwide followings. People deserve to hear from them. And if you have issues with them, then you shouldn't be worried about them being up on a stage. Great. They can be exposed as the clowns that some people think that they are, or perhaps they will have interesting things to add to the conversation that will be relevant. And by the way, might actually make Joe Biden a better candidate if

he is able to survive that process. I think it is an insane argument to say that, oh, well, because we didn't really have democracy in the past. We shouldn't have democracy now. Like that is a ridiculous, absurd, you know, fig leaf to try to use to cover your anti-democratic authoritarian tendencies here. Once again, I always come back to 1980. President Jimmy Carter is weak, feckless, some would say. Some would say about to get wiped out by Ronald Reagan. That was empirically true. Senator Ted Kennedy decides to run against him. They do have actual debates on the debate stage. They fight it out in a big primary.

And guess what, Crystal? He won only 37% of the vote. You know, Ted Kennedy did at that time. That's not too far away if you combine Marianne Williamson and Bobby Kennedy. Or, yeah, what is he? His nephew, I guess. RFK Jr. would be Ted Kennedy's nephew. So it wasn't that long ago that you had a competitive primary with a debate where Kennedy only ended up winning 37%, and that was only in a one-off.

So if you have two candidates who in the race were roughly around that, then why shouldn't they be treated in the exact same seriousness and way that we handled the 1980 Democratic presidential primary? It was totally reasonable. And by the way, there's a lot of evidence to say Carter was probably better off for it because it made him sharp and had to defend his record before he went into the incumbency fight against Ronald Reagan. So it's not even like it was all that bad. And it also shored up his support because he definitively won the primary again. He wasn't just handed the nomination. The Republicans had a very spirited debate in 2016. And guess what? It didn't hurt Donald Trump.

He ends up winning and I think probably made him a better candidate for better or worse because he went through that democratic process. Barack Obama and Hillary Clinton had a very spirited primary debate. And guess what? It really sharpened him and made him a much more effective candidate going into 2008. So this notion that democracy will damage the prospects of, you know, whoever emerges from the Democratic primary, I think is ludicrous. I think it's ahistorical. And I think it's just incredibly intentionally misleading. So we see the path they're on here. Number one, they just dismiss any potential challengers. These ones aren't serious. It's like, according to who? Because actually, if you're asking American people and this is with total media blackout, total media smear campaigns, still the Democratic primary base is like, we see something there to the tune of double digit support. And I'd be very interested, by the way, to see a poll out of New Hampshire

specifically of these three candidates. I think you would see a pretty interesting landscape. So they want to just dismiss them as kooks and wackos. You have no choice because, you know, none of them are quote-unquote serious. Any sort of plot to have a real Democratic, small-D Democratic process is just a right-wing scheme, spoiler scheme. And, you know, bottom line, we just don't think that you should have a choice in the interest of saving democracy.

We should have no democracy effectively. Yeah, I think it's completely ridiculous. I support debates. I think debates are good. I'm doing my monologue today about debates, about presidential debates and how there are different ways that we can fix it. And yeah, I just come back to the truth that at the times in American history when we had the least amount of direct democracy, so I'm talking here about like when senators were appointed at one point by the state legislature, which is insane in retrospect.

They were basically just bought off. It's like whoever the richest guy was was the person who would get himself appointed to the Senate. And it was outrageously corrupt. And even in terms of the primary system or the convention system where you'd have like smoke filled back rooms in the pre-primary age, which again, not that long ago, really only created in the 1960s. Before that time, it was outrageously corrupt because you had the big business interests and all these other people just pick who they decided to be was president. Now, look, I love FDR. I think he was a great president. But think about this.

They selected Harry Truman. They didn't even tell anybody that FDR was deathly ill whenever he was running for his fourth term. And they effectively selected this man for political purposes with no truth to the American people that he very likely would become the next president of the United States. That's crazy when you really consider it on the merits. It worked out. I think Truman was a good president, but it could have gone the other way. It could have gone the Andrew Johnson way, which it has. Well, also, I mean, here's the other thing. Joe Biden doesn't do many press appearances. He doesn't give many interviews. So you have a Democratic base that continues to be very concerned with electability and really wants to make sure that they can defeat, you know,

Donald Trump or if it's Ron DeSantis or whoever it ends up being, but probably Donald Trump. They're very interested in that and they deserve an opportunity to assess whether Joe Biden is still that candidate. And I think that there are some real questions about that. And by the way, if Biden's own team felt confident in his ability to, you know, parry and debate and articulate a vision, they would be approaching the campaign with a very different strategy. Right now, there are no big campaign rallies planned. He launches with this low-key video. Now he's really planning on just trying to stay in the shadows and hope that Trump is insane enough that people are like, all right, I guess we got to stick with Joe. And he's hoping that the media, like this person did for them, will just try to convince the whole Democratic

base that you have no other option, so suck it up and vote for Joe again. Very true. Crystal, what are you taking a look at? There is a new shocking report out of Louisville, Kentucky. So apparently the Department of Labor found that two 10-year-olds were working unpaid shifts at a McDonald's restaurant. This is just as horrifying as it sounds. According to CBS News, officials said the children were not paid, yet sometimes worked as late as 2 a.m. And they, quote, prepared and distributed food orders, cleaned the store, worked at the drive-thru window, and operated a register. Investigators learned that one of the two children was allowed to operate a deep fryer. That is a prohibited task for workers under the age of 16. Now, there's a good reason kids under 16 are barred

from working the deep fryer. It's really dangerous. Just a year ago, a 15-year-old in Tennessee suffered hot oil burns while working the deep fryer at a different McDonald's. Now, the owner of this offending McDonald's, Bauer LLC, claimed no awareness of the fact that 10-year-olds were working the register, manning the drive-thru, and operating the deep fryer. Owner Sean Bauer told CBS News the kids were not approved to be in that part of the restaurant and that they were there at the direction of and in the presence of their parents. But this is far from the first child labor law violation from Mr. Bauer's company. They were hit with a $40,000 assessment after the Department of Labor found they had 24 kids under 16

working longer than approved hours. Nor is this a problem confined to this one McDonald's franchisees. There are three McDonald's franchisees, which combined operate 62 McDonald's, that were found to have worked 305 children longer than the allowable hours. Now, this is part of a larger trend, which through new laws and violations of existing laws is working to roll back a century's worth of child labor protections. According to the Economic Policy Institute, the number of child labor law violations has skyrocketed over 200 percent since 2015. And we have seen a 37 percent increase just year over year.

A recent investigation found kids age 13 to 17 employed by a meatpacking sanitation company. These kids were forced to clean back saws, brisket saws, and head splitters at meatpacking plants owned by some of the top names in big food in this country. New York Times recently published a heartbreaking report on the way undocumented kids are being funneled into a nationwide network of effectively indentured servitude, exploited for low wages, backbreaking labor, and horrifying conditions, all because their youth and immigration status make them easy prey. Just as disturbing is the successful industry lobbying effort to make some of these harmful practices perfectly legal. This year alone, eight bills have been pushed in six different states to roll back child labor restrictions. Arkansas made headlines when Governor Sarah Huckabee Sanders signed a law repealing restrictions on 14- and 15-year-olds as a group of children appearing rather bereft looked on.

We covered recently how Iowa has gone even further. A newly signed law brings us straight back to Dickens with young teens working on assembly lines, in meat coolers, in construction, and in industrial laundries. And to circle back here to McDonald's illegally employing literal 10-year-olds, one of the main drivers behind these changes is the powerful National Restaurant Association, a giant lobby for big food interests, including McDonald's. More Perfect Union basically got one of their lobbies to admit that they wrote the draconian Iowa bill. The timing of this push to get kids into meat lockers and handling deep fryers, by the way, is no accident. For my entire life, employers had the upper hand with workers in every single way. They could treat them as disposable, they could crush any fledgling union attempts, they could steal their wages, and they could pay them very little. Well, a lot of this

is still going on, but now workers are starting to get a modicum of power back. Unemployment is low, labor market is tight. That gives individual workers more power on their own since they can leave an abusive, low-paying, or exploitative jobs with a higher level of confidence that they will be able to find something else. In fact, even as inflation continues to bite, there are some decently encouraging things happening for the lowest-wage workers. A working paper from the National Bureau of Economic Research finds that wages are rising quickest for the lowest-paid workers and that this trend has actually reduced inequality. That's a phrase I have not heard in my entire life. This trend has also shrunk the college wage premium. Retailers

like Target and Walmart have been forced to hike wages in order to retain or attract the workers that they need to staff their stores. And obviously they're not doing all of this out of the goodness of their hearts. But rather than have to raise wages, big business would rather maintain their record-breaking profit margins and just find cheaper and more vulnerable labor. And that, of course, is where the kids come in. Employers love child labor for the same reason today as they did 100 years ago. Kids are cheap, they can be more easily manipulated, and crucially, they're less likely to form a union. In fact, it was the labor movement which successfully pushed the first federal child labor protections all the way back in the 1930s. Photographer Lewis Hine traveled the

country documenting kids in dangerous and horrible working conditions. This shocked and horrified America. At the same time, activists made the case to the country that child labor was bad for everyone except big business because it also depressed wages for adult workers. That was a compelling argument at the time as the nation was struggling through the Great Depression. Organized labor made the success of this multi-pronged effort possible. Now, in our current moment, unions have been beaten back. Union density is at historic lows. However, employers, especially those in the service sector, feel the threat of potential unionization like they haven't in decades.

Successful union drives at Starbucks, REI, Chipotle, and elsewhere, they have made fast food and retail a real target. The desire to avoid a union is another often overlooked reason that big business prefers to rely on young teens for their workforce or even, apparently, 10-year-olds. Now, if there's one thing I've realized in the past few years, it's that bad old ideas, they're never really dead. They're just dormant, waiting for a moment of opportunity to rear their ugly heads again. Whether it's the post-Dobbs whores, women being forced to bleed out in a parking lot until they're near death before doctors will actually treat them, or new effort to trap spouses in unhappy or abusive marriages by rolling back no-fault divorce laws, or kids being sent to clean head splitters in meatpacking plants when they should be, you know, doing homework and getting ready for school or just being kids.

We must apparently remain ever vigilant to make sure that rights remain intact and that our fast food is not being served up by happy meal age children. These days, nothing is sacred. This story has sparked a national outcry just because of the tender age of these youth. Just because they were so young. 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, in 1964, Marshall McLuhan published a landmark book. It was titled Understanding Media, the Extensions of Man. In the book, McLuhan coined a popular phrase that you might have heard. Quote, the medium is the message. The theory behind it is that focusing on the content produced in mass society is less important than a study of the medium producing the content. As in, don't look to critique a specific TV show. Look to cable TV and the distribution itself. The medium is the message, a very useful analytical tool. Another way to think about it is systems versus individual actors.

Many neoliberals today speak about how politics is broken. What they really mean, though, is their party is good and the other party is bad. But when people like me say politics is broken, we're seeing the whole system, both parties. We're taking a step back. It's not about red and blue. We're talking about the construct itself, why that is poisonous. That's the framework I'm using to look at our current presidential debates, events which both mean everything and are meaningless. We have reams of political science evidence that exists to say

presidential debates have almost no impact on the eventual outcome of an election anymore. There is decent evidence to say they matter a lot in the context of primary debates, intraparty, where hyper-committed voters want to see how candidates fare against each other and see if they could ever see them as president. Yet, that's not the only reason to have debates, is it? Sometimes it's not just about whether it would change an election. Sometimes it's the only forum that exists where candidates can get pressed directly about what they actually think, not just from their opponent, but also by the press. That's why I was heartened to see some news that the mainstream media is actually freaking out about right now. The Republican Party, and specifically Donald Trump's effort to ditch the Commission on Presidential Debates. Top Republican officials on Trump's behest

recently met with the largest TV networks in the country to pose an interesting question to them. What would you do if the party ditched the Commission on Presidential Debates and sets up a new one outside of the existing system. The TV networks did not give an answer, but the leak is no coincidence. The Commission on Presidential Debates is a perfect example of how flawed and terrible our current system is

and how much the dying establishment media maintains control on our discourse. For historical context, the Commission on Presidential Debates is not some hallowed institution. It was only created in 1987 by the chairs of the Republican and Democratic parties. But what a lot of people don't know is that the reason this was created was specifically to rig the system by both candidates. You see, before the Commission on Presidential Debates, the League of Women Voters sponsored presidential debates from 1960 to 1988.

By all accounts, they actually did a fantastic job. To this day, you can go back and you can watch debates from 1960 to 1988, and you can see much more substance than any of the debates in the cable TV age. The reason the League itself pulled out from the debates is one that pertains to our subject. In 1988, the Dukakis and Bush campaign negotiated a secret memorandum of understanding where the two campaigns met and hashed out terms of how the debate would go, including, but not limited to, the selection of questioners, the composition of the audience, hall access for the press, and tons of other issues like that. The League, to its credit,

said, no, we're not doing that. We're not going to give you any of that. Our debates are independent, and we are up to us. So what did the campaigns do? They ditched the League, and they created our current system. The Commission on Presidential Debates is sponsored by massive Fortune 500 companies, so-called luminaries of society. These people together partner with establishment media journalists like Chris Wallace last time around for our current debates. From that point forward,

they negotiate the awful and staid format that we have all become used to, the so-called head-to-head debate in round one where the answers are fake and they're short and all the rules are agreed to beforehand. Then you learn absolutely nothing. The famous town hall debate for the second one, that too is rigged. It's a TV event. And then finally, the foreign policy debate. They've become predictable affairs where Americans learn nothing. And again, to reiterate, this is by design. The entire reason for the commission's existence is specifically because campaigns and major parties want as much control as possible. Even they seem to have gotten carried away, though. In fact, one of the reasons the Trump campaign doesn't trust the commission is because during the scheduled second debate, the selected moderator was C-SPAN's Steve Scully.

Trump ended up missing that debate because he contracted COVID, but there was one issue with Scully. He was actually an intern for Joe Biden in his college days. I mean, come on. There are a lot of liberal journalists in this country. Can't you at least select one that didn't work for one of the guys on the stage? It's just absurd. Now, the only reason it didn't get more attention is because that debate never happened, but it does reveal how deep the rot inside the commission has actually gone. It's time to just blow up the commission on president's debate. It's time to kick it back to an open

system. Let chaos reign because inside of chaos, we might actually accidentally get information. And let's basically anyone who should be able to bid for both of those candidates get a format and let's change the rules. Because I think all of us can agree that the current system is not working for us. Unfortunately, though, as I already said, this is less likely to happen. Biden is an institutionalist. He almost certainly is going to stick to the commission because he likes so much control that they're willing to give him. But this is an opportunity nonetheless. If Trump pulls out, who knows what's going to stick to the commission because he likes how much control they're willing to give him. But this is an opportunity nonetheless. If Trump pulls out, who knows what's going to happen next time around. And when it does, people like us and all of us will be waiting.

And I think that's the fun part around this. I mean, the commission on presidential debates is just complete BS. And if you want to hear my reaction to Sagar's monologue, become a premium subscriber today at BreakingPoints.com. Joining us now is Ben Smith. to Sagar's monologue. Become a premium subscriber today at BreakingPoints.com. Ben, very apt timing with this new book given the current end of BuzzFeed News of which you were once at the helm of, the news that we might see a bankruptcy soon from Vice. Many of the titans of the 2010s media era appear to be on their way out. It's something that you were literally involved in and now you're writing about it in retrospect. First of all, why did you decide to write the book as kind of a look back on something as you start something new? And how does it relate to everything that's going on right now?

Yeah, and thanks for having me on and congratulations on the show. Thanks for you. The, you know, I was, when I was in, after I left BuzzFeed in 2019, I went to the Times and was the media columnist for a couple of years. And I guess found myself feeling like it was, as you say, kind of the end of an era.

But also then wondering kind of, okay, what was that? What did we all just live through? You know, where did it begin and why? And I had, I think, been on the margins of it as a young reporter in New York in the early aughts and kind of knew that there were these new things, these new blogs, sites called Huffington Post. But I was off blogging about politics and New York politics, sort of a different thing, and really stepped into the middle of it really in 2012 when I joined BuzzFeed and heard all these stories about like the weird origins and was fascinated by that and just thought, I don't know, partly because we all had a little bit extra time on our hands during the pandemic, that it would, yeah, that it would be interesting to go back and just try to understand where this all started and who, these, you know, what were truly media superstars at the time, BuzzFeed News, Vice News in particular, they had huge valuations, people were throwing money at them. This was thought, you know, this was the new big thing. What do you think were some of the commonalities there? Well, I think you sort of, you know, have to put your head back in what feels like this very far away moment of the early 2000s, where, you know, the mainstream media,

the Condé Nast, the New York Times and television networks really just weren't on the internet in any meaningful way. And if you were like most of us on the internet, they weren't, you know, they felt totally disconnected. And they had actually also blown the biggest story of our careers, the Iraq war, in large part. And so there was a sense that I think people forget that, that they were, that people were ready for something really new and were suspicious of these institutions and that was deserved. Um, and so the arena, these, these places in differing ways were sort of waging an assault on the establishment and using these new tools to tell different stories, different ways, sometimes very explicitly.

I think Gawker really was like, we're going to rip the masks off these hypocrites and show them what they really are. That was sort of its mission. And at times, in really delightful ways, like this site Jezebel, which actually, it was a women's blog that they launched in 07, and immediately did that in just these very kind of literal senses.

They put out a bounty, a $10,000 bounty, for unretouched photographs from women's magazines, which at the time was like a really revelatory thing to do. And somebody in fact did like steal or take a photo of Faith Hill, the country singer that had, where she still had her smile lines at her freckles and brought it to them and they triumphantly posted it. But it really did, you know, put pressure on these magazines

to represent women more like they were, like, which is sort of a small metaphor for what they, at their best, I suppose, were trying to do. I read the, yeah, the New York Times piece that you published around Jezebel, and I thought it captured everything, both about the blogging era, but also about audience capture. That's something you and I had talked a little bit about before, Ben, just about how some of the very early signs of what was to come were all present within that. One of the things that I think where a lot of people got excited, both investors and I

think people working in it, was feeling that they were on the forefront of something new at the time. So in retrospect, how new was doing news on the internet? And what are some of the lessons for people like us, people like yourself, that are still trying to actually build something new? So I do think digital media represented a big cultural shift. I mean, I think that, you know, it's sort of for historians of the future to look back. But the extent to which, you know, if you wanted to distribute information widely, you needed to control a printing press or a television tower or then a cable channel. I mean, that was real. Like, that is how the world was organized.

And that suddenly the gatekeepers couldn't really hold the gates, you know, for better and for worse. And I think that's all still being sorted out, really did change society and politics and the media. And, you know, and there were these huge opportunities. And, you know, I think initially one of the things that's, again, so interesting to go back was that it was assumed that this was fundamentally kind of a progressive space. Facebook in particular was where college kids hung out. So obviously that was a place that would support Barack Obama and that these were all tools that would in some sense culminate in Barack Obama's election in 2008. And I think one of the big surprises for me in reporting it was how

close your people, Sager, the kind of populist right-wingers were all along to that. You know, the guy who founded 4chan, which I'm not sure you want ownership of, but was working out of BuzzFeed's offices. And Andrew Breitbart was a co-founder of Huffington Post. Yeah, that's true. And Steve Bannon was hanging around there as well. And I think in some ways it was best suited for a kind of anti-establishment, unconstrained, right-wing politics that grew up in the 2010s and used these tools to their fullest extent. In some sense, the election of Donald Trump is then the real culmination of all of it. Oh, I think that's true. So what do you see as bringing about the end of that era? And what media era do you think that we are living in or entering now? Yeah, I mean, I wish I knew

with total clarity. But I, you know, I think ultimately, it's always going to be I mean, these aren't machines, it's ultimately the consumers, people get sick of it. And I think the same way people were sick of the old media in 2004 by 2016, 2017, the notion that, wow, you can just go on Facebook and like hear from everyone and you can get cat pictures and thoughtful articles and insane politics, like all in one place, no longer felt so fun and interesting. And people, I think, I mean, I feel very disoriented looking at social media now. And it's not a great experience for telling you like, hey, what is happening in the world, actually? And so I think there has been this swing of the pendulum in reaction, essentially, toward, you know, in particular,

kind of trusted individual voices. I think it's hard. People are, for whatever reason, across different areas, a little less connected to brands and more to people. But I think that's, you know, why the kind of stuff you guys do is very successful. One of the many reasons, of course. But looking for people who can help synthesize this flood of information and organize it and not just, and I think, you know, it's, and of course, like, that's our bet at Semaphore that, you know, that people are looking for a kind of human transparency in the journalism for me to say, here's what I found. Here's my opinion. But, you know, there's room for someone reasonable to disagree with me.

And then also to do the service of bringing, trying to bring in voices from all over. I mean, and not just feed you our own perspective. Yeah, I think that's very important for people to understand, which is that at a certain point, like there's so much information out there that helping people make sense of all of it is actually where a lot of the news business has gone. But something you always have emphasized that we always keep in the back of our minds too is at the end of the same time, though, nothing does beat new information. Nothing does beat scoop. So whenever you look at this fusion of like new and old journalism, what do you think like a happy medium looks like for the future media companies like yours, like ours and all the others ones to come? I mean, I think we're headed into a much more splintered universe where the thing is like the crazy thing about the Facebook and Twitter era was there were just these two giant platforms that totally dominated the news

business and everyone, every journalist in some sense, or most of them were thinking about them. And not only people were also thinking about like, you know, making broadcast television shows, but those two platforms dominated. I don't think we're, I don't think we, I really see that even now. I don't think those two platforms are as dominant anywhere near as they were. And so you're looking at a much more splintered, diverse landscape without sort of this is the single trick that will, you know, succeed. Yeah. And what do you see as the sort of current state of Twitter in particular, which for so long has been such a, you know, shaper of elite discourse in particular and was at times, and we really leaned heavily and still do on Twitter to surface stories for our show. But I'm finding, personally, I rely on it less and less. It's just, you know, it's not like an ideological

anti-Elon thing. I just find it less useful these days. Do you think that that is the case? Do you think that Twitter and other social media platforms are actually going to become less important in terms of the news media business? And they obviously have become less important. And that's right, partly because it used to just do this very useful thing of when you wanted to know what was happening, you could look at Twitter and it would tell you here is what is happening in the world. Right. And now you look at Twitter and you just know what is happening on Twitter, which I find riveting as a longtime Twitter user and is fun and weird. But, you know, but I have to go somewhere else if I want to know what the news is.

And so I think, you know, I think Elon has made mistakes and has kind of, has sent like a ideology about how the news media works that isn't really connected to reality, but also that it was probably doomed. Like that these social platforms are fundamentally these social institutions that get cool and then that people get sick of. And you're mostly there because your friends are there. And then they leave and you leave. And it doesn't mean that Twitter and Facebook won't exist in 10 years, right? I mean, I think Reddit is a great example of a social platform that

is great and is incredibly powerful and fun and interesting. And I go on many days of the week, but isn't culturally central, isn't central to news and politics. Yeah, I think that's all really smart. I encourage everybody to go buy the book. We'll have a link down in the description of this video. Ben, really appreciate you joining us, sir. Thanks for your time, Ben. Good to see you. Thank you for having me, guys. Absolutely. All right, guys, thank you so much for watching. We really appreciate it. Thank you, as always, to all the monthly, yearly, lifetime members who have been signing up. We love

you all. Every single person, you're all have been signing up. We love you all. Every single person, you're all equal in the eyes of Breaking Points and the community just because you are all contributing and helping us scale up. So much of the discussion that we all just talked about is a big reminder to me and a vindication, honestly, of our strategy. We have not taken on one scrap of business debt here.

Everything is financed through a cash flow process exclusively almost entirely by our premium subscribers. A lot of the buzz feeds and all these people, they raised billions of dollars. They had bosses who were not their own boss. I don't know if anybody is taking notice of what's going on right now over at Barstool. I saw something. What is going on? All right. Let's spend some time.

Maybe we'll clip this out. Let's clip this out and do a separate segment on this, because this is actually a very vindicating, I think, for a lot of my theories and our theories around how to run a media company. Okay, all right. So Barstool had this guy who worked for them, and he was on the air,

and he was singing along to a rap song, because he had the lyrics- I already know how this is gonna go. He had the lyrics that were in front of him. One of the words that he rapped on the air was the N word. Okay. So he did that. He turned white as a sheet. He clearly was deeply apologetic about it. He said, I shouldn't have done it. He's been very apologetic. Barstool then is owned or currently is owned by a larger company called Penn Gaming, a gambling institution. Okay. Barstool did not want to fire him. They wanted to discipline him, whatever. Penn Gaming, the top company, came in over the top and overruled both

the CEO of Barstool and Dave Portnoy and said, no, we're going to fire this guy. He's literally getting canned as part of the talent. Now, whether you agree on whether he should be fired or not, I personally don't think he should be fired. Whether you agree or not, the fact is that the people who run the company didn't want to fire him. But because they sold the company, they don't think he should be fired. Whether you agree or not, the fact is is that the people who run the company didn't want to fire him. But because they sold the company, they don't have control over their own employees. And now there's this whole split in the Barstool community. And it's very messy because you have Dave Portnoy openly saying, I did not want to fire one of my own employees. And at the same time, you have people who work at Barstool who are like, I don't

agree with this from my bosses. You have Barstool fans who are all like part of the cold, not my Barstool moment. They're like, I ride or die for Barstool because I don't agree with so much of the mainstream culture. Now Portnoy is like, I'm going to stop selling the cancel, cancel culture sweatshirt. It's just a messy situation. And it's one of those where, yeah, you know, at the end of the day, and at least he was honest, people were like, you're a sellout. He's like, yeah, I sold it. He's like, I sold the company. You reached for the cash.

That's a really cautionary tale. It reminds me of the 538 thing. Exactly. Yeah, because we talked about this before, but Nate Silver, as I said, Ezra Klein, another 2010s personality, but Nate Silver out at his own baby, 538. Why? Because he sold it to Disney.

That he created in his room. That's his thing, like that whole brand. Anyway, we will not do that. It's a cautionary tale just to show people, like, listen, you know, it's a deal with the devil in many respects. Sure, you know, Portnoy, it did certainly well. Many people there also did well. But the core of the brand was about dudes online, shitposting, going against the culture. And it's like whenever you sell, you know, even to, and by the way, the claim is, since we're going to do a segment on this, and this is going to be posted.

The claim is that Penn Gaming would have faced regulatory pressure by gambling regulators. Come on. That, look, maybe. No. Personally, bullshit. No, that's bullshit. Complete bullshit.

So your one subsidiary employee company made a mistake and said something, which, look, you know, discipline, whatever, okay? But the idea that if he still remains with the employee of the company, made a mistake, and said something, which, look, you know, discipline, whatever, okay? But the idea that if he still remains with the employee of the company, that you are going to lose your regulatory license, not just in one state, but like all states, I don't believe that for a second. That is nonsense. I mean, look.

If you want to fire the guy, then just fire him. It goes back to what we were saying about Tucker Carlson, number one rated cable news host. When they're like, you're going to wear a sweater. Right, yeah. You're going to wear it. Ultimately, he wore the sweater. That's the point. That's it.

Right there. That is it right there. That is why we ask people, just so you know, for premium subscriptions. Because we're not going to be in that situation. We will not do that. You know, we're not going to be in a situation where somebody. You will wear the sweater. Yeah. Or somebody's going to tell us what to wear. Or somebody's going to be in that situation. We will not do that. You know, we're not going to be in a situation where somebody. You will wear the sweater. Yeah.

Or somebody's going to tell us what to wear or somebody's going to tell me. Listen, we fire somebody's because they deserve to get fired, not because somebody's going to tell me that they need to get fired. And that is where, like, you look at that and there are real perils. So one of the things that we are committed to here is making it so that you are the people who help fund and support all of our work here. And we will, if we have to scale slower, so be it because ain't nothing in the world is worth somebody telling you how to run your own affairs. Keep the overhead low, build step-by-step like we have been and rely on your support, which you guys have come through in an amazing way. Programming note, I will be out next week. Yes, that's right. Everybody say congratulations.

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