Breaking Points with Krystal and Saagar - 6/23/22: War Sanctions, GOP Primaries, Uvalde Coverup, Fed Policy, Neoliberal Order Collapse, Gas Tax Proposal, & More!

Episode Date: June 23, 2022

Krystal and Saagar discuss the West's sanctions reckoning, GOP primary elections, DeSantis vs Trump, Uvalde police misconduct, Fed policy implications, MSNBC scolding, economic collapse, gas tax mistake, & more!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/New Yorker Feature: https://www.newyorker.com/culture/culture-desk/the-rise-of-the-internets-creative-middle-class Skanda Amarnath: https://www.employamerica.org/ https://www.politico.com/newsletters/morning-money/2022/06/22/a-break-the-glass-moment-on-inflation-00041266 https://www.employamerica.org/blog/the-first-dose-of-supply-side-damage-is-here-the-dark-side-of-fed-and-financial-conditions-tightening/  Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

This is an iHeart Podcast. Cable news is ripping us apart, dividing the nation, making it impossible to function as a society and to know what is true and what is false. The good news is that they're failing and they know it. That is why we're building something new. Be part of creating a new, better, healthier, and more trustworthy mainstream by becoming a Breaking Points premium member today at BreakingPoints.com. Your hard-earned money is going to help us build for the midterms and the upcoming presidential election so we can provide unparalleled coverage of what is sure to be one of the most pivotal moments in American history. So what are you waiting for everybody today. What do we have, Crystal?

Indeed we do. Lots of big stories that we want to talk to you about this morning. First of all, the New York Times actually forced to admit that our sanctions on Russia have completely backfired. Their word is boomeranged. So they have some new numbers there that are pretty interesting. We also had some primaries this week down in Georgia and Alabama. A little bit of tea leaves reading some contradictory indicators about the state of the Republican Party and Trump and all of that stuff. And also, this is pretty stunning. Ron DeSantis actually ahead of Trump in a new New Hampshire theoretical primary poll. So we will break that down for you. Also, some other interesting moves on DeSantis' part. I just, I can't believe we continue to learn more and more horrifying details about just what occurred in the Valdi massacre. The very latest news is that that chief of the school police unit has actually been asked to step aside for now.

Finally, I don't know what took so long. So we've got the details there. Also, an interesting moment from Elizabeth Warren, of all people, kind of calling out the Fed and really in a very succinct way demonstrating how limited what the Fed is going to be able to do in order to get inflation under control and get our economy back to where we would all ultimately like it to be. And then we've got some interesting thoughts from MSNBC on gas prices. Yes. But we wanted to start, Sagar, drumroll. We finally have the date. It's finally happening.

The date, the announcement, the link. It's all over, people, after I've gone to war for all of you. We're coming to Atlanta Center Stage Theater, Atlanta, September 16th, 7.30 p.m. Okay, so here's how it's going to work. As we promised, the presale is going live today. It will be in your email. There'll be a Ticketmaster link, and we're going to give you a password. You have to be a premium member for the first week in order to be able to buy tickets.

If you're a Lifetime member, here's how it's going to work, just to make sure that the seating and all of that works out properly. Go ahead and buy tickets. Send us an email. We'll refund the cost. As we promised, Lifetime members get VIP access. I do also want to say, because this is what they've warned me, if you are worried that this is going to be the only show, it is not the case.

It is first of many. We have to go through this process and announce on this particular one before we can go ahead and book other venues. We sort of have to demonstrate the desire for people to come and see us before we can book other venues. Yeah, just to give people a peek behind the curtain, venues and other people won't do deals with you unless you can show that you can sell tickets elsewhere. Hence, we were able to get a nice deal with this venue, Center Stage. Thank you, Center Stage Atlanta. So go ahead, buy tickets, show the world that people can show up for Breaking Points live.

It's going to be fun. We're going to have Crystal, me. We're obviously going to have friends, special guest appearances at various different locations. And for those of you who are in other parts of the country, don't worry. We are coming. We have the map, all of that and stuff laid out. So don't worry as if this is the only one. Right. This is not your only chance. I am excited about going to Georgia, though. Yes. That's part of the reason why it's fun. Right. We timed it specifically to be, you know, right in the heat of election season and just before some of the biggest races in the country are unfolding in Georgia right now. So to get to go to Atlanta City I haven't been to for a hot minute.

I'm pretty excited about that. I have not been to Atlanta. You've literally never been? I've never spent time in Atlanta. Like, traveled. I've, like, obviously spent time in the airport. But that's basically it. I started college at Clemson University in South Carolina, and it's not that far from Atlanta.

In fact, a lot of times you would fly in and out of Atlanta. The airport would be the cheapest one to fly in on. So I spent a bit of time there when I was in college, and I've been back since, but I haven't spent a lot of time there since. So anyway, excited to go down to Georgia. We're coming to Atlanta. We're coming to other battleground states. We're coming to major metropolises. Don't worry. We are coming. For those of you who are in the area or, you know, whatever, within a couple hundred miles, go ahead and buy tickets. Show the world, like we said, premium subscribers are the people who get the first shot at all ticket sales, not just this one. And for the lifetime members, you guys have

guaranteed seats no matter where, no matter what. As I said, buy the ticket, send us an email. We'll refund you the entire cost. So go ahead and tell us. Yeah, it's going to be exciting. We've been working on this for over a year. You know, we were worried with COVID like a year ago. The last time, think about the last time we did one of these. The very last thing that her and I did was that book show. It was March of, what, March 2020, I want to say. In retrospect, probably should have done it. It was like March 19th or something. It really was. It was March of, what, March 2020, I want to say. In retrospect, probably should have done it. It was like March 19th or something. It really was. It was in Brooklyn. It really was like the last moment before everything shut down for COVID. And there is no doubt it was circulating the virus so much more widespread than certainly we realized and that much of the country realized

at that point. But we got in right under the wire. Had an amazing time. You know, that show, it actually, even though we probably, in retrospect, it was risky to do, we had so many people share with us that that was like, you know, they really sort of held onto that for a long time because it was the last thing that they did

and went out in public and did before everything shut down. So anyway, it's been a lot too long and we're excited to get back out and get to be face-to-face with people because there really is nothing like that, just like direct human connection. Oh, I absolutely love it. I love meeting people and especially like getting everybody together anytime that we were able to do that. It's been two years, you know, and the show has grown so much. So, I mean, there's so many people who've never even had

that opportunity in the last two years in order to even just meet us and have fun. And I've been studying other people and how they do live shows and live podcasts. So we've got some fun things planned, I think. Yeah, it'll be good. We had some great innovations in our last one. We're just going to keep building on that. And now we have more production value, and thanks to our premium members and all of that,

we can bring in some more people and we can really invest in the show. It's going to be a fun experience. And then just like the New York show, we're going to have the premium subscriber. They're going to be able to vote on all the topics, the stuff that we cover. And a lot of it will be made available on YouTube for everybody at a later date. So don't worry.

You're not necessarily going to lose out. And like I said, get excited. If you're in the area, go ahead and buy tickets. We're really excited. Go ahead and tweet it out. Post it on Instagram or whatever. We'll retweet it. We'll put it on Instagram.

And let's sell this thing out so we can prove to the world that we can also buy tickets or we can sell some tickets here at Breaking Points. Indeed. All right, let's get to the news. All right, with all of that out of the way,

let's get to the show. Go ahead and put this first tear sheet up on the screen from the New York Times. Lo and behold, New York Times even forced to admit, here's the headline here,

Western move to choke Russia's oil exports. Boomerangs, they add in the caveat, for now. The subhead here says, with China and India buying the Russian oil shunned by the West in an effort to force an end to the Ukraine invasion, Moscow is earning more now than it did before the war. OK, let that sink in. You are paying more at the pump, in theory, in part, to punish Putin. In reality, we are punishing ourselves. And because the oil price has spiked to such

astronomical levels, he is literally, his regime, literally making more money from oil and gas than ever before. The Chinese and the Indians have stepped in. They are happy to buy oil at a discount. This is something that we have been covering here. There's another twist, though, that I learned in this article, which is that, you know, you feel like, okay, we've shut Russian oil out of our system. We're not buying any Russian oil. Of course, we're buying Saudi oil and all sorts of other sort of criminal regimes. But put that aside, it turns out even

that is not true because in particular, they trace to the Indian market. There's a lot of people who are happy to buy that discounted oil in India and resell it to us. They're transshipping it. At a premium and exploit the arbitrage. So we're not even not buying Russian oil. We're just buying it at a more expensive price. So congratulations to everyone for thinking that this was a great idea. And again, what we've said from the beginning is a lot of these effects were really predictable. They were really predictable. They were really predictable. I mean, you don't have to look back at distant history to see that, first of all, our sanctions regimes have not been effective in terms of, you know,

forcing countries to comply with our will. That's number one. Oftentimes, they end up punishing the ordinary citizens of those countries and not the regimes. They end up playing into the hands of those autocratic leaders who can say, hey, your problems aren't with me. Your problems are with the West who wants to destroy you. And that's exactly what has happened here. So it really is, you know, so bad at this point that even the New York Times has to admit it, Sagar. Yeah, absolutely. And President Biden is actually making a mistake. He is trying to tie the high gas prices directly to the situation in Europe. And he actually framed it that way. He's like, for all the Republicans who are criticizing me, are you saying that we were wrong to stand up to Ukraine or support Ukraine and stand up to Putin? He's directly tying the

two, which could spell big political disaster for him in the future. Let's take a listen to a speech yesterday. So for all those Republicans in Congress criticizing me today for high gas prices in America, are you now saying we were wrong to support Ukraine? Are you saying we were wrong to stand up to Putin? Are you saying that we would rather have lower gas prices in America and Putin's iron fist in Europe? I don't believe that. And you know what? If it was actually working

there would be a debate we could have a debate I still would be opposed we've talked about that but there would be a debate if this was actually you know degrading Russia's ability

to prosecute this war that is the opposite the literal opposite of what is happening so it's just dishonest at this point to tell the American people like oh you're paying high gas prices but this is helping Ukraine this is not helping Ukraine what is happening. So it's just dishonest at this point to tell the American people like,

oh, you're paying high gas prices, but this is helping Ukraine. This is not helping Ukraine. It's not helping us. We've effectively imposed sanctions on our own citizens. And the Russians are laughing as we've talked about those comments from Putin previously. I mean, just mocking the Biden administration and their policy. The latest from New York Times, that article we had before, Alexei Miller, who's the head of Gazprom, the Russian energy giant, quipped at an economic conference, the same one that Putin spoke at in St. Petersburg last week, that he bore no ill will against Europe because even as the continent's imports of Russian natural gas fell by, quote, several tens of percent, prices rose several fold. Here's the money quote. Quote, I won't bend the truth if I tell you that we bear no grudge. It's like, yeah, we're good. You did

nothing. Putin actually spoke last night at the BRICS conference. So for people who don't remember, the BRICS was like a concept made up in 2008. It's like Brazil and Russia, India and China, as well as other some developing countries. And at that, he actually vowed, number one, in order to reroute all Russian exports to BRICS countries, including China and India, the two largest markets, not only oil, but everything else. But number two, and this is even more important, is they are working on a unified currency or type of system in order to be able to trade oil off of the US dollar. So either price it in yen to ruble, in rupee to ruble, and find some medium exchange. So they're moving themselves off of that. They're working to try and create an alternative oil market,

which they will unambiguously pay much less in China, India, and as you said, probably just rip us off in the interim. I guess I can't blame them. I'd probably do the same thing. Oh, I don't blame China and India at all. Not at all. You put that together, it's not working. As we said, on the battlefield, Ukraine is continuing to suffer. I mean, they are urging people in the east in order to leave. There has been a tremendous amount of civilian and military casualties. We don't know what the Russian casualties are. We do know that many of these cities remain besieged and that overall,

the military picture for Ukraine is not good. So on the battlefield, things are not working out. I do again want to present the counter argument, and this is what everybody says. Yeah, but in two or three years, the Russian oil business is going to really suffer because they won't be able to get the parts that they need. And my response to that would be, okay, so number one, are we supposed to pay $5 a gallon for two to three years in order to secure the integrity of Eastern Ukraine? Because that seems kind of crazy. Number two is that in two to three years, the military situation will be completely different. Russia has the benefit of not having sky-high gas prices right now and a rapidly evolving situation on the battlefield. At this point, we have shipped everything to Ukraine that we possibly could absent being able to get into an actual war. If they can't get it done with what we've sent, it's not going to happen. Like, let's just be honest here. And so we then need to move things towards a diplomatic situation. is that there is no appetite in the West for considering the grand strategic picture.

We need to align the incentives for President Zelensky to know that he will remain secure in power, that he will remain and continue to have Western aid, and that all of that will be there if he continues with negotiations. Frankly, even more. And instead, the opposite incentive is that the more bravado and stuff that they present, the higher the amount of dollars that gets more bravado and stuff that they present, the higher the amount of dollars that gets sent over to the Ukrainian regime. So we really do need to consider like grand strategic what we're trying to do here. I mean, just to put it really simply and directly,

we have higher gas prices. We have a worldwide hunger crisis caused in part by this war, in part because Russia's unconscionable actions, in part because of our own response. There are a lot of developing world nations that are unable to purchase the grain and fertilizer from Russia that they normally depend on and are especially depending on now because of our bank sanctions on Russia makes it effectively impossible. So we've got gas crisis, food crisis, Ukraine is losing, and Russia richer than ever. Tell me what part of this policy is working. Tell me what part of the policy is working. I mean, and then to your point, you're like not allowed to say that or people freak out. If you say, hey, we need to figure out how do we get to the negotiation? How do we wrap up this war in the interest of everyone,

especially the Ukrainians? You think they want to be at war for three years? You think they have time to wait around for the sanctions to start to bite three to five years from now? I don't think so. So when you say anything that contradicts the mainstream bipartisan consensus of we just need to keep sending in the military and we need to keep trying this economic warfare, which is completely boomeranged.

Even the New York Times is admitting it. You get massive backlash. And that just happened in Germany in a pretty interesting instance. Let's go ahead and put this tear sheet up on the screen. So this says, Schultz advisor turns heads with appeal to consider the future Russian relationship. That's really all that he said is, hey, maybe we should think about whether we want to make Russia a pariah state. This is my interpretation of his words. I'll tell you his exact words in a minute. And massive backlash. So here's this article. They

say German Chancellor Olaf Schultz's top foreign policy aide raised eyebrows Monday night when he suggested Europe should focus more on preserving long-term relations with Russia and less on the specifics of German tank shipments to Ukraine. In a rare public appearance, Jans Plotner, do you think that's how you say it? I think it's, yeah, probably Jans. Jans, Jans, I don't know. A longstanding architect of Berlin's Russia policy argued that the debates over Germany's military support for Ukraine, which is frequently criticized for being too hesitant and slow, were, quote, driven by a feverishness that misses the bigger questions in many cases. No lies detected.

Specifically, he pointed to a long-running saga over whether Germany should supply the Ukrainian military with so-called martyr infantry fighting vehicles, which Scholz has so far refused to do. Here's the quote. You can fill a lot of newspaper pages with 20 martyrs, but larger articles about what will actually be our relationship with Russia in the future are somehow less frequent. And that's a question that's at least as exciting and relevant, which could be discussed and where there could also be a public discourse. He also called for a softer approach toward China and argued Ukraine should not be granted any rebates on its bid to become an EU member just because it was under Russian attack. He said just because you are under attack, you don't automatically improve on the rule of law.

OK, so he didn't even say don't send, you know, this martyrs, whatever these things are. He didn't even say, Hey, we need to focus on like, we need to have a day time with her. We need to have a warm relationship. He just said, Hey, maybe we should be discussing this. Maybe we should be exploring this in some newspaper articles. Massive backlash had to walk back the comments. There was a whole freakout over it. The West was very upset with him, and Washington was very upset with him. Here is the basic truth. They have a lot more to lose than us, so maybe we should follow their lead. No, they have, what, they're like a couple hundred, I think like a thousand miles, whatever, away from Russia. They fought several wars with Russia.

I'm going to presume that they know what's better for their security than we do. Maybe that's a crazy thing. There's a lot of talk of allies and allyship here in the United States. Aren't you supposed to listen to them and be like, what do you guys want? Tell us what it is. Why are we imposing our will on a situation that has negative impact on us, quite literally, whenever it comes to that? Also, the energy situation in Germany is a catastrophe. If you care about the climate, Austria, Germany, Italy, and the Netherlands are resurrecting coal-fired power plants as of right now in order to move towards bringing more energy domestically. So as a result of denuclearization and reduced natural gas imports from Russia, Germany and Austria and the Netherlands, Germany being one of the largest, I think the largest economy in continental Europe, is now going to have to produce significantly more coal-fired energy in order to meet their goals, which is terrible for the climate. Also, people don't

know this, coal is very expensive. It's actually not cheap anymore compared to many of the other instances or many of the other alternatives. So consider this, people are paying sky-high gas prices and the energy that they're going to use in order to heat their homes in the middle of summer and then come winter, because we all know that that's going to happen, in order to heat their homes in the winter and cool their homes right now is going to be filthy coal-powered energy. So consider the broader impact of that. That is a catastrophe. And listen, the Germans have made a grand strategic decision that they want to continue some sort of commerce relationship with the Russians. I think that that is broadly the Germans' business. To the extent that I make fun of them, it's for taking offline

their nuclear power plants and for saying that they don't want to do so. So maybe they'll consider some of that, I guess, though. The Greens, you know, if the German Greens don't denounce this more than they denounce nuclear, they are truly full of shit. But whenever you consider the broader implication, we have to have energy here in America, that we're going to talk a lot about that today with the gas tax and oil. They need it in Western Europe as well. These are still developing countries, or these are developed economies. Like they have a certain standard of living in order to meet the most basic baseline. And on top of that, you consider, you know, peace between the great powers on the continent.

Yeah. All of that seems very important. I'm not saying the situation in Ukraine isn't important. We have to take stock of what it all is, what's happening, consider the Ukrainians' interests, and ours. And we should never subjugate our own interests under what is for Ukraine first. Well, it's not clear to me that the policy we're pursuing is good for it. Yeah, I don't think it's good for anybody. But I'm saying even if it was, like, I would still.

It's been good for the Chinese. They're getting a good deal on gas. It's been good for the Indians who are getting a good deal on gas and are able to sell it back at a premium to us. So I can't say it's not been good for everybody. Although, you know, India also one of the countries that will be impacted by the rising price of food. So, I mean, that's not costless either. But, you know, I do want to say one thing about the gas tax holiday that now

has been proposed, is being pushed by the Biden administration before we move on here. And Sagar's going to be talking about, we're also going to be talking to Skanda, who's done a lot of thinking about how we could get gas prices under control in a very sort of like thoughtful and nuanced way. But Biden has decided to lean into this gas tax holiday idea, which, number one, is not likely to have much of an impact on what you pay at the pump at all. So it's like impotent. Number two is basically a subsidy to the very oil companies that have like, you know, had these massive record record breaking profits. But the only thing they want to do to it is like make rich people even richer. So number two, it's a subsidy to them.

And number three, he has to get this through Congress. Congress already said this isn't even— It's not going to happen. They've already voted on gas tax, yeah. So what are you doing? I mean, you're proposing this policy that's like an impotent subsidy to the oil and gas companies that's not even going to pass. What we're talking about here with Ukraine, while, of course, Putin's price hike is in

everything that's going on with inflation or with the gas markets, it is true that our ban on Russian oil is certainly having an impact on the cost of gasoline. This is something that is completely in your power. And, you know, he likes to pretend like we can't do anything about it or that if you're arguing against it, you hate Ukraine, when the reality is it has had the polar opposite effect of what was intended. And I just wish they would be honest about that. Hey, we tried it. It didn't work. Let's try something else. How about that? I completely agree. I mean, at the very least, give some people some hope somewhere. But if you say that this is all tied up with Ukraine,

like you're not going to like what the answer to that question is a year from now, whenever you're like, hey, how much longer do you want to pay $5 a gallon at the pump in order to make sure that the border of the Donbass is slightly different than it is than one year ago? I mean, these are not questions, you know, we didn't live in democratic societies in World War I absent the United States. And a lot of those countries found out the hard way in terms of their domestic politics that a lot of people were like, yeah, why are we spending millions of people to die

in order to make sure that like the French border moves a thousand feet? You know, these are all questions which have to get democratically resolved. And if you are a supporter of the Ukrainians, the last thing that you probably want is for the US domestic populace to turn against it and just say, you know what? Peace at all costs. We don't care anymore if this is going to be the impact that we have over here. And I very much see that that could

be the case, both on history and, look, it doesn't take a genius politically in order to figure that out. All right. Let's talk about the primaries that happened on Tuesday. Let's go and put this up there on the screen. So we'd been taking some note of what was going on in Alabama. At the last minute, it seemed that Mo Brooks, the congressman there, might have been able to pull off some sort of upset win. You'll remember he was endorsed by Trump, then unendorsed by Trump. He went woke. Going woke. And by woke, he means we need to move on from the 2020 presidential election and did not commit to investigating and possibly trying to replace President Biden whenever he became a senator, just to give you an idea of how batshit Trump's criteria for endorsing certain candidates are. Anyway, so he moved on to Katie Britt. So she's a 40-year-old.

She actually beat one of the youngest members of the United States Senate. She's a former staffer there. She was definitely the pick of Mitch McConnell and of many of the other establishment types here in Washington. And she overwhelmingly won the runoff election. So that was a victory for Trump, just to show that he could endorse somebody, unendorse somebody, and then endorse somebody else, and that they would be completely fine. However, in the neighboring state of Georgia, it did not work out that way at all. Let's go ahead and put this up there on the screen. So two of the Georgia runoff races that went to the ballot actually went against Trump, which is really interesting. So we have here in the Georgia 6th District, Rich McCormick, and in the Georgia

10th, Mike Collins. Now, they were not endorsed by Trump, but I think that the reason that we put this tweet on there that people need to understand is that, yeah, maybe Trump's endorsed candidates in the Georgia GOP didn't win. However, the two guys who did win, Rich McCormick and Mike Collins, are still pretty hardcore MAGA. So it's not like they're electing liberals in the state of Georgia, but they are not taking their marching orders from Trump in the same way. And I think that there, again, has to be a lot of analysis as to why this is occurring in different states. It's not like the Georgia Republicans are all that more MAGA than the Alabama Republicans, Right. Or maybe they are.

In Alabama, I think, again, that it comes down to the idea of being hostile to Trump. If you appear hostile towards Trump, then that's something that you're going to get punished for. If you just criticize him or you don't engage with his criticism at all, a la Brian Kemp and Brad Raffensperger and others, then you will survive. The Georgia Republicans will say, you know, I'm going to think for myself and I'm going to stick with you. So I think that given that these guys who beat the Trump runoff candidates weren't endorsed by Trump but were still very MAGA in their affect and more, Georgia Republicans were like, like you know maybe trump got it wrong in this particular case but if these guys were pro-impeachment or you know like a mitt romney type i don't think that they would win so it's a very very tricky dance in order to try and win these primaries at this point i i don't know that i can apply one like rule i don't know yeah i don't

live there i mean we also we looked at south Carolina. There was one pro impeachment person who won and one who lost the neighboring district. It's like hard to really look at all of this and apply one single rule. candidates said, how hard Trump went against them, what is the state. Georgia seems to be particularly independent-minded about who they decide to support. Could be, this is total speculation, could just be because they were at the center of so much of the Stop the Steal stuff and people had to make up their minds for themselves how they felt about this and how they felt about these candidates. They knew the governor was, you know, very, very conservative in terms of what he had actually done in the state. So that gave them kind of an ability to separate out who the candidates are from whatever Trump is saying. Alabama, the other thing to remember

about the Alabama race and Mo Brooks is even though Trump like put out the statement saying, oh, we went woke and here's why unendorsed. The truth of why he unendorsed him is because it looked like he was losing. Yes, that's right. And the reason why he endorsed Katie Britt is because it looked like she was winning. So then you can't really read that much into it when he's just jumping on the train that already is, I don't know what a train. It's coming into the station first. We'll deal with that. Anyway.

I don't know what a trade. Coming into the station first will do that. Anyway. I don't know about that. So I just look at all of these and it's hard to really, it's hard to suss out. Certainly one thing you can say is that Trump's endorsements do not reflect any sort of consistent ideological agenda. There's no doubt about that. It's a weird combination of, you know, who said nice things about him, who's on board with Stop the Steal, who does he just think is going to be a winner so that he can, you know, so he can jump on board. The Oz one is also turning out to be strange in Pennsylvania. Obviously, Trump very instrumental in securing the Republican nomination for Oz. I think at this point it's quite clear he would not have won that Republican primary without Trump's support.

Because there's even more polling coming out of Pennsylvania that continues to have Fetterman with a lead outside of the margin of error. And even worse, Oz's approval rating way upside down. It's a disaster. Because he just hasn't, he obviously is extremely unpopular with Democrats, unpopular with independents, but also has it locked in the Republican base. So you can see in that one, you know, Trump really, his force being the thing that pulls this nominee over the finish line but ultimately may not work out for them in the general election. Yeah, let's move on to that actually because I think there's a lot to say here in the context of Ron DeSantis. Let's go ahead and put this poll up there on the screen.

Shock poll, absolutely, out of the University of New Hampshire. And this is actually a very good poll, even though it does have a relatively small pool of the people that it is asking from the sample size. Now, here's what they say. Likely New Hampshire GOP primary voters. Ron DeSantis, 39%. Trump, 37%. Pence, 9%. Haley, 6%. Pompeo, Noem, Cruz, all at one. But consider it in terms of last October. Trump, 43%. DeSantis, 18%. Haley, 6%. Pence, 4%. Cruz, 2%. Noem, 1%. And I think what's even more fascinating is the matchups show that in that same poll, Trump versus Biden is Biden 50, Trump 43. DeSantis is 47, Biden 46. DeSantis a far more formidable candidate there, which I mean, I personally do think DeSantis would easily beat Biden in a general election matchup. But what's even more fascinating to me is about the

GOP media assessment and how people are looking at candidates. So Fox News viewers, DeSantis, 46, Trump, 32. Conservative radio, DeSantis, 50, Trump, 34. Okay, so there is a lot, I think, to say about this. Number one, maybe we're completely wrong. I don't know. I personally thought anybody who runs against Trump is nuked and that people, even as everybody says, oh, I want to move on, I just thought, look, a lot of these GOP people, they love Trump, you know, they'll basically follow the man till the ends of the earth. However, I think that there is something to be said here for a lot of people who love Trump but understand that they themselves and the country were exhausted of him and think,

hey, you know, this DeSantis guy, he might be able to win. So if the narrative, and I think this is all narrative dependent becomes crystal, just like with Biden, where the media framed Biden as the only guy who could beat Trump. Yeah. If DeSantis gets that imprimatur by the media and by others, GOP voters might say, okay, I'll back Ron DeSantis because I think that he will be able to beat Biden in a general election matchup. So you think the electability argument may win? Yes, I think the electability, maybe, maybe. And I think that the other part of it is that it all comes down to Trump and his performance. So if he's going to be obsessed with Stop the Steal, which we know that he is, if he is going to be centering his central case to the American people on his own personal grievances versus the grievances that they have at home, then I think that is a is that Ron DeSantis would say, Donald, you did a great job.

Now I'm trying to take the mantle and we need to beat President Biden and end this disaster for the country. And he never engages him in any real criticism. As I said, you can't appear hostile towards Trump. And at the same time, Trump, yes, by lobbying bombs at DeSantis, is obsessed with Stop the Steal and all of that, and showing us that he's just an utter narcissist and not actually fit to be the commander-in-chief. In that realm, I think it's possible, although still very fraught, for DeSantis to be able to win. However, I think that Biden is such a disaster that Trump can combine his political appeal and knowledge of targeting the gas price continually, of making fun of Biden for being old, which, you know, he gave a speech where he's like, I make this promise to you.

I will never, ever ride a bicycle. I'm sorry. Like, that's funny. That's funny. Okay? He will definitely keep that promise. Right. So if he keeps that, yeah, I don't think he physically is capable.

He's probably never ridden a bicycle in his life. Whatever. So if he continues, if he hammers Biden on gas, if he, you know, makes fun of his infirmity and spends the majority of his time on issues that connect with the broader electorate, the Republican base, in addition to his stop the steal nonsense, then it's possible. So it's all about balance. I don't know how this is going to work out. Trump is also just, he's such a force head to head and he knows, I mean, he just knows how to humiliate people. Remember, I mean, remember how those Republican primaries played out. Just one person after another, he would humiliate and destroy and make them look like complete

cucks to use, you know, the sort of like visceral language. And so I just, it's hard for me to imagine how it works out being like, I have no real critique of this person. I just want to be president instead. I don't see how that works out. Now, I did see Nate Silver, for what it's worth, I want to give the other side of this. His analysis was like, look, in 2016, you had this extremely divided field, and Trump was able to win with relatively low vote threshold. He would win with like 30%. Right. So now if you have one main alternative, that's a different dynamic than 2016.

But, of course, 2016 was before he had been president and before he had really solidified this extremely loyal following. So it's just hard for me. I am very surprised by this poll. And the other thing that's interesting to me about the poll is it wasn't that Trump fell off by a lot. He lost a few percentage points from where he had been in October. It was that DeSantis had really surged. So people had gotten to know who he was. I sure like the liberal media talking about him freaking out, I'm sure that helped his hand a lot. And conservative radio, Fox News sort of leaning into DeSantis. That's definitely bolstered his image among the Republican base. And then the other question is, how much is New Hampshire reflective of the broader country? Because it

is an unusual state. And so you could see them having sort of a different take on the race or different inclinations in the race than other states. And we see that in primaries all the time where the result in New Hampshire would be different than what comes out in other states. So I am still extremely skeptical of how this would work out. Because, again, how do you defeat a candidate that you are afraid to criticize? Yeah, I know. And Trump is not going to be afraid to criticize him. You know that head to head. He's going to lob everything possibly can.

And Trump, you know, he is a formidable candidate. Yes. He is very, very talented in those head to head, live in the moment, you know, response debate situations. He is extraordinarily effective. So I continue to find it hard to believe. And I just also don't think Republicans have been turned into the little like mini pundits that the Democratic base has. Republicans with Trump, I mean, they went with the guy that they wanted,

you know, prognosticators be damned. So I also haven't seen from them this same like, let me weigh what the moderate suburban woman is going to want in a candidate that I've seen out of the Democratic base. And DeSantis is thinking strategically. So let's put this on the screen. He has declined to ask Trump for his reelection endorsement, which is about as big as an FU in the state of Florida, considering that Trump lives in Florida. Also, this is where I just don't, so I do think DeSantis is going to win. That being said, apparently the polls are like roughly tight. Look, in general- Wait, for governor, they're tight? For apparently for governor, they're tight. Oh, I'm surprised by that, actually.

Ish, you know, within a couple of points. Look, Florida is still a relatively split state. So I don't know how it's going to work out. I'm under the presumption I think he's going to win. He's been dramatically popular there from what I have seen in terms of his actual favorability ratings and all of that. So if DeSantis does win re-election without the endorsement of Trump or the re-election endorsement of Trump, and there's no way in hell Trump is going to endorse him without DeSantis groveling on his knees and asking, that is proof positive that you can win. He's from one of the biggest swing states in the country. I do think on the stage, though, where things could get formidable is, and I read this with great interest, the New Yorker's Dexter Filkins, who I love, was a great war reporter, just went ahead and profiled

Ron DeSantis. There were some liberal annoyances within there, but he was able to secure an interview with Trump to talk about DeSantis. And what's the only thing that Trump said about DeSantis? He was nowhere. I endorsed him, and that's the only reason that he won. So that is going to be a very potent thing that Trump would have on the stage against Ron DeSantis if Ron is trying to say that he is more electable than Trump. Another thing that came out on the profile, and this stuff does matter and will show up on the campaign trail, apparently DeSantis does not like to do retail politics. Like, he really doesn't love to get into a room in a diner and suffer through, you know, like shaking. And listen, I like, I could probably, I get why somebody wouldn't want to do that, but then you

probably can't be president because being president means being able to suffer through a lot of, you know, events and things like that. You know, Even Trump in the Iowa and the New Hampshire days, he was in those diners doing the photo ops and more. And DeSantis is not as magnetic of a media figure as Trump is. So he would actually, look, for DeSantis to win, he would need to win Iowa or New Hampshire. Both of those require a tremendous amount of bullshit, egg rolls, caucus, fair, butter cows. Chicken dinners. Yeah, chicken dinners. All this nonsense that we have baked in to our political system. That's the only shot he has in order to win those, in order to then have the momentum coming in to Super Tuesday. So if you consider that and that's not his forte,

that's another knock against him, I think, too. Yeah, I think that's right. I don't know what's going on. We haven't seen him. I mean, there's been a lot of national media knock against him, I think, too. Yeah, I think that's right. I don't know what's going on. We haven't seen him. I mean, there's been a lot of national media interest in him. But there hasn't been a lot of national media display of his sort of like political capabilities in that way. He's good with the press in Florida. But look, I mean, the people here, they're vultures. Like if you, no offense to the Florida press, but, you know, the Washington press are vicious. They are much better at getting them to slip up.

We've never seen really DeSantis in that light. I do want to say I think it is smart of him to not ask Trump for the endorsement. And they quoted someone in the stories like familiar with Trump's endorsement process that was like Trump would endorse him if he asked. But you know that endorsement would come with some sort of like ritual humiliation to take DeSantis. He might endorse him. But only after he like forces him to publicly grovel or takes him down a peg in some sort of way.

So DeSantis not opening himself up to that possibility. I would love a world where GOP voters would choose Ron DeSantis over Donald Trump. I just don't think. I would think it would be better

for the country. I think it would be better for a lot. But I'm still skeptical that it could happen. Although I'm less skeptical than I was the last time that we covered it. So that's where I'm at.

We'll keep an eye on it. At the same time, we're getting some more official details that are supposedly accurate about what happened with the Uvalde massacre. particular, a Texas police commander says that after analyzing the response, analyzing body camera footage, which by the way, they are blocking the public from getting access to any of these details. So we're just having to take these people's word for it. So grains of salt on all of this. But according to their timeline, they are saying that these officers could have neutralized and taken out this mass murderer in three minutes. Three minutes. Let's take a listen to a little bit of that. Three minutes after the subject entered the West building, there were a sufficient number of armed officers wearing body armor to isolate, distract, and neutralize the subject.

The only thing stopping a hallway of dedicated officers from ending room 111 and 112 was the on-scene commander, who decided to place the lives of officers before the lives of children. That's what it comes down to. That is what it comes down to. You see those photos, Crystal? Those guys, they had semi-automatic rifles, they had body armor, they had ballistic shields. They had the thing to pop open the door. And also, by the way, it turns out the door was unlocked, so they didn't even need that.

But if they did, they had it. All of that. And just to give you guys an idea of how insane things were, let's throw this on the screen. Eva Mireles called her husband. She was one of the teachers who was killed. Her husband was a police officer. Said she was shot and she was dying.

And when he tried to save her, he was detained, had his gun taken away, and he was escorted from the school. Now, at the very least, we have some good news right now, which is that Pete Arredondo, the guy who was the head of the police department of Uvalde CISD and made the call to not go in and to take down the shooter, has been relieved, placed on a leave of absence as of yesterday. However, he remains crystal on the city council. And listen,

I mean, I don't really know how the law works. I think it's a good reminder right now, by the way, that the Supreme Court says a cop has no obligation to protect you. So you should actually keep that in mind. Given everything, I do not see how, at least in moral justice, that the man who made that call, Pete Ardondo, should not be prosecuted in some form. And if that is not allowable under law, somehow needs to be civilly held accountable for what has happened here. Because you could see those officers outside. You could also see the Border Patrol guys.

By the way, everybody's lined up. They're all G.I. Joe'd out. because you could see those officers outside. You could also see the border patrol guys. By the way, everybody's lined up. They're all GI Joe'd out. I'm not, no disrespect since those guys are actually the ones who went in and killed the gunman. But I'm saying the guys who were there on the scene, you could see the picture. You could see the timestamp up in the corner, had everything they need.

I've had a lot of cops message me saying, I would have gone in with my service revolver, or my service pistol. No body armor, nothing. I would have gone in. That's my job. That's what I signed up for. And yeah, I don't know.

I mean, you see the photo, and you see these stories about Eva Morelis, his husband. I can't imagine. I mean, imagine him. What is that guy going through? And he was not just a police officer. He was a police officer for that school district.

Yeah, right. And they stopped him and took his weapon and forced him out of the school. He was the actual, the one good guy with the gun that wanted to do something. Poor guy. And they did. I can't imagine how he goes forward. I mean, it's just so horrifying to imagine. And some of the details, they released an official timeline that had some of the dialogue between these officers.

And it is as bad as you imagine with regards to Pete Arradondo. I mean, he really was, at least according to what they're telling us. And there is a massive statewide cover-up trying to block journalists and the public from having access to these records on their own. But according to what they're telling us here, you've got, you know, first of all, the three minutes. Within three minutes, they could have taken this guy out. That's number one. Number two, they have at 11.56, an officer asks. He says, y'all don't know if there's kids in there? If there's kids in there, we need to go in there, this DPS agent says. The officer replies, whoever's in charge will determine that. So it's this like bureaucratic blame shift. It's not my responsibility. It's not my call. I'm just going to defer to ultimately, I guess, Pete Arradondo.

Then at 1223, Arradondo says, we've lost two kids. The walls are thin. If he starts shooting, we're going to lose more kids. I hate to say we have to put those to the side right now. Basically saying we have to sacrifice all of the children that are in those two classrooms. That's our only option here. That's all we can do. At 12.27, he actually says, people are going to ask why we're taking so long. We're trying to preserve the rest of the life. He actually says, people are going to ask why we're taking so long. We're trying to preserve the rest of the life.

There were kids, and this teacher too, by the way, who were bleeding out on the floor. There were other kids who had not yet been shot. We know this at this point. One of the teachers died on the way to the hospital. A few minutes could have saved that life. Some of them have been crippled for life. Yeah, that's exactly right. Nothing. 1228, he said, we have master keys and they're not working. The door was unlocked and they had the crowbar thing to pop it open even if it wasn't. And then finally at 1230 said, okay, we've cleared on everything except for that room. We're ready to breach, but that door is locked. And when he finally, finally allows the

border patrol agents to go in, he's like, you all can do it if you want to. I mean, it was no, it wasn't like, get in, we got to go. I guess if you guys want to, you can go in. It's completely, it is just so astonishing. And then the fact that, you know, there's this cover of not allowing the public to see for themselves after all of the lies and manipulations that they've been caught in one after another. There was another piece of the saga, which is Texas Governor Greg Abbott, who at this point is also implicated about the lies that he had been told initially. And they released his handwritten notes saying, you know, what they told him specifically had happened, including some of the things that we know now are blatant lies. Arradondo was in that room. And when Abbott was being given this list of lies, could have spoken up at any time to clear up the record. No, none of that ever happened.

So it is unconscionable. You know, the other piece of this is they are planning on now demolishing this elementary school, Robb Elementary School. Go ahead and put this last piece up on the screen there, guys. Which, you know, I understand I certainly wouldn't want to send my kid there again. But you damn well better get all the evidence out of that school before you demolish it, especially when you've got like a pretty clear reluctance to show the public anything. And then the news we get is, oh, we're just going to demolish the school right away. Okay. Some cover up vibes, you know, basically here. Listen, it's difficult to find and summon

the words. Like, yes, it is. These guys need to be held account in the strongest possible way. I was actually thinking about it. You know, 150 years ago in the frontier days of the Old West, Arredondo and the guys who held this up would have got what's coming to them. And, you know, that's the region.

And these kids are dead and the elementary school is now going to get demolished. The city itself is going through this horrific trauma. The attorney general seems to be nowhere, not doing anything. I don't know why somebody can't just stand up. It's God's plan. I don't know why somebody can't stand up for Texas.

I don't know why. Somebody needs to pay is really the only answer that comes out of here. But we do have details also on Washington and the gun bill that passed last week. In terms of Washington's response, to my surprise, they actually look like today they are set to overcome a Republican filibuster to push forward with this bipartisan gun bill. Go ahead and put this up on the screen. We've got bipartisan, this is from the New York Times, bipartisan gun bill clears initial vote in the Senate. The 64 to 34 vote came just hours

after Republicans and Democrats released the text of the legislation, which could become the most significant overhaul of the nation's gun laws in decades. Now listen, there are not a whole lot here, but it is something, okay? So let me read to you some of the details of what's in this 80-page bill, which again is expected to overcome filibuster today because you've got

somewhere around 14 Republicans who are supporting it. So the 80-page bill would enhance background checks. Specifically, they would give authorities up to 10 business days to review the juvenile and mental health records of gun purchases younger than 21. So they're not being banned, but they are subjected to a more extensive background check review. It would direct millions toward helping states implement so-called red flag laws. So not a national red flag law, but if your state wants to implement a red flag law, the government will give you some money to help you with that. And just as a reminder, the way they describe that here is it allows red flag laws allow authorities to temporarily confiscate guns from people deemed dangerous as well as other intervention programs. Okay. Would also, for the first time, make sure that serious dating partners are included in a federal law that bars domestic abusers from

purchasing firearms, a longtime party that has eluded gun safety advocates for years. I actually think that might, that in the juvenile background check piece, probably the most significant changes here in terms of reducing the number of deaths by guns in this country. You also have millions of dollars for expanding mental health resources. I read through the specifics. It's not that much money. It's not a game-changing amount whatsoever for the mental health piece. It looks like a bit of a, you know, kind of a throwaway sort of a situation.

And the legislation would also toughen penalties for those evading licensing requirements or making illegal straw purchases, buying and then selling weapons to people barred from purchasing handguns. Depends on how that's implemented. That could make a difference because we do know that an overwhelming number of guns that are used in violent crime come from a relatively small number of gun dealers. So that's basically it. Again, to the point of the mental health piece, just to give you the specifics so you can judge for yourself whether this is significant or not, they're going to provide $60 million over five years to provide mental health and behavioral training for primary

care clinicians, $150 million to support the National Suicide Prevention Hotline, $240 million over four years for Project AWARE, a program that focuses on mental health support for school children, and $28 million set aside for trauma care in schools. So that's what we're looking at. Yeah. We've got billions for Ukraine, though, apparently. Yeah, right. And what, $60 million over five years for mental health and behavioral training. $12 million. Okay. So there, as I said, were, I think, 14 Republicans, 14 or 15, that support this bill. Well, they supported cloture.

I don't know if they're on record saying that they're willing to vote for the bill yet. Okay. Mitch McConnell is supporting it. And notably, John Cornyn from the state of Texas has also not only supported it but was involved in the negotiations. He is getting hit by Trump for that. Let's go ahead and put this up on the screen. Trump blasts rhino John Cornyn for new gun bill with all caps ALARM. Take your guns away.

So here's Trump's take, his truth on truth social. Quote, the deal on gun control, which he puts in quotes for some reason, currently being structured and pushed in the Senate by the radical left Democrats, with the help of Mitch McConnell, RINO Senator John Cornyn of Texas and others will go down in history as the first step in the movement to take your guns away in all caps. Republicans, be careful what you wish for. So he's trying to make Cornyn pay over this. I mean, ultimately, it's very limited what this bill actually does. But, you know, I've said from the beginning, I think it's important that they at least do something to show that our nation is capable

of responding to a mass tragedy. Every single one of these provisions in this bill, I mean, you're talking about things that are overwhelmingly popular. I can't imagine that there's a single one of these items that polls under 75 percent. They're probably more in the 80s to 90s zone. So overwhelmingly popular. They actually looks like are going to get something passed. There's more Republican opposition in the House, but Democrats have the majority there. So looks like this is going to happen. Yeah, I think the net of the fact, frankly, is not that bad, even though a lot of Republicans are coming out against it.

Here's the truth. No red state is going to pass a red flag law, whether they get funding for it or not. So if you live in a red state, you're not going to have a red flag law. If you live in a blue or a purplish state, like I do in Virginia, well, we already have a red flag law. Same in Florida. Florida actually passed one. Well, they passed one in response to Parkland as well. I'm saying under the current system, I don't see any new red flag laws going into place.

So I'm like, okay, whatever. At the end of the day, these are state-by-state decisions. They're up to the state legislatures and to the governors. This is just providing federal funding. I frankly would have loved to have seen a lot more funding towards the mental health aspect. Me too, absolutely. I think that would have been the single most and possibly unifying aspect of the bill. I think it's kind of pathetic that we could only get $750 million for

it. We sent $44 billion over to Ukraine. You know, this just shows you where Congress, also everybody's a deficit hawk whenever it comes to mental health spending. Right. Ukraine, that didn't need to be offset. That was fine. So look, I wish there'd been more there. I do. I mean, I think the Republican base will revolt no matter what because of the red flag. I think John Cornyn is going to have some serious trouble and that people are not going to forget whenever he, because he wants to replace Mitch McConnell. When is he up for re-election? I think he's up sometime in the next two years. Sorry, no, no, no. He just won re-election. But the thing is about Cornyn is it's not that he's afraid of losing his seat. He wants to replace McConnell. He's been in Senate leadership for

almost a decade now and is basically mounting the bid. It's like him and John Thune who are kind of dueling for who will be McConnell's successor. McConnell's like 80 years old. And so whenever he's out, they think that Cornyn wants to take his position. I do think that his position here on the gun bill will give him some trouble with the base. That being said, the base hated McConnell for years, and he's also still remained the leader. Very true. So I don't know how it's going to work out. Do you know what Thune is doing on this?

John Thune voted against it. He voted against it. So there's a—he came out very strongly against it. So there is a divide in the Senate leadership. McConnell and Cornyn supporting cloture for the bill, and then Thune kind of staking his position out, frankly, with the majority of the GOP caucus. I think 37 of the Republican senators did vote against it. So there is a split, obviously. Yeah. I mean, I'm a little skeptical that this is going to really hamstring the Republicans that vote for it just because the provisions are so moderate and mild and relatively weak. On the other hand, I mean,

the way that Trump framed it is if you were going to make a big thing out of this, this is what the NRA is very good at doing also is saying, like, even these things that if you pull them individually, the Republican base will overwhelmingly be like, yeah, I'm good with that. When you turn it into like this is an attack on your Second Amendment rights without the specifics, then it makes it a much more potent issue. So we'll see how much they lean into this. I'm a little bit skeptical that this will ultimately, you know, really be sort of devastating for Cornyn or any of the other ones. Yeah, I don't think necessarily. In the interim, to me, it's just an interesting flashpoint. I'm like, huh, I wonder if that's going to affect his leadership chances. Like how the caucus and all of them are thinking about it.

I don't know if people think of him as a traitor or if they are just like, okay, whatever, this is what John wants to do. Yeah. In order to try and solidify his name. I mean, Manchin running in West Virginia, back the Manchin to me, which went further than what this does and still able to get reelected in West Virginia relatively easily. So I don't know. We'll see how it plays out. I think he will be fine getting elected in Texas.

It's his national profile, which, yeah, I'm fascinated by. Okay, some interesting comments from Elizabeth Warren recently sort of grilling Federal Reserve Chairman Jerome Powell. And as you guys know, some of the backdrop here is, of course, that because Washington is unwilling to act with regard to inflation, food prices, gas prices in particular, they've punted this thing to the Fed. As we've gone over a lot, the Fed is very limited in what they can do. Basically, what they can do is trigger a recession. I mean, that's effectively, they're openly admitting we got to get unemployment up, we got to get wages down. So the one thing that Washington has landed on to do to deal with what is, you know, mostly a supply chain driven inflation crisis is to hurt you and your pocketbook. So Elizabeth Warren, I think, here does a very effective job of drawing out that reality and what the Fed actions can do and what they cannot do.

Let's take a listen to that. Chair Powell, will gas prices go down as a result of your interest rate increase? I would not think so, no. Okay. And that matters because gas prices are one of the single biggest drivers of inflation. Energy prices overall drove a third of the inflation last month, but the Fed's tools, as you say, have no impact here. So let's look at another necessity, food. Price of groceries is up nearly 12 percent this year. Americans feel the pinch. No matter how much groceries cost, people still got to eat.

Chair Powell, will the Fed's interest rate increases bring food prices down for families? I wouldn't say so, no. Okay. So a Fed increase won't bring down these prices. So she goes on to press him on, what will it do? And of course, the answer is spike unemployment. So it caused you to lose your job, caused your wages to go down, and potentially trigger a recession. So you can't get gas prices under control. You can't get gas prices under control you can't get food prices under control this is what you can do and so you know saga i was looking at some polling that was being passed around about how biden's approval rating with young people is now at 25 and you think about i mean you just step back and you're like yeah their policy with regards to gas prices is literally to increase them through the russian oil ban as we covered earlier, and to lean on the Fed to effectively trigger a recession.

That's their policy. So it's a miracle anyone approves of what they're ultimately doing here. Yeah, and look, Powell destroyed so many of these talking points by Biden. He was like, no, it's not going to have any effect on food. No, it's not going to have any effect on gas. They were like, what about inflation? Is that a result of Putin? He's like, we had high inflation before the Russian invasion. So he is doing all he can. He has only control over interest rates. It's the president who has control over fiscal policy

and other policy that actually do something about this inflation, some of which he refuses to do, other than a stupid ass gas tax holiday, which won't even happen. So consider that. At the same time, here's what the elites want to do. They basically want to destroy the U.S. economy in order to bring inflation under control. Let's show this on the screen. Here's what Larry Summers is saying. And he's just saying the quiet part out loud. I don't want to target him specifically because this is what they all secretly believe. We need five years at 6% unemployment or one year at 10% unemployment, great recession level unemployment in order to bring inflation under control. And you know what? He's not wrong. He is not wrong that in the

current toolkit, considering that the Fed was the only policy instrument, that actually is the only way in order to do that. The problem is that 3% unemployment we're at now to 6% is, I don't know, tens of millions of people in this country? 10% unemployment? I can't even begin to describe our current economic condition and what that would mean for millions of not only workers, but their families and their dependents. People forget the fallout from the Great Recession. A lot of people just never went back to work. A lot of people had to drop out of the labor force, or they had to find underemployment, cash employment, or work in two jobs, lost a lot of benefits, lost their house, bottom fell out of the retirement portfolio, underemployed up until

the day that they could finally get Social Security earlier. You think that's not going to happen at five years at 6% unemployment? Millions would drop out of the workforce. Millions of people would opt for early retirement and near poverty wages. And by the way, it's not like the price of gas would go down either. Right. To the extent that gas drops, it'll drop to maybe $4. And that would not be based on supply, which is what we need to deal with. It would be based on the fact that people are too poor to drive. Right.

I don't want to live in that country. Correct. I mean, and this is the thing, too, is that even if the Fed triggers a recession and causes 10% unemployment, it's not clear that their actions alone will actually get inflation under control. I mean, Powell is admitting it there. Like, no, this isn't going to really deal with gas or food prices, which are the most painful parts of inflation for most people. But something that Skanda has been writing about

and also that Dave andanda has been writing about and also that Dave and Dan has been writing about is it's not just that the Fed will crush demand. And by crush demand, that means hurt you, right? Your ability to spend money. So your wages will be hit. You may lose your job, destroy your ability to buy all those things, right? So not only will the Fed's action do that, but it's actually not true that the Fed won't do anything on supply. Hiking interest rates will actually hurt supply because you will have some effects of less investment.

And that means less building, less houses being constructed, these sorts of things that, so if inflation is a mismatch between supply and demand, you're crushing demand, yes, but you're also going to cause some issues on the supply side, which could exacerbate the problem. So it's not even clear that the Fed's actions alone, without legislative action, without our government actually functioning, and without, you know, Biden stopped his idiotic policy with regard to Russia also, which is exacerbating the situation, they could actually make things worse. This is something that David Dan has been writing over

at the American Prospect. We can put this tear sheet up on the screen, sort of drawing this out. He says the Fed's crushing investment right when we need it. He writes, the Fed strategy might not cure the disease. It's hard to attribute inflation entirely to an economy running hot. When there hasn't been any economic stimulus in 15 months, fiscal policies now turn sharply negative. What looks to be the greater problem is a simple shortage in physical capacity to sustain a decent standard of living. The main pockets of inflation right now are in fuel, which is rising because of supply shocks from Ukraine, a bottleneck in refining capacity, food also stunted due to war, and housing damaged by a decade of underbuilding. Investment is needed

to deal with all of these categories, but thanks to the Fed, investment is now harder to do. Indeed, researchers from the Federal Reserve Bank of San Francisco recently concluded that problems other than demand account for about two-thirds of current inflation. And the only tool we are using is targeting demand, again, the thing that hurts you, when that is not even close to the majority of what's going on here. Well, David is right. I mean, we have to transform the American economy and the American stock market. We have to build more warehouse space in order to be more comfortable with inventory. We need more manufacturing capacity here in the U.S. so that we don't rely on globalized, just-in-time delivery. We need the ability in order to build resilience into the economy.

And that costs money. And that means investment dollars. When you don't invest and you don't have the capital to borrow, well, you're going to have to cut cost. And when you cut cost, you both cut investments and you cut jobs. And then when demand goes down, you have further revenue that's coming in the door, which affects your ability to borrow. So you're only becoming leaner. And shareholderism means that we're going to try and squeeze even more values out of the stock. The best way to do so is what?

Cut even more jobs. Cut more investment. So at the time when America needs investment more than ever, we are effectively choosing the opposite. And I think we should all take Chairman Powell's words to heart, which is he is admitting to us it will not affect either of the parties. That's right. And the sad thing is we had a lot of years at 0% interest rates to do this investment. And instead, companies bought back their own stock and issued dividends. And they didn't do the investment. The federal government completely hamstrung.

They didn't do the investment. So that's the other piece is we had this window of a decade to set ourselves up for the future so that, you know, and reshore capacity, all of those things, and we lost it. So it is, guys, I really think it's gonna be ugly. I'm very concerned about where we're headed right now. I think it's gonna be bad, unfortunately, as well. Okay, all right, let's talk about MSNBC. Things are bad, as we just laid out.

People need to be honest. I think that we are here on our program about what that means for you and elsewhere. And to try and speak to the pain that I know that so many tens of millions are feeling. Over on MSNBC, they have a different tactic. So they invited the Washington Post's personal finance columnist on. Here's her advice on why you shouldn't be worried about gas prices? There is a great deal of Americans where it is uncomfortable that they're spending more, but they are not gonna go under.

You know, you gotta stop complaining when there's so many people who literally the inflation rate means they may only have two meals instead of three. There are Americans who did extremely well in the last two years in the market. You still have your job. And yeah, it's costing you more for gas.

But guess what? You are still going to take that holiday, that 4th of July vacation. You can still eat out. So I'm going to need you to calm down and back off. Calm down, back off. You can still afford it. Consider the implications of what she's saying, which is that, listen, it's fine. You're still going to be able to live your life, so you should stop complaining.

Now, I grew up in a country in the 1990s where the overwhelming idea that we were all fed is that all of us were going to be better off than our parents. My parents came here while a lot of people still want to come here. That was kind of the underlying ethos of the American dream. This is basically sit down, shut up, calm down, back off. Also, just because you're still driving and want to pursue a leisure activity with your family after two years of being locked up, does that mean you should be penalized $5 a gas? Also, she was like, yeah, some people have to cut back from three meals to two. Do you know what that means? Do you actually know what that means? Because we do. We covered here, actually, about how even removal of child tax credit

means that millions of children are actually now on the precipice of hunger or are food insecure here in America. So this actually has serious implications. A majority of families are struggling to feed their kids right now. So I think she is not really in touch with how many Americans are at the edge or behind and struggling and already are at that two meals a day. I mean, we read those statistics about the number of parents who are having to skip meals so that they could feed their kids. Number of families who just literally can't make it and are already relying on food pantries. I mean, how can you be so out of touch with how much pain and struggle there already is and just sort of casually wave it away? I will never understand.

And this goes back to the Biden comments about like, oh, you know, we need to, we've, paraphrasing, but basically like, we got to accept the higher gas prices because we're going to stick it to Putin, which isn't even working. It's all for nothing. You're enriching Putin. You're making his regime wealthier than ever. The ruble's had its best year, you know, in a long time. It's the best concerning, performing currency in the world this year. So I don't know what to say, but this also goes back to the problem of how our journalists are, I don't know, I don't actually know this individual. I don't know what the rest of

her commentary is. I don't want to fully judge her based on this or what her bias, so this isn't specifically about her. But this also is part of a culture of elite journalism that only recruits from one class of society. And so you're in a complete class bubble and utterly disconnected from what it is like

for people on a day-to-day basis. Your personal finance columnist is zooming into national television. Do you not at least think about the conditions on which you're speaking and what that means to so many people? Yeah, I mean, I get messages all the time. There are some people who send me

the daily price of gas in their area. I'm like, I know, it's high. I get, you know, but I think the reason they're doing so is because we're one of the only people who are just gonna talk about it. Who are like, yeah, I mean, I can't imagine. You know, people are posting like half hour, 45 to a minute, hour long lines in Costco and still filling up their Toyota Camry for like $70. Like spending valuable time than having to spend crazy sums of money in order to fill up their car and be able to go to work. And the

poorer you are, the harder this is that's going to hit you. And let's say you're even middle class. Why do you deserve to pay $5? You don't. We live in a country with the promise of prosperity. It's been the promise of America since our founding and the expansion west and the great resources that have been bestowed and land and more. That was the idea of what we are. So I just think it's antithetical to all of that. It's a cruel message, unfortunately. And I think it does belie how a lot of people

in this town think about normal people. Yes, and it's often, nothing is the fault of elites who, oh, we can't do anything about it, when of course we've talked repeatedly about some of the things that could be done. And it's all, you know, it's all the fault of the common person. It's all the fault of the voter. They need to get their heads straight. That's all soccer.

Okay. Crystal, what are you taking a look at? Another week, another sign that the dominant political and economic order of the last 40-plus years is cracking up completely. So in France, Le Pen's right and Mélenchon's left both surged, delivering a stunning rebuke to Macron's center-right party. The horseshoe surge denied the French president an outright majority for the first time in 20 years. In Colombia, a leftist has been elected president for the first time ever in that nation's history in a runoff that featured a choice between a right-wing populist and a left-wing populist. The establishment figure had already been knocked down in shocking fashion in the first round of voting. Now, Latin America seems to be in the midst of a massive left shift with wins in Chile, Bolivia, Argentina, Honduras, and Lula looking pretty dominant right now in Brazil.

All of this seems to point to the decline of the economic model that has been foisted on our own nation and on the world, the model that puts capital over everything, which lionizes global trade that benefits corporations and disregards the impacts on human beings, that substitutes the workings of markets for, I don't know, actual values, the model that we all call neoliberalism. Now, honestly, I kind of try to limit my use of that word because I understand it can be an eye-glazer, but it is the best shorthand we have to describe the era of deregulation, low taxes, small safety net, and blind faith in the markets that has been the only real economic model on offer since the collapse of the Soviet Union.

Of course, the crack-up of neoliberalism has looked kind of imminent for a while now. Its seemingly inevitable destruction smacked us all right in the face with the rise of Bernie and Trump in 2016, which paired along with the rebuke of Hillary Clinton. You'd be hard-pressed to find a more perfect emblem of the bipartisan neoliberal commitment than the former First Lady, whose husband ushered through NAFTA, China's ascension to the WTO, deregulation, tax cuts for the rich, and ended welfare as we know it. And there are actually signs that the religion of globalization had been on the wane before Trump even came along. In Gary Gerstle's book, The Rise and Fall of the Neoliberal Order, he points out that total international trade actually peaked back in 2008. It predictably collapsed during the Great Recession, but it's

never recovered again to its pre-crash levels, as he writes, quote, 21st century globalization, in other words, may have crested and begun to recede before Trump took office. His protectionist policies may have been pushing open an open door. Protectionism had been a dirty word of political economy for 30 years. It no longer was, not for Republicans and not for Democrats. And yet, somehow, even as the neoliberal order was left for dead, Joe Biden became president and after some initial flirtations has fallen straight back into his neoliberal comfort zone. This is evident in floating a gas tax holiday, a corporate-friendly tinker that will do little for consumers and defers to the wisdom of the markets rather than taking any direct government intervention of the sort that leftists have been arguing for.

Oh, I forgot. He also sent a strongly worded letter to the oil and gas bosses. I'm sure that's going to do the trick. But there are reasons to believe that the Biden neoliberal moment might be more of a blip than a resurgent force. The current president might be serving in a similar transitional role as to what Jimmy Carter did. Carter was a transitional president between the flagging New Deal era and Reagan's era defining neoliberalism. Biden might be the transition between neoliberalism and whatever happens next. Because even in Biden's administration, there have actually been some signs of a shift away from that bipartisan consensus of the last 40 years. The repeated use of the Defense Production Act is one example, using that to use government power to compel

business to act in the national interest, the continuation of Trump's China tariffs, the push towards an industrial policy that would reshore some jobs here in the U.S. And beyond that, there are massive currents afoot right now that together are pretty likely to crush the neoliberal era, no matter how fast Washington tries to hold to that crumbling order. So first, as I alluded to before, neoliberalism reigned supreme at home and abroad in part because it was really the only game in town. The New Deal consensus, that was forged out of a need to compete with communism and the fascism. After the collapse of the Soviet Union, American-style capitalism was, with a handful of exceptions, the only ongoing economic project.

The rise of China's illiberal, state-led capitalism has created an alternative with elements taken up by ethno-nationalists around the world. The Green Party leftism on the rise in Europe and Latin America could provide another alternative. So neoliberalism now has a little bit of competition. And judging by the mass inequality, corruption, and institutional decline, Americans themselves no longer satisfied with that status quo. Second, the pandemic, it really did change and accelerate everything. It demonstrated the ability of our government to improve citizens' lives when they actually want to. It put the essential work of service workers and pink-collar workers on full display. That, in turn, has given them the boldness and public support to demand better conditions post-pandemic. It accelerated inequality with massive asset bubbles and stock market record-breaking gains while unemployment also skyrocketed.

It illustrated the false promises of globalization. After all, remember, the deal we were promised was, sure, your town and workers and small businesses might be crushed, but at least you're going to get cheap prices. Now, we don't even have the cheap prices. And we were left in the lurch when we realized absolutely essential items like mask gowns and semiconductor chips were all made somewhere else. Third, the war in Ukraine has also accelerated the trend away from globalization and caused a greater world fracturing with Russia and China on one side and the West on the other. Our imposition of a sort of new iron curtain on Russia is going to incentivize a lot of nations to shift away from the globalized systems that we here in the U.S. run and dominate. For us, the problems with relying on the rest of the world that were raised by the pandemic were also brought home further by the war.

And the final factor here is a real wild card, the Fed-engineered recession that we are staring down. As I discussed on Tuesday, the Fed policy will cause unemployment, misery, and death. It will also likely squeeze some of the fakery and mania that has driven markets for the last decade. We have all become used to, and many profit off of, an economy that is basically built on a fake foundation of Wall Street speculation. Firms that once invested in innovation, now they borrow money not to create new products, but to pay off their shareholders and goose their own stock prices. Venture capitalists feed endless cash into Uber and its many copycats, subsidizing unprofitable companies with cheap cash in the expectation that maybe one day

they can translate large customer bases into actual profit. Meme stocks and meme coins and NFTs get pushed by promoters who are getting paid in cash to convince the little guy they're hopping on board with the next big thing. When that fake economy crashes and the hollow, desiccated, vulture-eaten guts of the American economy are revealed for all to see.

I truly don't know what will happen next. But I have a feeling it's not going to be a neoliberal renaissance. Now, on the domestic political front, Republicans right now, we talked about this today, they're kind of grappling with how much they want to deviate from the neoliberal consensus. Will they just dress up some of their old policies and class-centric language and hope their stances and reaction to cultural liberalism is going to be enough to satisfy the masses? We already know what the Democrats want to do. They want to bury the Bernie left and its young, enthusiastic adherents, crushing them with admonitions that they must vote blue no matter who. They are betting that the person of Trump will be so odious and the two-party system choice so limiting that voters will have no option but to stick with Biden and his neoliberalism.

In making this bet, though, they are betting against history and ultimately sowing the seeds of their own demise. The curtains will close on the neoliberal era and no younger embodiment of the old order, not Kamala, not Pete, or anyone else is going to be able to save them. There are so many confluence of factors coming together. 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, sticking with the historical theme of the 1970s, I find myself thinking in this week, if there is a single problem that defeated Jimmy Carter in 1980, it was the gas crisis. Yes, this was precipitated and intertwined with his handling of the Iranian revolution.

But at its core, the election of 1980 was a rejection of the chaos in American life. It manifested itself in the most important form of gas lines, gas shortages, fights in the street, high interest rates, the feeling that the American dream was dead. Things aren't that bad yet here in the United States, but given that we've had about 50 years to ensure it would never happen again, and we're experiencing, I don't know, maybe 75% of what they did back then, I would say that's a pretty catastrophic failure. Now, with Biden, I've already described how he basically is Jimmy Carter, but worse. He's much older, he lacks the ability to learn from Carter's mistakes, which he was alive and in an office for, and to give the American people a visionary plan and confidence to rise up from the crisis and

emerge not only anew, but better off. As I've long harped on, the gas crisis and Biden's handling of it since the invasion of Ukraine has been an abject disaster. Him and his administration knowingly are constraining the supply of oil with Russian oil sanctions and are in the interim doing nothing to reduce the price of gas here at home. I've done multiple segments here about how to decrease the price of gas. You can watch them all in earlier segments. They'll be in the newsletter for premium subs. But to sum it up again, they all have to do with supply. Right now, we have high demand for gas and we have a major supply problem. The supply problem is a result of the Russian invasion of Wall Street investors not letting oil companies pursue exploration to recoup losses from over the last decade. Okay, it doesn't take a genius to say, well, nuking demand is bad because that means people's

quality of life will suffer dramatically, so let's just do everything that we can on supply. Not only has the Biden administration not done that, not only has their plan on supply been to genuinely ask oil companies to be, quote, patriots, they are now floating what could be one of the dumbest ideas of all time. President Biden is set to ask Congress to suspend the federal gas tax for the next three months through the summer driving season. Now, such a plan, if enacted, would save consumers just 18 cents per gallon. But at a deeper level, just think about it. The administration's big plan, which they've had nearly a year to come up with, just to try and save you a minuscule amount at the pump while stimulating demand in the peak season and then not doing anything about supply. It does not take an economist to figure out that this will

increase the price of gas further. It will hit demand when it's already hot, and it will do nothing about constraining supply. If this would work, I would advocate for it. But consider this. On June 1st, New York suspended its motor fuel tax of $0.08 a gallon, as well as its $0.04 sales tax on up to $2 a gallon. On a day, the average price of gas that day in New York State was $4.93. Two weeks after, what is an effective $0.16 per gallon DAX holiday went into effect in the state of New York, the price of gas was $5.04 a gallon. Furthermore, it pains me to agree with Jason Furman here, but he is correct. Right now, refinery capacity is already strained max to the max, meaning that the supply crunch has nowhere else to go. Most of the

reduction in the gas tax, and thus the subsequent spike in demand, would be pocketed by the oil companies. To the extent that consumers save anything, it would possibly be a few cents per gallon, which would then get erased by the subsequent increase in demand. This is the problem with nearly all Biden thinking on gas. And okay, let's say none of what I'm saying happens and the price remains static. Here's how much it would save a gas tax holiday went into effect. You would save $20 a month with a pickup truck, 18 with a full-size SUV, 15 with a mid-size SUV, 11 with a full-size SUV, $15 with a mid-size SUV, $11 with a full-size sedan, and $8 with the compact. I'm not going to say that's nothing for the average person.

But it is not meaningful enough compared to the $200 a month more in gas you're paying since Biden took office. For that to be your signature proposal so far, that is ridiculous. Here's the truth. You cannot do a damn thing about this crisis until you deal with supply. Repealing the gas tax won't really do anything. His other proposed so-called windfall tax on oil companies, look, I'm fine with the idea, but again, it misses the mark. If you take away the current profits of the oil and gas companies, then they're just going to have to cut costs, constrain supply, and other ways in order to pay back their investors who run the company.

That would only further increase the price of gas. I understand these things might feel good, they might sound good to somebody who doesn't understand oil markets. But what I really cannot get over is how this is just another sign of Biden's malaise. He had a year, an entire year, to develop a plan on gas. This idiocy is the best that the man can come up with. And here's the thing. It's not just me saying this. Gas tax idea has been around for a long time. Listen to what a certain candidate, Obama, had to say in 2008,

the last time this proposal was floated. I know that we're having a debate right now about the gas tax holiday. I know how brutal this having a debate right now about the gas tax holiday. I know how brutal this is on folks right now. And I know they need relief, which is why I've offered a middle class tax cut for every American, $1,000 for working families so that they can deal not only with rising gas prices, but rising health care costs and rising grocery costs. But for us to suggest that 30 cents a day for three months is real relief, that that's a real energy policy, means that we are not tackling the problem that has to be tackled.

We are offering gimmicks. He was right. He was right then. The fact that all Biden has left in his arsenal is political gimmicks per Obama is incredibly telling. I wish it was as easy as repealing the gas tax or an oil company windfall profit tax. It's not. It's actually very complicated. Somebody said once that the reason we elect presidents is because by the time a decision hits their desk, it doesn't have an easy answer. If it did, somebody below the chain of command would have answered it already. By definition, those problems which hit the desk of the president are ones which require thinking and ingenuity. Unfortunately, Biden is not rising to this moment. Like Jimmy Carter,

it is only downhill from here. The only bad news is that when he goes a downhill, so do all of us. And yeah, look, I mean, we're about to talk to Skanda Amarnath. And if you want to hear my reaction to Sagar's monologue, become a premium subscriber today at BreakingPoints.com. Joining us now, Skanda Amarnath. He's welcoming back to the show. He's the Executive Director of Employ America. It's great to see you, man. Thanks for coming back. Thanks for having me. It's great to see you, man. Thanks for coming back. Thanks for having me. It's great to be here. Absolutely.

So we talked to you three months ago about your plan in order to reduce the price of gas. Mainstream media appears to be catching up to this in light of Biden's decision to try and push a gas tax holiday. You spoke recently to Politico. Let's throw that tear sheet up there on the screen, the break the glass moment on inflation. So, Skanda, I just borrowed heavily from your analysis and your work, but let's just give people who are checking in the case against a gas tax holiday and what some better options are that you've laid out here already. Yeah. So the case against the gas tax holiday has to do with the fact we have a real shortage of gasoline, crude oil, and you can see this in the inventory data. Inventories are low. And so we have a real shortage of gasoline, crude oil, and you can see this in the inventory data.

Inventories are low. And so we have a real shortage, and we're going to reduce the gasoline tax, which is all things equal a net subsidy for consumption, right? So we're trying to consume more when something is scarce. How is that going to work? How is that going to actually lead to addressing the underlying shortage? And if actually lead to addressing the underlying shortage? If you're not addressing the underlying shortage, how is that actually going to lead to lower prices over time? Especially in a category of

consumption, that's pretty inelastic. It's not easy to sort of scale up demand or supply. So this is, if anything, it's a cross-subsidy of oil and gas companies in a way, but it's really inefficient. And I would say there are much more efficient ways to address the underlying shortage. And what do you think will be the net economic effect of Biden asking the oil and gas companies to be patriots? That's a joke. It will be nothing. The real question is states, some states have tried this.

They've tried the gas tax holiday. I understand the political appeal because you can sort of signal to people, this is popular. You can signal, I'm doing something. I'm doing everything I can. What has been the benefit in the states that have tried it or has there been a benefit to consumers at all? I think for some frictional reasons, you can get a couple cents, a few cents on the dollar. That's really what you're talking about at most. And even then, think about it as we have like an underlying shortage here. This is the leverage point in sort of the Russia-Ukraine war right

now in terms of what we're willing to sanction and not sanction. And so we're trying to subsidize consumption at this time. So to me, it's actually very tone deaf, but obviously I'm not one of these sort of political operators saying this is a smart political move here. But if we're subsidizing consumption when it's really scarce, that's going to also show up as demand will adjust up, and that's also going to show up and sort of prices will adjust accordingly. So whatever tax benefit you're getting in terms of the sticker shock is pretty thin. And we see it in Maryland and some other states. We saw actually that demand increased, but it didn't necessarily show up as like a big price boon for Maryland motorists because they had a lower gas tax. Right, exactly. So I think this is very important, again, to just underscore to everybody who is listening who might say, hey, that sounds like a good idea. Okay, so let's talk about what actually is a good idea. You've laid it out here in the show on the past. Again, it is getting some pickup. So

how exactly could the Biden administration significantly lower the price of gas by addressing the scarcity supply problem that we face. You've identified some executive actions, which are totally within his legal authority. Lay out the case again. Sure. So if we look at the oil industry, they will complain about a lot of things that are withholding supply. Some more legitimate, some less legitimate. Some things are annoying, but not the cause of the problem. The real cause, I would say, that's at the heart of it for why industry doesn't want to invest more is that it's been a really cyclical sector. It's been super cyclical and volatile. The price of oil has really been boom bust for the last eight years or so, starting in 2014 in particular. And that's kind of a function of how U.S. production has matured in a way. So we have the fracking, shale extraction has really led to more cyclicality in a way. That has led a lot of operators to be especially burned by that cyclicality. Why should I invest

right now if I might get burned in 12 months, 18 months by market dynamics? That has led to a reluctance to invest. And that's precisely where the Biden administration could be doing two things that would be especially helpful for providing that kind of sort of insurance and call it financing certainty. That would be very helpful. So they could be doing things to use the SPR, refill the SPR in a crash. And you can do that by selling insurance to the industry so that if you raise your investment, we'll also be there to catch you if prices fall sufficiently. And likewise, they could be offering financing certainty. Because right now the sector, there's two parts of it. One is not everyone has access to financing

and capital markets in terms of their ability to get their bank loans or be able to issue bonds and under what conditions. So that's not totally, Exxon's not the same as some of the smaller exploration production companies. But likewise, if you're trying to change the willingness to invest, you do need to think about why these firms may be less than willing right now. So there's a famous CEO, Scott Sheffield, who talked about even if oil prices go to $200 from the current $100 level, I wouldn't invest anymore because my shareholders demand I stick to the plan, stick to the investment plan, stick to the production plan, which I kind of understand because if you look at their profitability over the last eight years, it was not very good.

So they're trying to be really disciplined about not over-investing. But socially, we need more investment if we're going to solve the supply side of this problem, at least, especially given the sort of lurking risks around Russia and when Russian production could really collapse seriously, which I'd say we haven't seen just yet, but it still lurks and everyone is sort of worried and concerned about that risk. How much has the war, Russia's war in Ukraine, how much has that driven, and notably our response to it as well domestically by banning Russian oil, how much has that driven the increase in price, do you think? I think it's definitely a serious effect. We were coming into this invasion already with oil prices like trending close to 90 to 100 bucks. But as the risks grew,

you saw crude oil prices be bid up in anticipation of this risk. And we saw it spike up as crude oil prices spike up when the invasion actually was on the cards, right? So prices have some forward looking components to them. I'd say that because these risks emerge, everyone scrambles a little bit more to make sure they have enough supply to do the things they need to do with crude oil, with refined petroleum products. And that itself also leads to surges in prices. So I wouldn't say that crude oil markets are super smart all the time, but I would say that like they're pretty like rationally incorporating a lot of these risks. Right. And so that these are this has been a really important aspect of the inflationary picture. I don't think it's wrong to say that this is a big part of why crude oil prices as high as they are. And it's kind of the other

thing that I was wondering about is the price of a barrel of oil. the latest, I think, oil tumbles below $110 as fears of recession intensify. So the price of a barrel of oil is not astronomically high. And we've had at previous times in history, you know, similar prices per barrel of oil, but not nearly what consumers are seeing at the pump. So where does the disconnect there come in? Look, Russia is also really important for refining capacity globally, right? So we were in a situation where we were whittling down U.S. refining capacity. Refineries typically don't make money in a given year or don't earn a great return. It's pretty tiny at best. It's not a great business to be in in most years. It's really only

in like the sort of one or two years in a sort of longer period when you'll make all of your money back. So U.S. refiners were generally trying to wind down their capacity. There was, if you looked at the global picture, there were a lot of countries in maybe sort of three to four years from now that were going to be building refineries. And so we had this period of time when the picture was pretty fragile, and Russia coming offline, and China's also doing some things to kind of cramp their own refining capacity down somewhat tactically. And that has all contributed to, there's a scarcity of refining capacity. And so that means refineries margins for refining crude oil into petroleum products is going to go up. This is still a market, there are still a lot of needs oil into petroleum products is going to go up. This is still a market.

There are still a lot of needs for refined petroleum products, obviously gasoline, diesel, jet fuel, then your petrochemical products. And so that's been the other scarcity issue. These two things are – there are two scarcity issues that are related but also separable. So we haven't really seen crude oil inventories build up to say that, okay, the supply side is really coming back in a serious way. Likewise, we have really, especially for summer driving season, we haven't seen sort of high gasoline inventories. I think some of the refining margins have a chance to come down a little bit over time. Some of this

was about refiners who run seasonal maintenance now coming back. So there's some hope there, but we're probably not going back to the sort of low refining margins pre-invasion. Right, and I think one of the things I want to underscore is that everything you're laying out, given that the war is going to continue happening, given the inability of the plan,

without restoring some level of certainty and de-risking the market, we are looking at these high gas prices for potentially years to come. And that gets us to the Federal Reserve, which he said that increasing interest rates will have no effect on the price of gas and on the price of food, or at least an effect of lowering those prices. So can you speak to us about what it means for current Fed policy in trying to address the most inflationary aspects of our economy right now? Right. So the Fed has a really blunt tool, and that tool is interest rates, a specific type of interest rate that feeds into a lot of asset prices. And so it actually hits the propensity for businesses to want to invest or hire across sectors, whether those

sectors are consumer discretionary or energy and food and a lot of these commodity-specific sectors that are, we actually need more supply, we need more investment ASAP. And the Fed's actions, you can see it right now. If you look at energy stocks, while they've had a pretty strong run, energy stock prices have actually taken quite a big hit in the last week or so. And that itself has been a function of Fed policy, Fed talking about how they're going to have to risk recession to bring inflation down. Again, the Fed controls interest rates. I think sometimes there's a lot of misguided views about

what the Fed actually controls and how much control they really have over inflation. They have one tool, really, and that tool is short-term interest rates that can feed into a lot of different things, but it's going to feed in pretty bluntly. So I actually think it was a great question that Senator Warren asked, and I think I was actually surprised he said such a frank answer from Chair Powell, which is, we're actually not helping you here. And don't expect us to be the ones to provide you the serious relief. The only real way they can provide the sort of decline in food and oil prices is like a horrible recession. So see that with clear eyes. Yeah, no, that's exactly right. And there was a piece of this.

So that part I understood, right? It was really clear to me that, you know, what the Fed can do is they can hit the demand side, which means, you know, in layman's terms, you might lose your job. Your wages are going to go down. You're going to have less money in your pocket to spend. That's hitting the demand side. And so I looked at this, and most of the problems are these supply chain issues. So this is not even solving the problem, the primary problem that we have. But you make the case, this part I hadn't thought of, that not only are you not solving

the issues on the supply side, you may actually be exacerbating them. Can you explain how that works and what that looks like? That's precisely right, that actually Fed actions don't just hurt the demand side, they hurt the supply side because they're hurting your willingness to invest. And you're inciting a lot more risk aversion about investment and capital planning. So if you think supply is a function of what you invested in and how are you going to get future supply online will require investment. It's true in housing. It's true in oil and gas. It's true in automobiles. It's true in clean energy as well. Ultimately, my confidence that demand is going to be there in the future, that my financing costs and my future returns are actually going to check out.

Right now, if you're in a capital intensive industry and you actually need financing, your costs are going up for financing. And at the same time, I'm more worried about recession. And the Fed's not really actually saving me in terms of saying this. The Fed's saying, actually, yeah, there's a risk we're going to have to go into recession if we're going to control inflation. That's something Chair Powell said pretty transparently yesterday. So if we keep that in mind, what are we doing here? We're making some problems worse. Housing starts have also started to decline. There have been big backlogs and supply chain issues in housing. But if part of the way we want to get out of this is having more housing and more housing supply catch up to demand, whether it's owned housing or rented housing, these are things that

we need more investment today to actually solve. And you're already seeing those effects play out. And I think for a lot of energy companies that have been burned time and time again, they're getting questions right now from their shareholders. Are your capital plans actually going to be able to survive a recession? Because that's what the Fed's telling me might happen next. Wow. So yeah, so it actually puts even more constraint on there because they want to reap even more of the benefits.

I mean, everything you're saying, could we have a stagflation type scenario where we will have high inflation driven by supply side factors in addition to high unemployment, given the Federal Reserve? Do you think that that's possible? I mean, is that something that the Fed would even explore? I mean, the Fed's moving in that direction effectively. So inflation is a pretty complex beast, right? Part of it is demand. Part of it is supply. How much it is, you can kind of always debate till the cows come home. But it's really not like the kind of thing that is easy to control or easy to manage. And so inflation's high, but the Fed's tools are blunt. They can cram down investment and employment really rapidly. And so you can be left with actually, I think, again, what Senator Warren said is like the

worst thing, the only thing worse than inflation is inflation plus recession, inflation plus high unemployment. And that's what the Fed's policies are moving in that direction. I wouldn't say that that's fate, like it's necessarily going to happen, but it's a huge risk of what the Fed's doing. And I would say for Congress and the White House, you should be thinking about everything you can be doing to help reduce inflation and help keep the business cycle stable. Make sure investment's coming online because, look, monetary policy affects investment, but so do a whole lot

of other things. So you could be doing things in your own power to be, in certain cases, it does make sense to work with industry to make sure that they can make the investments needed to make their supply chains more resilient or make the kinds of investments that actually allow them to scale up investment with the confidence that, look, recession or no recession, it makes sense to invest. That's the kind of thing that we should see from the White House. We haven't. I don't think we have this yet. And same for Congress, too. Thank Congress, too. Thank you, sir.

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