Breaking Points with Krystal and Saagar - 7/5/22: Recession Arriving, Highland Park, 2024 Speculation, Ukraine Update, Press Sec Stumbles, Buttigieg's Inaction, Inflation, & More!

Episode Date: July 5, 2022

Krystal and Saagar talk about the recession arriving, persistent inflation, Highland Park shooting, 2024 election moves, Ukraine battle updates, Karine Jean-Pierre's rough start as Press Sec, Pete Buttigieg's inaction on airlines, Biden's indefinitely timeline for high gas prices, and the large increase in corporate markups!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/Niko Lusiani: https://rooseveltinstitute.org/publications/prices-profits-and-power/  Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

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Happy Tuesday. We have an amazing show for everybody today. Crystal, you're at home. You're not feeling so well out of abundance of caution. We're going to make sure that you're all right. You want to tell the folks, give them an update. Yeah. So over the holiday weekend, I tested positive for the old coronavirus finally came for me. That's my first bout with it. I mean, I'm fine. I feel probably like, I'm going to say 92% better. And according to what the doctors are saying, you know, I shouldn't be contagious anymore and any of that stuff, but I just wanted to be super safe and not infect anybody.

So doing the show remotely today, but I am well on the path to recovery. And we do have a great show for you today. We've got some new dire warnings about the economy actually might already be in recession. So we will break all of that down for you. We're also going to bring you the latest details on that horrific mass shooting in Highland Park, Illinois, a suburb outside of Chicago. They have arrested what they describe as a person of interest. So we've got all those details for you. We also have some pretty stunning polling on how the public feels both about Biden and about Trump, the two dudes who are most likely to be the major party nominees

that basically no one wants them to be. So we'll break that down for you. Big developments on Ukraine. How will the public respond? How is the administration responding? New questions there about whether we've been fed an overly rosy picture of what is going on on the ground, and some new questions about Press Secretary Karine Jean-Pierre and how she is performing in the job. Also, a reminder of our big live show in Atlanta. There it is, Atlanta, September 16th. We're coming, folks. We've done a phenomenal job of selling tickets so well. They tell me that we're blowing expectations out of the water, which is exactly what we want. Just as a reminder, we are coming not just to Atlanta, but all over. But we have to show that we can sell tickets in Atlanta before we can book venues anywhere else across

the country. So it's going to be fun. It's a big midterm show. We're going to have special guests and all that stuff. We're already planning the production. So if you can go ahead and buy tickets, means the world to us, to the show, and just shows the industry we are viable. We are as big as we think we are. So hopefully we can show that to everyone. So let's start then with the economy. Let's go ahead and put this up there on the screen. What do we got here? Which is that the Atlanta Fed, and this is very interesting, the GDP tracker that they use in order to forecast whether the U.S. is in recession or not actually shows that the U.S. is likely in a recession right now. The GDP gauge says that the second quarter is running at a

negative 2.1%. And if you couple that with the first quarter decline at 1.6%, that actually does fit the technical definition of a recession. So let's also throw the next one up there on the screen, please, because that's really what factored into the decision making, which is that the 1.6% decline in the start to the year really did show you that it was on pace in order to show 1.8% instead of the 3.1% that was estimated in May. You couple all this together and you just see the economy is getting slammed. The reason that the meat there is the first sign is that food inflation, gas inflation, cost of living inflation, rent inflation and more are just smacking consumers left, right and center. And all of that is impacting the ability of the average consumer crystal in order to go out and spend money, which is 70 percent of

the entire U.S. economy. Yeah, that's exactly right. And I mean, you already have a majority of Americans saying they think we are in a recession or headed to a recession. Now we are seeing some numbers to back that up. You also see economic confidence. Let's put the next element up on the screen. The lowest since 2009. It's plunged to minus 58. As of June, 85 percent of Americans say the economy is getting worse. And yet, Sagar, let's put this next piece up. It's a very strange recession because people are getting hit hard. You know, their wages are not coming anywhere close to keeping up with inflation. So that means they're basically getting a pay cut every period. Growth is negative. So that is the technical definition of a recession. And yet the unemployment rate continues to be quite low. So they say in this piece from the Wall Street

Journal that the U.S. is in a recession is a very strange one. Analysts sometimes talk about jobless recoveries after past recessions in which economic output rose but employers kept shedding workers. Well, the first half of 2022 was the mirror image, a job full downturn in which output fell and companies kept hiring. Whether it will spiral into a fuller and deeper recession isn't known, though a growing number of economists believe that it will. I mean, I think it's very unlikely that you move forward into full-on recession and don't see the unemployment rate go up significantly. But even with the rate where it is, there's still such a large amount of pain growing, especially for working class people, because their wages just aren't going far. So coming out of COVID, you just have such a strange confluence of events and circumstances with the

supply chain shocks now with the war on Ukraine, that it is creating economic conditions which are almost unprecedented and very hard to predict where this ultimately goes. Yeah, no, I think that's the right way. You know, and I actually, I get annoyed by the technical quibbling by the economists on whether we're technically in a recession or not. It's like, look, shit is too expensive. It's simple. Everybody feels that cost of living is too expensive. That's why consumer sentiment, as we showed, is all the way down to February of 2009. Whether we were tracked by 1.2 versus 1.8, the basic fact is that cost of living is way too high for 100 percent of Americans.

And if you consider that in the context of wages, yeah, okay, you could have the unemployment rate at 3.6, as long as wages are only rising by 2%, and cost of living is going up by some measures around 10 to 15. If you look at some of the really tough areas of life we've talked about before, that car segment we did on how the average payment was 650, well, now it's over $700, actually. So it jumped up $50 once more in the last month. Supply chain shortage is wrecking everything from what people need in their most basics. So whether we're technically retracting, not retracting unemployment rate, things are too expensive. And I think from that perspective, nobody can argue

that the economy is, what does Biden say, the strongest since World War II. It's like, yeah, which really came directly, was enabled by the fact that, number one, you have an NLRB that is actually, you know, taking the side of, not even taking the side of workers, but, you know, doing their job effectively. But the big reason is that you have these labor market conditions where jobs are plentiful, even if they are not good jobs. So if you see the economy start to turn so that not only are your wages getting undercut by inflation, but you also have fewer and fewer jobs and people more desperate just to hold on to any job that they can possibly get, that is going to cut the knees right out of the burgeoning labor movement. One of the things that they pointed to in that Wall Street Journal piece, which was very interesting about, you know, it's a very weird recession, is part of what's going on with the negative growth is retailers are having a lot

of trouble figuring out their inventory needs. So you had, you know, this supply chain issues, which continue, by the way, but some of which have gotten worked out a little bit, some of which have been exacerbated by the war in Ukraine. But they built up a lot of stock to get ahead of the fact that, okay, we've got all these disruptions, we've got to get enough into warehouses. And now they're caught kind of like holding the bag with too much inventory. So rather than building more inventory, they're spending, they're selling that off and, you know, trying to get that off their shelves. And so that's part of what's contributing to this negative growth and why you have such a kind of, you know, weird situation unfolding with the economy is we are still trying to figure out

how to get things back to any semblance of smooth operation post-COVID and post all the supply shocks that have to do with that. And look, it's a long-term question, too, of how much sustainability versus fragility we want to have in the supply chain. And I hope that moving forward, the government puts policies in place to encourage more resilience. But, you know, don't hold your breath on that one. I'm not going to hold more resilience. But, you know, don't hold your breath on that one. I'm not going to hold my breath. Unfortunately, all the signs that we're seeing, the Fed continues to hike rates. That's less investment that companies can make

into both capital expenditure, workforce. They're going to have to cut costs in order to keep their share price medium, at least in the long term, or try to deliver back dividends and more. At the same time, the supply chain issues are nowhere close to getting resolved. Target and all of these other retailers that are dealing with inventory, their response is not to deal with or rent more warehouse space, which is also, by the way, sky high right now. Their response is to slash and burn and to

try and sell as much of it as humanly possible. So we're actually learning, in my opinion, some of the worst lessons from a lot of the supply chain crisis just because of the financialization in the economy. And I think all of it is just going to contribute to everything being more expensive. Gas is going to be expensive for the foreseeable future. I just don't think that there's a way around it. I don't think the food prices or any of that is going to come down, not just because of Ukraine, but because of so many fertilizer that we've talked about, LNG shortages. So all of the shortages, nitrogen and inputs into the food and gas supply chain, the basics of life, unless we see a legitimate New Deal-style effort, which you and I know is not coming,

then, well, it's like things are just going to be expensive basically from here on out. And I think that's very unfortunate. Let me say one thing about that, because this was also interesting to me. There was another article about how a lot of commodity prices are actually coming down. Wheat, corn, oil. And they didn't attribute it in this piece I was reading. It was another Wall Street Journal piece to, you know, oh, changes in supply and demand. And oh, we now have better supply here, less demand there. It was all because Wall Street speculators had decided to make different decisions, which I think, you know, it's also important to remember that these prices don't just reflect the basics of where supply and demand intersect as we're taught in Econ 101. A lot of this, and you see this very clearly in the oil price,

in particular the gas price that you're paying at the pump versus what the price of a barrel of oil is. A lot of this is also driven by Wall Street speculators and the bets that they're making, irrespective of what else is going on in the real economy. So there was some hopefulness in that article that because commodity prices were coming down, maybe inflation has reached its peak. Maybe it's going to go in the other direction. But I think we're a long way from all of these things settling out. I think that's right. Because even as you're describing, you know, $15 drop, part of the problem with inflation is expectation. So part of the reason that prices are staying high is people are like, oh, well, expectations are chaos. And so we're going to keep the price high just in case going forward. I wish it fluctuated, like you said,

with pure supply and demand. But that's not how things work in the U.S. of A right now. Let's talk about inflation as well. So a shocking comment, honestly, from the Federal Reserve Chairman Jerome Powell, where he was giving a recent speech at a panel in which he basically admitted that the Fed doesn't know anything about inflation. Let's take a listen. One way to say it would be we, I think we now understand better how little we understand about inflation. Let's take a listen. One way to say it would be, I think we now understand better how little we understand about inflation. That's not very reassuring. No, honestly, this was unpredicted. Yeah, so we now understand better how little we understand about inflation. Well, okay. Cool. I guess, Jeremy, very good in order to hear from the person who is probably single-handedly most responsible for handling all of our fallout from this as a result of our fallout from the government.

And let's put this up there, which was a single other takeaway, which is that, you know, of the 1980s, he says he doesn't want to be compared to Paul Volcker. And sure, he's not raising rates to 19% or anything like that, but it could still be a recession in which we would have 6%, 7%, 8%, 9% unemployment. And given the supply chain problems that we still have, in many ways, the 1980s recession and more was probably easier to deal with from a sheer monetary perspective. Just putting us simply in a recession and causing high unemployment and nuking consumer demand would maybe deal with what, one third of the problem with high prices right now? So it's not a victory, in my opinion, to have a 30% reduction in the gas price or the food price when 70 odd percent could come

from dealing with the supply side factors. But of course, the Federal Reserve has no say in any of that. That's all up to our policymakers. Yeah, the cure here could be worse than the disease is basically what you're saying. If there's any doubt whether or not we're in a recession today, Chairman Powell is determined to make sure it's very clear to all of us that we're actually in a recession in the future. I mean, you hear more and more comments like this from him, you know, saying we need to get wages down when obviously, you know, wages are already not keeping pace with inflation. We know that the Federal Reserve has very limited tools to ultimately deal with inflation and those tools do not actually target the core, most dominant reasons that we

have inflation at this point. Not only that, but, you know, something that I just sort of learned about recently with some great writing from Skanda and from the American Prospects is it's not just that the Fed only can target demand. It's that actually when they hike interest rates, it means you make the supply situation worse as well, which is incredibly logical when you think about that. It makes it less likely that companies invest in building out the infrastructure and supply chain, working through those supply chain issues and having the cash available to do that. So you're actually having a deleterious effect on one side. So very unclear that their actions are going to solve the problem they are intended to solve. And there is some recognition of that from some dissident voices in Washington. Let's put this last part up on the screen here. Politico has an article, they say, no more whispers,

recession talk surges in Washington. And they quote, you know, I mean, first of all, the piece is just an acknowledgement that everybody in Washington up to the administration and up to Biden now acknowledges this is likely a reality that we're headed towards. I think it's very unlikely we can avoid it since by some metrics we're already in it. But they do quote a couple of people who say, you know, we're going about this the wrong way. They have Josh Bivens, who's the research director at Economic Policy Institute, Left-Leaning Policy Institute. He says, everyone's screaming about inflation, but people would really hate a recession too.

The mood could get a lot more sour. You also have Senator Elizabeth Warren, who I think has been good at understanding the risks and the type of solutions that could actually meet the moment. Obviously, I have my critiques of her in general, but I give credit where credit is due. She says, inflation is like an illness and medicine needs to be tailored to the specific problem. Otherwise, you could make things worse.

And right now, the Fed has no control over the main driver of rising prices. So I think she's exactly correct. You know, there's obviously people are suffering because of inflation. But the only tool that either Biden or the Republicans are really pointing to to get this under control means pain for you. No guarantee that it does get inflation under control. And, you know, corporate profit, we're going to talk about this later in the show, corporate profiteers let off the hook, no dealing with the underlying supply chain issues, no dealing with, you know, our continued role in pushing the war in Ukraine. So it's a really, really ugly landscape ahead of working class people.

I couldn't agree more. The thing is about Biden is there is a way, I think, politically to get out of this. We've talked about it, to acknowledge the pain. But over and over again, it's on gas. I'm taking my whole It's on gas. I'm taking my whole monologue on this. As long as it takes, is what he says, in order to restore our aims in Ukraine. What does that mean? As long as what takes? What is the actual aim? So people should continue to-

What are we even doing? What are we doing here? Because things are not going so well on the battlefield right now. Also, just acknowledge, this is not the strongest job market since World War II. Again, it comes back to the point I was making in the earlier block, which is technicalities and dealing with, well, the economists say that we're not technical. Listen, it is plain as day. People are fed up with higher prices. So talk about it and then do something. And the do something part is where, you know, on July 4th, the guy tweets out to the gas companies and asks them to please bring down the price.

Like, that is not any semblance of a plan whatsoever, even on meatpacking. You know, over and over again, we've talked about all the vertically integrated supply problems. We've had people on our show, ranchers and others, who point to the gouging that takes place in the industry. There's no roundtable that's happening at the White House. Just on a day-to-day basis, I really just question what the hell he's doing. And I was particularly embarrassed. I don't know if you saw this, but at the NATO summit, Emmanuel Macron and the NATO chair, Jens Stoltenberg, had to beg Biden. They're like, hey, you need to start talking about oil supply. As in like,

you know, the United States is the largest country on earth or the largest economic power on earth. And in the NATO alliance should probably start trying to deal with some of the supply issues. It's like, even they are looking at us and can't even believe that the administration has its approach right now to the global economy. We shouldn't forget also, you know, the Western powers in Europe are getting hammered by, frankly, even higher inflation in some areas of their life. So this is a global phenomenon, as you always point to. What is the most correlative thing to a social unrest? Bread prices. All the way back until the Roman Empire, we've had bread riots. I mean, we are very much walking ourselves into the same situation. Yeah, I think that's well said.

Okay, let's move on to a very, very sad story about what happened in Highland Park yesterday. July 4th, there's a Chicago suburb. There was a July 4th parade, and there was a mass shooting by a particularly deranged individual. I just want to give a warning here. We are going to play some video about what it was like whenever the shooting broke out. So it's a sensitive warning. If you have kids or anything like that, make sure they're not in the room for this. Let's go ahead and take a listen to what it was like on the ground whenever the shooting broke out.

We're just going to play a couple of seconds of this. Yeah, I mean, Chris, you can just see people running. I can't even imagine. You're with your family. You've got a stroller. People strewn about, running away in the middle of what's supposed to be like a joyous occasion, day off, birth of the country. It's just so, obviously, it never gets easy in order to do these things. And just the pure details, let's put this up there on the screen. We got six dead in this mass shooting so far and a number of people who are in the hospital, up to 15 at the last count

that we said. So right now, what the officials say is they've recovered a high-powered rifle from the scene. They say the shooting, quote, appears to be completely random. We don't yet know a lot about this alleged shooter slash person of interest who's been taken into custody. He was taken into custody last night, 6.30 p.m. local time. There was not a shootout or anything like that. We're not going to say his name here today in order to deny some of the glory that obviously was being sought. But let's go ahead and put this next part up on the screen. We're looking at a grade. I mean, this President Biden, he's saying, I'm monitoring the situation closely, not going to give up the fight on gun violence. Now, obviously, you know, to have that on the birth of the country and a national holiday

is just completely horrific. So the next one up there, which is that from what we know about this gentleman so far, he appears to be a real freak. And I think that that is putting it lightly. Has released several videos over the years glorifying mass shootings, including cartoons. He had tattoos all over his face, and his hair was dyed in various colors. Clears to have been a complete and a total misfit. And really what they're showing here is that for years, he's been rapping and producing videos. He even has millions of plays, actually. Crystal, on Spotify, had a Discord server in which fans and others were posting some really deranged content. Apparently, the last thing that he even posted in his Discord was a video of a beheading. So look, this is somebody who clearly glorified violence and

exhibited like every, you know, I mean, I don't know what it takes in order to flag somebody. Illinois does have a red flag law apparently. And this is a guy who was producing videos where, you know, he literally is mimicking mass shootings and glorifying violence on this. So we don't know the exact motivation. Clearly, you Clearly, I perused his Twitter feed and looked at some of his past posts, but an extraordinarily deranged individual responsible now for six deaths. Luckily, he's been taken into custody and there was no shootout or anything with police officers. But yeah, I mean, to have it on July 4th is really just so terrible. It's so difficult to even talk about. It is.

And I mean, it's a pattern of you just feel like we're safe. You know, schools aren't safe. The shopping, the supermarket's not safe. The shopping mall's not safe. The streets aren't safe. The July 4th parade isn't safe. It's just devastating for the families who have been impacted here. And what they described is apparently he was on the roof, just, you know, sniper style, taking people out, absolute, you know, terrorist act, really, to strike fear in the heart of not only those people and take

precious lives, but I think of the country as a whole. To your point about what a deranged psychopath obsessed with murder and violence this dude was, he released a track on October 15th, 2021, that seemed to indicate there was some life-defining event, act that was beyond his ability to stop. It includes drawings of someone aiming a rifle at another person. It also includes an image of a newspaper clipping about Lee Harvey Oswald, who, of course, according to official narrative anyway, assassinated JFK at a parade. And another image of a victim shot with blood spraying from the body, as you said. So he has his own discord. And I guess people would post a lot of like super nihilistic, some political, like nihilistic

political memes there. There was a different board that he posted the video of the beheading. And that board that he was a frequent poster on was explicitly dedicated to violent images of murder, suicide, and death. So this seems to be a completely deranged person, at least to this point. We don't know of any sort of political motivation. His family was well known in the town. Actually, his dad ran for mayor and lost in the town. And, you know, it's just it's just horrific. It's just absolutely horrific. There's nothing else you can say. And I don't know what you do about someone like this there was this instant obsession with figuring out what

sort of political lead this murderer might have and he's like dueling debates online over whether he was you know what what his political like okay if it comes out this was politically motivated then we can have the discussion but i hate the instinct always to try to score points like oh he was one of you guys so this has to do you know, all of this political category being evil or no, no, he was actually one of you guys. It's just another time where instantly these things happen and people want to try to score points for their like political partisan team rather than actually getting the bottom of what happened. Yeah. While people are literally still in the hospital and there's blood still on the street.

I'll make one political point. Broke out this morning. We don't have a terror sheet for this, but apparently, and this is admitted now, this shooter was known to law enforcement. So there remains questions, as usual, with Buffalo, with many of these other people and their interactions with law enforcement in the past. Like I said, Illinois does have red flag laws that are on the books. The gentleman's father apparently had admitted to close associates that his son had, quote,

emotional problems, which is all on video. You can see it. So neighbors and others describe him as riding an electric scooter around, blaring music, seeking attention. So this is clearly a deranged person who's basically making it known to the world online and clearly racked up millions of views with this type of content. And now we know that he was also, quote unquote, known to law enforcement by their own admission. This is from reporting in the Chicago suburbs from their local news outlets. And I think there remains to be a lot of investigation as to how exactly all of this played out and why previous instances didn't, maybe he'd been arrested before, you know, why hadn't been flagged, why hadn't they done anything about it in the past. So I think all of that is going to remain

to come to light. And like you said, I mean, you know, that type of discussion, it doesn't help anybody, unfortunately. So that level of obsession online is never there. Instead, it's like, oh, did he tweet MAGA or whatever? I mean, by all accounts, he seems to have been a shit poster to the highest degree and just a deep nihilist. So I don't really think that's aligned with any real political movement outside of we have a deep sickness in the country. And it also just shows you some of the deranged depths on which a lot of people on the internet get up to. So if you're out there and you're looking at this type of content because you think it's funny, there are real consequences to some of these things. And I just think it's on everybody to look at that and also to remain and report things to law enforcement whenever there's such obvious red flags of producing videos where you're, like you said, life-defining events and glorifying Lee Harvey Oswald and drawing cartoons of people getting killed.

It doesn't take a genius to figure out what's going on there. All right, let's go ahead and talk about 2024. Some interesting polling that came out over the weekend, probably not to the president's liking. Let's put this up there on the screen. 71% in the latest Harvard Harris poll, Crystal, say that they do not want President Biden to run again. I mean, just a stunning case for the sitting president of the United States. 45% said Biden should not make another bid because he is a bad president. And the other third said he's too old. One quarter of those people said, yeah, it's just time for a change. So the vast majority are like, yeah, he just sucks. And the other are, he's too old. I mean, I think it's very difficult to come out of that. The Carter analogies just

continue to pile up because what you take away from a 71% not wanting to run you again, and then even the lack of enthusiasm, is there's no Biden base. There's no group of people like the MAGA faithful who not only want you to run, but love you, think you're the greatest Republican president since Ronald Reagan. Everybody's like, yeah, whatever. I'll vote for Biden. Yeah, everybody said he could win, so that's fine. No constituency in the Democratic Party. And then the people who hate you really hate you. So he really does have Jimmy Carter syndrome to the utmost degree. And that's how you have almost three quarters of the country who do not want you to run for president again. And yet,

as you know, that is the most likely outcome because of his lock on both the Democratic Party, on the machinery, on the ability to stop anybody from running against him, as you covered in your monologue about rigging the primary system to make sure that he can win. So we are really looking and being hoisted on another rerun of the 2020 election when nobody wants that. And yet that's almost certainly going to be the outcome. I think it's a real sign of societal decline that you have two men that overwhelming majorities of the country are like, we do not want these guys. We do not want you. And it's very likely that's the matchup we end up with. I mean, I just don't know if you look at this other than this is a tremendous sign of the brokenness of our country. Even within the Democratic base, only 30% of Democrats say they want to vote for Biden in Democratic presidential primary. This is the incumbent president.

I mean, this really is an extraordinary situation. He's almost, I mean, he is definitely going to run as long as he is alive and well enough to do it. The reporting is he's probably going to file maybe in the new year. It seemed to indicate he wanted to have that holiday discussion with his family, as is his sort of tradition, and then probably go ahead and launch the reelect. And I think he also, it's very clear, knows that he's quite vulnerable if you have the right candidate in a Democratic primary, because that's why he was so relieved when Bernie took himself out of contention and said, I'm not going to run against Joe. He was so relieved he invited Bernie over for dinner at the White House the very next day. So clearly he's running, but he's very nervous about how vulnerable he is ultimately in a primary. I mean, that is such an unusual state of affairs where you have a majority of the party of the president saying, we don't want you. And, you know, this guy won because of electability. And if you look

at the numbers now, you just can't make that same case that like, ah, this is the one you want to beat Trump and the Republicans. This is the guy you got to go with. So what's left? Because people never voted for him because they thought that, you know, they loved his policy positions and they thought he'd been, you know, a great leader in Washington. They thought this is the guy who is electable. Well, he doesn't have that anymore. So, yeah, I think he's extremely vulnerable. He's very vulnerable, both from the economic

conditions that we talked about in the earliest show, inability really to connect with and just show a level of caring or even can do on any of these that have now stacked up over years. At this point, he has such little faith with the American people that even if he tried to turn it around, I'm not sure that it's even possible just because people are so forlorn and foregone in what their conclusion are of Biden. And if you do track it, I mean, even right now, he's lower than where Jimmy Carter was at this time in his presidency. He's the least popular president of our lifetime. And he does not have any enthusiasm metrics on his side. All of the tides turn against him. You see that,

you know, the economy is probably only going to get worse over the next couple of years. At the same time, whenever you have the midterms go against you, how are you supposed to pull yourself out because now you can't for him. And he doesn't seem particularly concerned about turning it around other than, as you said, rigging the primary, making sure that, you know, Bernie or whomever doesn't run against him. And from a basic public relations standpoint, I just don't know. I really question what he does all day. I really just don't know. Because, you know, we do a lot on this show. We're always looking for sound or reaction from the president. We very rarely have some. He's extraordinarily inaccessible to the press. He is highly choreographed, both either by his staff or others. And he's just not there in the same way. At least with Trump, you could always say this. He always had a reaction or a comment on something that was going on in American life. Obviously, that worked to his detriment, but I also think

it worked to his benefit in some respects, at least in keeping his name out there. He was always attached to something. With Biden, it just seems that the events have completely overtaken his ability to deal with them. I think that's the right way to say it. He just seems like he's reacting and slowly to the things that are happening rather than being you know forward looking and and prepared the response to roe is the perfect example of that you had a heads up this was coming you had i think it was seven weeks to be able to prepare a response you still had nothing to say caught completely flat-footed on the very day roe is overturned you're cutting some deal with mitch to put some, you know, anti-abortion judge in

Kentucky. It's like, what literally what are you doing? You know, I think we're going to face a very unusual landscape, which is so you got 71 percent say we don't want Joe. You got 61 percent saying we don't want President Trump. I do think if you had a third party candidate who was at all serious and able to get ballot access, I don't think they're going to win. But I think you could have Ross Perot level numbers of support and interest because people are just so disgusted with these two options. Absolutely. So let's move on to that part, actually, around Trump, because as we wanted to make sure we also mentioned in the poll also says 61% don't want Trump to run again. So you have two-thirds of the country who doesn't want that. And now people are beginning to take notice on the possibility, again, slight possibility,

but still existing, that Trump may not be the nominee. Black Swan events could happen. Maybe we've seen some outlier polls and others that say Ron DeSantis could beat Donald Trump in the New Hampshire primary and others. And an interesting indication right now, Governor Gavin Newsom of California going specifically after Governor Ron DeSantis trying to court Californians who moved to Florida during the pandemic and elevating both himself as a potential 2024 nominee and his potential opponent, Ron DeSantis. Let's take a listen to his new ad. It's Independence Day, so let's talk about what's going on in America. Freedom is under attack in your state. Your Republican leaders, they're banning books, making it harder to vote, restricting speech in classrooms, even criminalizing women and doctors.

I urge all of you living in Florida to join the fight or join us in California, where we still believe in freedom, freedom of speech, freedom to choose, freedom from hate, and the freedom to love. Don't let them take your freedom. Paid for by Newsom for California Governor 2022. I mean, interesting use of funds there, Crystal. What do you make of this? I mean, I don't think Gavin Newsom is going to be a 2024 nominee regardless, even if it did come to a primary. But, you know, he is

the governor of the country's most populous state. He did survive the recall election. I find the idea of him attacking Ron DeSantis with his campaign money much more interesting, even more so than his idea of him being the Democratic nominee, because clearly they think that DeSantis has enough of a national profile that he himself could be the 2024 Republican nominee for president. Yeah, I think Newsom, listen, Gavin Newsom thinks very highly of Gavin Newsom. And he certainly imagines himself as a future presidential contender and sees this as a great way to sort of make some national waves. He doesn't face the serious challenge in terms of his reelect for California governor now that he's survived the recall and survived it quite easily ultimately in the end. So he's got money to burn.

And this is a great way for him to kind of make a national splash and get his name into the buzzy discussions about who might be the successor to Joe Biden ultimately. I think the messaging in that is quite good, too, because Republicans have really claimed this language around like freedom and freedom of speech, et cetera. And he points to some of the areas where DeSantis has been a hypocrite in terms of his language about free speech versus some of his legislative actions, which is quite, you know, constraining on people's ability to protest. And, you know, certainly, you know, lots of discussions about what's being done in schools there. So I think it's kind of a savvy move. I think the idea that he's anything different or unique, Gavin Newsom, in terms of the Democratic

Party is sort of silly. I mean, this guy is a totally standard issue establishment Democrat. There's no way that he would be the one to challenge Biden in 2024. I just don't see it. He is way too much of a party loyalist, ultimately. But it does show you that, you know, clearly he and DeSantis recognize that there is desire for something other than the leaders of these parties, and they're trying to line up to be the alternative. Yeah. And sadly, Trump also recognizes that. And he's thinking about the best ways that he can to kneecap DeSantis. Let's put this up there on the screen. So Trump apparently has been going around telling people that he wants to announce as soon as possible for a 2024 run. The reason being that he wants to freeze out all of these other Republicans, which are very clearly also thinking about running against him. So I've been reading reporting from all over Mike Pompeo thinking that he can somehow win the Iowa caucuses

against Trump. I really don't know where that comes from. I mean, Ron DeSantis thinking and not asking Trump for his endorsement for 2022 whenever he's up again as governor. You have other Republicans, Tom Cotton, who's apparently been meeting with donors, thinking about different ways that he could run against Trump. Nikki Haley wants to run, apparently. So you've got Ted Cruz and others, of course, are waiting in the wings, always wanted to be president.

So if you consider all of those things, Trump, the most logical thing he could do is just claim ground before any of them. He has all the money in the world, you know, in his Save America pack and elsewhere in his campaign funds. He's the biggest, most recognized Republican in the country. Obviously, he's the former president. He could easily launch a bid again. And then everybody who would launch after him seems reactive. I think actually the more that Gavin Newsom, others and even the media, frankly, elevate Ron DeSantis, the more it's just going to light a fire under Trump in order to announce even sooner, maybe even before the midterms. It's possible, although he might wait until right afterwards.

And I think it's a smart move on his part. I mean, I do think it puts it makes it very difficult for DeSantis because the minute that he's in the race, then everybody's in the position of, all right, which side are you on? Are you are you with me again? And, you know, I actually think Biden is more vulnerable in a primary than Trump is because Biden does not have that enthusiastic base of support and Trump does. And so, you know, as much as there is a contingent that would like to move past Trump, they don't have a great argument they can make for it because they're too afraid to take him on directly. And, you know, history proves that they, uh, it probably wouldn't go well if they did.

So they don't have a great argument to make as a critique of him, other than that, like that they whisper to each other when they think he's not listening. And he's got that enthusiastic base of support and all that money and all the media attention he could possibly want. So I think it will be very difficult to unseat him as a Republican. You never know, right? You never know what's going to happen. You never know when he's going to over. You just never know. But I really think that Biden is in an actually more precarious place, which is a remarkable situation given that he is the incumbent sitting president. In that poll where you had 61 percent who said they don't want Trump to run again. So the reasons that they cited, you said with Biden, he's a bad president. He's too old, basically.

With Trump, 36 percent say he's erratic. 33 percent say he'll divide the country. 30 percent say he's responsible old, basically. With Trump, 36% say he's erratic, 33% say he'll divide the country, and 30% say he's responsible for January 6th. So those are kind of, look, I mean, it's no surprise that those are his weaknesses, that people just associate him with complete chaos and division and insanity. But in terms of the Republican primary,

I think he's in a much better position than Biden is. Well, what a country. Okay, let's talk about Ukraine. Ukraine, there's been a lot happening on the battlefield there. So let's go ahead and put this up there on the screen. Actually, Ukraine losing its final eastern stronghold in the Luhansk regions. We haven't been talking as much about Luhansk here on the show. But part of the reason why it matters is that that, of course, is one of the breakaway republics that began this entire thing. We'll remember that Putin recognized the Luhansk and the Donetsk, you know, so-called people's republics. And that was part of the pretext for the Russian invasion of Ukraine, you know, restoring and keeping the so-called

territorial integrity of these breakaway regions, which have kind of been in civil war in Ukraine now for almost eight or nine years. Well, now you have Ukrainian troops actually withdrawing from the most major city in that last place where they had an urban holdout. And that just faces another battlefield withdrawal by the Ukrainian military in the eastern part of the country, which really has been the flashpoint on this for a long time. And it represents both a victory in terms of not just Russia in the battlefield, but an affirmation of their new tactics. And by new, I really mean old. They have reverted to their old supply chain, using railway cars. They are just bombarding the hell out of these cities with artillery, indiscriminately killing whomever they want and whatever they need, leveling and willing to wage total warfare against the Ukrainians. And the Ukrainian military is largely conscripts,

not as experienced. A lot of their experienced guys have either been killed or wounded at this point. They have a tremendous rate of attrition that is happening there on the ground. Yes, they have some conscripts that they can call up, but we're talking about only six, seven weeks or so of basic training. To the extent they have advanced weaponry, they barely know how to use it. A lot of it, they have to be trained by the U.S. and by NATO allies, so that hasn't been employed on the battlefield. And just slowly, we are watching what happens when you have a lesser power meet a great power in warfare. Yes, Russians embarrassed themselves in the initial movements on Kiev and in their

initial battlefield tactics, but they are still a great power military with a ton of Soviet power leftover military equipment, and they have tens of millions of conscripts that they can draw upon if they need to. So their new strategy is working, and also they have the industrial base in order to keep up the artillery bombardment against Ukraine, which Ukraine, of course, does not have given the fact that their economy is contracting. And they've already lost a significant part of their territory. At the same time, polling for the president and for the administration, the U.S. handling of this, is not even close to where the Biden administration started out from. So the Concerned Veterans of America commissioned a very interesting poll. Let's put this up there on the screen. Americans remain very wary of more

intervention in Ukraine. But the most, you know, interesting part to me was that 44% currently have an unfavorable opinion of Biden's handling of the war. One third only have a favorable opinion. So the rest are basically not really clear on what's happening. A quarter of the war. One third only have a favorable opinion. So the rest are basically not really clear on what's happening. A quarter of the American public, only a quarter supports directly involving. So another way of saying three quarters of the American public doesn't want any direct U.S. military involvement in Russia. Twice as many people who oppose that. And when you compare this, and this is the most key, to a similar poll conducted in February, American sentiment on going to war with Russia has remained unchanged, roughly half opposed and less than a quarter supported. But the sliding scale of the approval of the Biden administration and their handling of the war is continuing to go down. And only one third of the country affirmatively supporting that, given what we see with gas prices and more.

And also, look, we just have to acknowledge this. Ukraine is losing in the current iteration of this war. They have not lost. They're certainly not out of the game, but they are losing the current iteration of what we see there on the battlefield. And absent direct U.S. military involvement or arming them with some outrageous weapons, which would almost certainly provoke some sort of confrontation with Russia, this is most likely to be the status quo. But as we covered in our last show, some 90% of Ukrainians left in the country, to be clear, left in the country, do not want to cede even one iota of territory. So the hawkish attitudes amongst the Ukrainian public, probably even more so than the Russian public in terms of the people who support this, no real incentive from the administration, from NATO, in terms of getting Zelensky to negotiate. So he really is in a rock and a

hard place. He's got no domestic support to negotiate. He's got no international support to negotiate. And of course, you know, the Russians could end this tomorrow too if they wanted to, but they're not going to. They're all in at this point. And there's no indication that they may even stop once they win these eastern parts of the country. You know, I'm reminded of the way that our mission in Afghanistan

changed without ever having any real public discussion or debate about what we were doing in the country. And I feel like we see the very same thing happening in Ukraine, where, you know, you have officials who haven't really been straight with the public about what exactly we're doing there, about how exactly things are going on the ground. We've also had reporting that the Ukrainians aren't even really keeping us surprised, our top officials surprised of how things are going on the ground as well. And so now would be a phenomenal time to take a step back, assess the landscape accurately, and decide what it is we actually want and what we're

going to do to achieve it. Instead, I think we're going to just sort of continue sleepwalking in the same direction, keeping the public in the dark, making extraordinary expenditures and continuing the escalation in terms of our actions and our intelligence providing and what we're giving them in terms of military aid, I think we'll just continue in that same direction and really not ever take a step back to say, what are we doing and what does an end game look like? And that is an extremely dangerous game. And so I think the public senses that. I think that's why you see the support trailing off for Biden's policy here, because people are starting to go, all right, when does this end? How do we get to some kind of a peace here? You know, we were kind of told Ukraine was going to win and that was going to be that. It doesn't look like we're

heading in that direction. So what now? Yeah, that's right. And look, I mean, to be honest, even though Afghanistan cost us, I think, $700 billion, at the end in Iraq, $2 trillion, the gas was never $5 a gallon as a result of those invasions. So in a way, you know, this invasion and the cost to the American people is probably higher, even though we did end up paying for that in other ways through deficit spending. The immediate pain felt at the pocketbook, at the pump, and elsewhere is much higher on this conflict. And to the Afghan point, I'm going to talk about this in my monologue, but let's put this Washington Post piece up there on the screen about how as the Ukraine war bogs down, U.S. assessments face scrutiny. Well, guess what, Crystal? The Pentagon is no longer telling us how things are going for the Ukrainians. They're not

giving us assessments on how the Ukrainian military is faring. Now, the Pentagon's excuse is, well, we're not going to do the Russians' battle damage assessments for them. Well, I remember covering the Afghan war and hearing the exact same thing. We're not going to tell the Taliban how the Afghan National Security Forces are doing. Well, how did that work out for us during the fall of Kabul? The American people had no idea how their taxpayer dollars were being used to support a foreign military, whether that foreign military was capable of doing its job at all. At least to this point, the Ukrainian military is much more capable, less corrupt-ish than what we saw in Afghanistan, which is great. And obviously, I support their cause. However,

we have no transparency and we are sleepwalking it with Biden's as long as it takes attitude, the CIA, you know, special operations people that we've talked about that which are openly acknowledged on the ground. And we have no off ramp period in terms of getting away from the global disruption that has been wrought upon us. So I think Afghanistan very much is a good example of just how long these things can go, how the Pentagon can go. Even if three fourths of the American public don't support it, what did we all learn in Iraq and Afghanistan? They can go on forever. They can invent every policy and fake rhetoric known to man in order to convince you that what's going on over there is supposedly to your interest. And that is not safe for the world when the stakes are this high. I think there's another important piece here, which is it's important to remember what the

status quo was before Russia, you know, fully invades and launches this war, which is that they held Crimea and they effectively held some areas in Luhansk and Senec in the eastern part of the state. So what is our goal in conjunction with our Ukrainian allies? Is it to push the Russians back to where they were? Is it to push them out of even those territories that they had helped go beyond where the status quo was before. These are basic questions of extraordinarily significant repercussions that we have absolutely no clarity on whatsoever. The fact that we are so deeply engaged in this, and it really truly is a proxy war, the fact that we are so deeply engaged in this and the American people don't have basic answers to these questions is really

unconscionable and inexcusable. And I do blame the media also for their complete failure to push administration officials on any of these questions or to adequately explain to the American public, you know, what the costs and consequences and risks and trade-offs are here. I thought Congressman Khanna had a good quote in that Washington Post article. He says, look, he applauds the administration's objective in stopping Russia from seizing Kyiv, but the United States cannot resign itself to a, quote, prolonged, never-ending conflict

that is wreaking havoc on the American economy and global economy. He says, I believe we should declare victory for the president's efforts in standing up for a sovereign Ukraine. We should say we won the Russians' loss. They did not achieve their fundamental objective, that maximalist initial objective. People do not want to see a resigned attitude that this is just going to go on as long as it's going to go on. What is the plan on the diplomatic front? And, you know, a really basic question that we have zero answers to.

Yeah. Well, unfortunately, he's one out of 435 and the 434 are not singing the same tune. So as long as that remains the case, we'll be talking about it here on this show and people will continue to be poorer and a lot of people are going to continue to die. And I hate to put it that way, but I think the stakes are high enough and that people should understand it at home. Let's go and move on to our fun segment here. The new press secretary, Karine Jean-Pierre, things not going so well for her, not just according to us, according to her own colleagues. Throw it up there on the screen. Her own colleagues leaking to Politico that she makes them wince and cringe.

Her answers have baffled reporters. Her White House colleagues can't believe how well she is doing. And she has increasingly found herself sharing the podium with John Kirby over at the Pentagon. The reason why is that John Kirby, actually longtime spokesperson, he was spokesperson for the Pentagon whenever he was in the military. The State Department hired him under the Obama administration. Then he was brought back as the Pentagon spokesperson. He was on television, on CNN for years. He's a good propagandist, I guess, as they come. He's really learned his

chops during the war effort. Well, the Biden administration is basically making it known that she is so bad that they have to bring him to the podium whenever they're talking about very serious matters so that she doesn't screw up matters of international diplomacy whenever she's answering questions. And Crystal, you and I put together a bit of a mashup here for the audience. Just if you're the uninitiated, if you don't have to suffer through some of our briefings about just how rocky her little start there at the podium has been. Let's take a listen. We are calling on them to do the right thing, to be patriots here. Yeah, let me see if I have anything new for you on that. Um, I think it's been a couple of days since we have been asked that question. Okay. Oh my gosh, he's the President of the United States. You know, I can't even keep up with it. We just got back from New Mexico. We just got back from California. That is not a question that we should be even asking. Just look at the work that he does.

Oh, God. That pause on the binder, that is so bad. And, you know, just what we were talking about earlier. And this is how they find themselves in the same conundrum every time. Throw this up there. Well, what do we have now? Some black communications officials in and outside of the administration feel that White House leadership has set her up to fail by having John Kirby, a white man who was in the running for her job, hovering nearby,

taking the lead on foreign policy. They can't can her because they made such a big deal about how she was the first black LGBTQ woman to be paid to lie on behalf of the U.S. government. So they're completely in a box. It's like the Kamala trap all over again. And she's terrible at her job. And, you know, it has nothing to do, there are many great black propagandists who are out here in Washington. I'm sure they could do a great black LGBTQ plus IA, whatever acronym you guys want. I'm sure I could find some great ones. She is just bad. And yet, because they put her in that box and now they are really totally screwed. They can never replace her. I mean, she can't be fired so clear, so close into her job. And so we all as American

people just have to suffer. I mean, that binder flip and not having the answer, that's just complete rookie status to one of the highest profile comps positions in Washington. Yeah, I'm sure you can see this weird sunlight coming out of my face. I can see it. I like it. But listen, here's why this matters, because the Biden administration, one of the things that they were supposed to bring was like the adults back in the room and a level of capability and competence. And it's not an easy job being the paid propagandist for the administration. It's actually difficult to be that in that position and like memorize what the correct lie is at every turn. But they really presented to the American people that the adults would be back in charge.

There'd be a high level of confidence, competence. And this is your primary person you're putting out to the public. And, you know, it's not not a great look. All right, Crystal, what are you taking a look at? Well, guys, remember how Mayor Pete, who is now the secretary of the Department of Transportation, remember how he was super upset about how the airlines were canceling all these flights and they didn't have proper staffing and sat them down for a Zoom call to give them the business and tell them he was going to be watching over July 4th weekend and that they better deliver or else he might do something unspecified. And then, of course, they immediately, like, the very next day, canceled his flight and he had to drive from D.C. to New York. Well, you might have noticed the July 4th weekend happened.

And let's go ahead and put this element up on the screen. There's Pete. Yes, told them to step up their game. Let's put the next one up. Holiday travel was a complete and utter disaster over the July 4th weekend. Surprise, surprise. You had 464 flights completely canceled. You had more than 6,600 delayed. That was just in the first couple days of the holiday weekend.

So the overall numbers might be even worse. So you would think that now that we have the proof, right? He said, okay, you guys got to deliver on me watching closely. All right. The proof is in. It was a disaster. You even had Delta so desperate to get people off their flights that they offered passengers $10,000 to get off one of their flights.

So what is Mayor Pete's response? Man who is in charge of the department most responsible for holding these airlines to account. Weird consumer tips, put Pete's tweet up on the screen here. Rather than actually using his power to do something, instead he's giving consumers tips on what to do if their flight is canceled. He says sometimes an airline will offer you points or miles as compensation, but you're entitled to a cash refund when your flight is canceled. When deciding whether to accept miles, it's helpful to know their value, which varies, but often is estimated at one to one and a half cents per mile. He then just goes through the whole calculation saga that he used to figure out whether he should accept the miles or accept the cash when his flight was canceled.

And I think Sirota had the perfect response to this, put this last piece up on the screen. He said, dude, you are not a travel agent or an airline consultant. You are a regulator. Your job is to use the power you have to crack down on airlines when they abuse consumers, read and start actually doing something. And he links to the article that we've covered in the past that gives some concrete steps that he could take to try to force these airlines to, you know, not fly more, not book more flights than they're actually capable of flying. So Sager, you know, yet another disaster. And really the point here is that there's this complete feigned helplessness on the part of liberals that Pete is very much a part of here. Yeah, I'm like, what are you? And if you want to hear my

reaction to Crystal's monologue, become a premium subscriber today at breakingpoints.com. All right, Sager, what are you looking at? The thing about Joe Biden that I often cannot believe is that it's real. I felt that way with Trump. The first time I went in the Oval Office to interview him, I looked at him and I was like, wow, that really is the guy from The Apprentice sitting behind the Resolute desk. With Biden, I guess it's more believable that he's in there, but it is less believable in the way that he conducts himself. And it's just one of the worst leaders to occupy the office in some time.

With Ukraine and on gas specifically, he never ceases to amaze me. And that is exactly what he did while conducting a press conference capping the recent NATO summit when he was asked by a reporter, how long should Americans be paying high gas prices at the pump to support Ukraine? Here's what he had to say. And how long is it fair to expect American drivers to continue to pay a premium because of this war? The second part of the question was, would it bring down the price? Will it bring down prices? And the war has pushed prices up. They could go as high as $200

a barrel, some analysts think. How long is it fair to expect American drivers and drivers around the world to pay that premium for this war? As long as it takes. Russia cannot, in fact, defeat Ukraine and move beyond Ukraine. As long as it takes. I've tried very hard not to sound callous on this show. I am genuinely with the Ukrainian people. I hope they win. But I also care a lot more about America. So I once again have to ask, how much longer and how much higher should prices go to keep the territorial integrity of the eastern Donbass region of Ukraine? Notice, he doesn't answer the question that way. He says as long as it takes so that Russia cannot defeat Ukraine. But is an outright victory on the battlefield even attainable for

either side? That's a great question that I'll answer later. But notice also what Biden's top economic advisor says when even CNN is forced to ask him a somewhat critical question. They say that this could be a long war measured in years. And I think everybody understands why this is happening. But is it sustainable? What do you say to those families who say, listen, we can't afford to pay $4.85 a gallon for months, if not years. This is just not sustainable. Well, what you heard from the president today was a clear articulation of the stakes. This is about the future of the liberal world order, and we have to stand firm. Future of the liberal world order.

Notice they just keep reaching for grand strategic principles to justify their idiocy. Because if they have to justify the details, the American people would continue to turn on them in an instant. At the beginning of this war, when it appeared that literally a Russian annexation of the entire country of Ukraine was on the table, sure. Americans stepped up. They said, yeah, I am willing to help Ukraine and pay a lot to do that. But now the Ukrainians have pushed them back and the Russians have committed to a war of attrition strategy in the east. The Ukrainians are doing the best they can, but any honest assessment tells us that the Russians are taking strategic town after town in the east and that by this honest measure that the Ukrainians are losing. So how much longer? How many more

towns in the long contestcontested east are worth the economic pain of the entire West and the destruction of the global supply chain and the sparking of a global food crisis? When you frame things that way, you get different answers, don't you? In fact, people in Washington are quietly whispering the truth behind closed doors, that the public pronouncements by the White House about how well the Ukrainians are doing are flat wrong. The Pentagon, in fact, has quietly stopped publishing assessments about how many Ukrainian soldiers have been killed to cover up any conjecture about how the war of attrition is taking a toll on them. Their excuse for this and their secrecy about what America is sending to Ukraine and why they're

doing this is that they claim by publishing that information, they would be helping the Russians. So that needs to stay secret forever. First of all, the Russians are on the ground there. I'm pretty sure they know how well the Ukrainians are doing since they're the ones who are fighting them. Second, and sounds pretty convenient for zero transparency ever, I watched this whole story play out in Afghanistan over my entire career. Every time the Pentagon wanted to hide how badly we were losing, they would classify the figures. If you asked why, it was because publishing the data would help the Taliban. History repeats itself again, this time just a lot faster. When the fall of Kabul happened, there was a lot of big talk about how surprised everyone was. If you were paying

attention to the small stuff, it was no surprise at all. Now, I hope the Ukrainian military cause is much better run than the Afghan National Security Forces. But the real question is, how do you even know? Should we accept the same platitudes that they fed us during that war right now? The more they keep us in the dark, the less say that we get. If this is about the big stuff, like sticking it to Putin, then the MSNBC allies, with more Ukrainian and gay pride flags outside their houses than American flags, will go right along. The rest of us can protest, but we're going to shut up, as long as so-called Putin lovers are captured by Russians for asking basic questions with what they'll accuse us for. The longer this thing drags on, the more stupid schemes that the

administration can try to come up with to play act trying to lower the price of gas without actually doing it. And the latest one is especially pathetic for the presidential account, who's please asking gas companies to lower prices. Because yeah, that's how it works. That's what they're going to keep up day after day and month after month as the territories in the eastern part of Ukraine get passed back and forth and blood is spilt. You will still be paying and they'll still keep repeating the same old BS. I again want to state, I understand that if you're Ukrainian or you're deeply sympathetic to that cause, that this can sound callous. But perhaps a little bit of cold, hard reality is necessary right now to cut through the

lies that our leaders and the media continue to tell us without keeping well-meaning Americans in line. You're not a Putin stooge if you're asking how much longer you can take this. You're just a normal person trying to live your life. You're not wrong to be disgusted with our president, this administration, our media, or politics in general right now. Because almost none of it is oriented towards both creating a good outcome for the world or even a good outcome for you at home. Ultimately, that is first and foremost job, the president of the United States. And with Biden, he is failing on almost every single level. And if you want to hear my reaction to Sager's monologue, become a premium subscriber today at BreakingPoints.com.

Joining us now is Nico Luciani. He's the director of corporate power over at the Roosevelt Institute. Nico, welcome to the show. We really appreciate it. Great to be here. Thanks for having me. Absolutely. So you guys wrote an interesting new report. Let's put this up there on the screen about inflation, about corporate power that we've been looking at and paying a lot of attention here to on the show. So why don't you break us down for the audience? What is driving a lot of the inflation in their lives? How are corporations responding to this moment? And is it fair? Are they taking advantage of everybody? Yeah, well, we tried to step back a little bit from the very live debates we've been having as

a country on your show about the causes of inflation and therefore the policy responses. And we wanted to see from a somewhat of a different data source, whether we could suss out whether it's a demand story, you know, too much money, whether it's a supply story, too few goods and services, or is there a layer here of companies actually taking advantage of the moment to be able to increase their profits. And so we looked not at sort of macroeconomic variables for this particular piece, but actually at the income and cash flow statements of companies across the U.S. economy. We looked from 1955 all the way up to 2021 when we had the latest data. In 2021, we pulled in

almost 4,000 companies' income and cash flow statements. And in that, we wanted to look at this really crucial indicator, which is markups. That is, what's the difference between a company's price, essentially, and their marginal costs? With the sort of thought there, if companies' costs are stabilizing and their prices continue to go up, then that company has some sort of power in the market that allows them to do that, right? If it was a competitive market, then prices and marginal costs would essentially be the same. What we found, actually to our surprise, was, you know, we've seen an increase in markups since around 1980. And that's sort of a trend that's been long going. But we saw in 2021, really, this sharp increase, almost like a singularity line, sharp upward increase in markups.

At this point in 2021, companies across the U.S. on an aggregate, on an average, are increasing their price about 76% higher than their marginal cost. That tells us that these companies are not just price takers waiting for the market to determine what the prices are, but they're active price makers in setting the price on the market. That's really interesting. And then, yeah, we can dig in a little bit more into the details in a second. Sure. Yeah. I mean, I think what's interesting to me about that, though, is that 2021, I don't think there's any, there's no debate, basically, that corporations

were taking advantage of monopoly power in order to set prices where they wanted. What about the current data? Because we're also trying to get our minds around what's happening right now at this moment. What do you think, Nico? Well, I mean, unfortunately, the firm level data is looking backwards, like a lot of data, unfortunately. And so we don't know for sure. There's some new, the St. Louis Fed or San Francisco Fed that came out with a paper that was looking at more 2022 data. And that particular piece says, you know, pretty unambiguously 50% of the increase in inflation in their mind is due to supply factors, right? Whether that's supply chains, not enough workers in the workforce, other issues, not the demand

factors that seem to be driving the Fed. Today, I mean, if you look at the market power side, we've had 30 years, right, of companies increasing their market share in particular industries, and 30, 40 years of the shareholder primacy model, where companies are looking to hit their earnings expectations on a quarterly to quarterly basis, and then setting backwards with their pricing strategies would be based on that profit expectation. And so when we hit the pandemic, those trends continued and exacerbated. So to me, while we don't have the exact data for 2022 and markups, I would be surprised if there's going to be much of a change just because we're talking about three or four decades of structural changes in our economy that have allowed this to happen.

Yeah, so let's go dig deeper then. So if we're talking about a structural problem like this, a lot of it comes down to monopoly power. It's not just the advantage, but the structure itself. What are the underlying remedies that make sense in order to do something about this? Yeah, well, I think what we found in this is that these markups have changed over time. They've responded to policy signals, and so they can be decreased. Whereas many would argue there's not much we can do through Fed policy which won't have really damaging effects, when it comes to managing or dampening corporate profits and corporate markups, that's something we can do, and we have tried and true mechanisms for that, whether that's really assertive

antitrust enforcement. Some of that is happening. It could go even more. There is a lot of discussion recently of resuscitating some of the ideas of the Franklin Delano Roosevelt administration around a World War II style excess profits tax, where essentially over a certain amount of profits, you deem it excess and that gets taxed away. So it would really reduce pretty sharply the incentive or the interest of companies

to have profits over a certain amount and therefore to price over a certain amount. That's another example of, you know, if we can think outside the box, there are policy rules to decrease those markups. Really interesting. Well, look, I think everybody should go and take a look at the report. I think the data you guys lay out is very compelling, and I appreciate you breaking it down for us. Thank you very much, Nico. Thanks so much. Absolutely, man.

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