Breaking Points with Krystal and Saagar - 8/8/23: $1 Trillion Landlord Bomb, Housing Prices Skyrocket, Partisan Split On Gov Power, Dem Threatens Biden Challenge, Biden Tanks With Young Voters, Holy Grail Of Fusion Energy, Zoom Ends Remote Work, Saudis Drive Up Gas Prices, And MORE!

Episode Date: August 8, 2023

Krystal and Saagar discuss a massive impending landlord financial bomb, housing prices skyrocketing, partisan split grows on government power, Democratic representative threatens Biden challenge, RFK and Marianne crush Biden with young voters, potential holy grail of fusion energy breakthrough, Zoom ends remote work, Saudis drive up oil prices, and a key election on abortion rights in Ohio. To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/Merch Store: https://shop.breakingpoints.com/ Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

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What do we have, Crystal? Indeed we do. I'm doing the show remotely because my kiddos had first day of school, so I had to be mommy first this morning. But we nevertheless have a wonderful show for you. We have some really interesting stories, I think, about the state of our culture and our nation starting with numbers on uh real estate and especially apartment buildings and a potential coming uh reckoning so we will get into all of that also some fascinating new numbers from gallup about the widening polarization and divides

between the two parties on a whole variety of issues. Kind of interesting which issues have become the most divided over the past number of years. We have a potential new opponent of Joe Biden in the Democratic primary that the media is actually taking seriously. We'll tell you about that. Possible huge breakthrough in terms of what is being described as the holy grail of energy. This is something we covered before. They've been able to recreate that fusion energy generation. So we'll break that down for you. And it seems that more and more employers, including the federal government led by Joe Biden, are pushing their workers back into the office after quite a while where workers have been working more remotely and

hybrid. So we will talk to you about what all of that means. Before we get to any of that, though, thank you guys so much for what you've been enabling in terms of our interviews. Really enjoyed getting to sort of spar a little bit and press one of the Biden representatives that we had on set yesterday, which is something we honestly have never really been able to do before. Yeah, that's right. We're going to continue to have him back. I'm excited to spar, I think, with him just a little bit more. We got to get some more into the weeds. We've also got some very interesting guests that I'm excited to debut here with Crystal to the show. We can't reveal yet some of our methods, but I think people are going to enjoy it. Once again, it is only a testament to some of the shocking people who do agree to come on the show to what has been built

here by our audience. So BreakingPoints.com, if you are able. We want to take a stake, a step, and actually look at some of the big macro problems that are facing the country. And one of the ones that we hear from you guys all the time is about housing. And so it's not just, though, that housing market and how it's affected your own personal life, it really also relies on the commercial property sector. And something that Crystal in particular and I have been really looking into is about the debt bomb that could come as a result of work from home and the economic changes that have come since the pandemic. So let's go ahead and put this up there on the screen. We're beginning to see this now materialize in the marketplace as interest rates

begin to rise. What you guys can see in front of you is a piece from the Wall Street Journal with two very important parts. One is called, quote, the real estate haven turning perilous with roughly $1 trillion coming due. You can see there that the outstanding multifamily mortgages from the Mortgage Bankers Association has reached well above the normal level of 2010, increased throughout the late 2010s, but has now come to almost $2 trillion. What you can also see in the costly loans chart there, which is on the right for those who are watching, is that the apartment mortgage rate is dramatically higher than the 10-year treasury yield, somewhere between the 5% and the 6%.

That's just on average. And, of course, increased interest rates are continuing to put pressure on that. And so what they call this is that it's a trillion dollars coming due in loans. Nobody knows if these are actually going to be able to even make them. Many of these, quote, private real estate firms are funded mostly by floating rate debt and small investor cash, now have even bigger competitors in the multifamily market. Some paid high prices based on rosy expectations of steep rent increases for years to come, and now they are having trouble making the math work. They have already shown that there's a huge

amount of acquisition happening in the space. And in some cases, Crystal, these loans are not even be able to be acquired by some banks and some purchases out there. So this could have a massive impact on our economy and on our banking sector in particular. Yeah, that's right. So there are a few categories of commercial real estate that are really in trouble right now. One that we've talked about before and which has gotten a lot of attention is office buildings. Understandably, people are working remotely more now. I mean, the vacancy rates are extremely high. And so you have a lot of office buildings with high vacancy rates, much lower valuations, and with interest rates rising because of the Fed, this not only ups the mortgage rates for, you know, residential homes where people are just buying homes, this also really hikes interest rates for all sorts of commercial properties.

So you have that as a very obvious problem and a lot of that debt coming due, what's been described as a debt bomb sort of looming over all of that. But the second most troubled class is actually apartment buildings. And this has escaped some notice. But traditionally, this class has been seen as very sort of solid, very reliable. Of course, people have to have a place to live. They have to be able to make their rent. And so some of these property owners thought that they could just raise rents into oblivion, and that that would be able to make the math work but with interest rates going up as rapidly as they have a lot of them are now in really tough positions so um from that article that we had you have one peter sodoloff who they describe as a veteran

real estate finance executive he described this as a hydrogen bomb scenario um You also have some indications that even more sort of solid, you know, longstanding groups in this space that are having trouble. They say some veteran real estate investors that weathered past storms look vulnerable. Veritas Investments, one of San Francisco's largest landlords and partners, defaulted on debt backing 95 rental buildings during the past year, it stands to lose more than one third of its San Francisco portfolio as a result. So obviously, you know, if you've got landlords that are struggling and that are trying to pass the buck onto their tenants, trying to hike rates, hike rents, that's going to be a huge issue.

If you have landlords going into default, if you have cascading impacts on the banking sector. This all has potentially massive ramifications. Yeah. And as I referenced earlier, let's put this up there from Bloomberg, another great chart that we can actually go ahead and show people, which is that many of the property loans that are outstanding right now are so unappealing that the banks will, quote, want to dump them. What they point out is that commercial property loans have a massively dried up market with very few options for an easy exit. All these lenders, including JP Morgan, Goldman Sachs, they've been trying to sell debt, which is backed by office hotels and apartments in months, but are having trouble actually finding anybody to buy

this because nobody believes that the underlying loans will actually be made whole. And as you can see, actually right in front of you, it shows why apartments is really second to office buildings in what's in trouble. Property values are down some 30% in the office sector just over the last 12 months. Apartment buildings, on average, almost down 15%. Hotels, industrial, seem to be hanging on. Malls, we did an entire segment about that, and even self-storage have taken a hit to some degree. So you have two problems there. Not only are you having the interest rates continue to go up on mortgage and on loans and some of these adjustable rate things, but you're also seeing an overall decline

in the value. So these guys can't even sell it without being made whole. So this is a real nightmare scenario because the banks can't get anyone to buy the debt. And then once these people do default, if they do want to sell the underlying asset, they'll have to sell far below maybe even what's outstanding on the actual loan. So the big problem is that a lot of this also is concentrated in previously prosperous areas. As you referenced San Francisco, I was reading that the tri-state area in particular, which has suffered population loss during the pandemic, has also been suffering. And of course, they have had the biggest problem in terms of work from home and how much of

their economy, even here in Washington, D.C., many northeastern cities, relied on office culture. I think it relates to remote work, the block that we're going to be doing later in the show. But, you know, the economic changes here could have a serious, serious effect as all these loans come due. And we already know, Crystal, that the bailout calls are going to be coming soon. There's just no way that they're going to be able to take this laying down. And I think that's why we're trying to prep everybody for it. Yeah. And there's a couple other things to say about this. So the trouble in the office space class and the trouble in the apartment building

class is a little bit different. So for office space, you both have the fact, and this is why office space is the most troubled, you have the fact that interest rates have spiked and you have these super high vacancy rates, especially in cities like San Francisco, cities like LA, cities like New York. Apartment buildings are actually full. They have low vacancy rates. We've had an issue of not having enough apartment buildings being built, too low supply. There's actually, I just saw some charts about how there's a huge, actually, increase in the amount of apartments that are coming into the market. So that is good news for renters. So the issue for apartment buildings isn't low vacancy rates. The whole issue here is basically interest rates. The fact that the Fed hiked rates at such a rapid pace by historical standards,

that's what's caused all the stress in terms of that asset class. And you had some new players that got into this game that came in with a set of assumptions that turned out not to be true. And so they just can't make the math work now. But one other commonality with the office space is how much of that debt is now coming due. So banks, you know, they see this writing on the wall. They see that these assets that they have are in trouble. They're trying to offload them in some sort of an orderly fashion, and they just can't find buyers. So even though in some cases they're willing to take a haircut just to have liquidity so that they have some sort of stable basis and they aren't overly exposed, they aren't able to find anyone to take the deal. So it's hard to even say at this point what the appropriate valuations are because there are so few buyers in the market to actually figure out what the market valuation is. They flagged in that article one

potential big sale that's being managed, they say, by brokerage Newmark Group Incorporated. The FDIC, the Federal Deposit Insurance Corporation, is actually seeking to offload $60 billion of real estate backed loans that they ended up with because of signature bank failing so fdic ended up with this um you know 60 billion dollars in real estate-backed loans that they're now really trying to offload so that's going to be one indication of exactly exactly where these valuations are since they kind of have to get rid of the assets that they have yeah and this is all you know like i said it's going to be looming over the economy it's going going to affect bank stocks. The banks themselves are very much paying attention to this. Put this up there on the screen. This is a quote from the Goldman Sachs CEO just from a couple of days ago. He says,

quote, there is no question the real estate market, in particular commercial real estate, has come under pressure. That came directly as his own bank is trying to unload hundreds of millions of dollars worth of loans from his actual portfolio and trying to sell it off. So there you go. Everybody keep an eye on that because we can certain that if they do fail, they'll have their hat in hand coming here to Washington asking for money. But speaking of money and of real estate, it's weird because while the commercial sector is not doing well and there's all these issues on that side, at the same time, housing affordability has never actually been worse here in the United States, especially given what's going on with interest rates. So let's go ahead and put this up there on the screen. The mortgage rate actually just this week hit a 23-year high.

As Mortgage News Daily writes, quote, is there any hope? And as they actually point to, we now have mortgage rates so high that we haven't seen them since 2001, near the dot-com era. I'll let you guess how exactly the price looked back 23 years ago and ask you whether it was maybe a tiny little bit affordable, even if the interest rate was high. We have not actually seen any aggregate decrease in price in real estate markets. In fact, the news just came out today, Crystal, that in two-thirds of all real estate markets, prices have never been higher for homes. So it's not that prices dropped for homes as mortgage rates continue to go sky high. It's just that they stopped growing

as much as they did over the last decade or so, and in particular, the last two years. The underlying value, because of our lack of supply of housing, has actually not gone down. So the interest rate remains so high now that the math on some of these transactions really starts to boggle the mind. One tweet in particular, put it in perspective, let's go and put this up there, shows you. Let's say you have a new mortgage math. You have a $1 million. This guy's from San Francisco, so that's why he's using these numbers. But it applies to everybody.

Say you buy a million-dollar house with $200K down and a 7% rate mortgage. That's an $800,000 loan. Over the first three years, you will pay $193,000 on this loan, $5,322 a month. That's a lot of money. After that $193,000 of payments for your $800,000 loan, the loan now stands at $774,500. You have paid $166,000 in interest and just $25,000 in principal. So as you can see from that, Crystal, the math here is just absolutely brutal. And yeah, like I said, the guy lives in San Francisco, so the numbers are very large, but that same math applies to anybody. Even if you're not taking out a jumbo mortgage, even if you're saying you're buying a three or a $400,000 house, the proportion

is not going to change. You're going to be paying vast majorities of your sums in the initial years straight to the bank and interest payments because the price of the asset remains so high. I mean, really, we have never seen housing less affordable than it is right now. And then worse, not only is it not affordable, OK, five years, most people, they're not even barely able to put up 20%. So let's take in, they're putting 5%, maybe 10% down, something like that. And then five years from now, they have a couple of kids. Like, hey, I want to move. And you try to sell. You've got no equity in your house. You have almost nothing. You're effectively renting it from the bank. Whenever you add on top of that, like property, property taxes and everything, you're

renting it from the bank in the city. You've got almost nothing in this house by yourself. So that strikes at the core and the bedrock of what the American dream was supposed to be. Yeah, it's the worst of all worlds. I just saw a report yesterday evening that home prices are ticking up again, hitting record highs in nearly two-thirds of major markets. So I'll never forget, Sagar, when we covered a poll of the number of people who were cheering for a housing market decline because they were hoping that maybe, maybe prices will come down and I'll have some shot

at some point in my life at being able to become a homeowner which the way that we have our economy structured is like the way to build sort of stable, middle-class prosperity. And it's been the exact opposite. I say it's the worst of all worlds because on the one hand you have very low supply because a lot of people who have houses don't want to sell because they don't want to have to get a mortgage rate at the new very high rates. You have those high rates making it so unaffordable for anyone new to get into the game as well.

Then you have prices that have remained high and now are actually ticking up. So this is a report from Black Knight that I'm looking at. They say prices grew by 0.8% in June after slowing for more than a year, pushing prices to record levels in around 60% of the nation's major housing markets. So when you consider very high mortgage rates and record high prices, it's just a disaster for anyone who ever aspires to be able to get into this market. And then you pair it with the last story about all of these landlords that are under financial pressure also because of the rates. And they're trying to hike rents. So renters are getting screwed as well because of that scenario. You just I mean, housing is this underlying issue that I think gets far too little attention in Washington.

But it's one of the most important factors in people's quality of life. Yeah, I think you're absolutely right. We have to continue to stay on top of it. This is one of those where, you know, we hear from everybody and it's downstream of a lot of things. When you got no property, that means you have no real equity in terms of society. A lot of it drives political participation. Permanent rentier class is one of the things that we've always striven to make sure that we avoid here in the United States.

It has all kinds of social downstream, terrible effects really. And then it really is the number one way to accumulate any sort of intergenerational wealth over the years. It's one of the most important economic markers. I'm not saying things should work this way, but that is just the way it is. If you're going to deny that to the entire new generation, don't be surprised what comes down the pipeline. So we'll continue to keep an eye. We've got some really fascinating new numbers from Gallup about just how the two major political parties, how the base of those parties feels about a whole variety of issues.

And the fact that over the past number of years, there's been a growing divide on basically all of those issues, but some a lot more than others. And the ones that are a lot more than others are kind of revealing in and of themselves so let's go and put this up on the screen from Gallup um they say here you've got changes in partisan gaps on selected issues and let me just explain what you're looking at here for a minute because I found this presentation a little bit confusing but you have on the left side, it explains what the issue is. So federal government has too much power. Human activity is main cause of global warming. Completely or somewhat satisfied with K-12 education in U.S. Abortion should be legal under any circumstance. They tested a whole lot more of these. But the ones that we show here are the issues where the polar, where the divide is the largest. So federal government has too much power. That was the

category where the divide was the absolute largest. Then global warming. Then how you feel about K-12 education. Then whether abortion should be legal under any circumstance. They say in this article that political polarization since 2003 has increased most significantly on issues related to federal government power, global warming, the environment, education, abortion, foreign trade, immigration, gun laws, the government's role in providing health care and income tax fairness. They go on to say that polarization has remained more or less the same on certain moral issues and satisfaction with the state of race relations. Let's go ahead and put the next graph

that we have up on the screen so you can visualize a number of these as well. So you can see here the graph between how Democrats feel about these issues and how Republicans feel about these issues. So you've got, you know, pretty wide divide there between those who believe that government should ensure everyone has health care. The next one is about protecting the environment has priority over energy development. Very wide divide there too. Wide divide on gun laws. Wide divide on global warming. Another one on global warming, abortion. Federal government has too much power. That one is really interesting because you can see the way that basically around you know, around 2010 with Obama and the rise of the Tea Party, Republican sentiment that the federal government has too much power

really spikes. And Democrats have been going in the opposite direction. They've been, you know, feeling less concerned about the federal government having too much power. And then you have a, you know, widening divide also on the government should do more to solve the nation's problems. I'll tell you, Sagar, the one of these that I actually found in some ways the most interesting was about foreign trade, because I don't know if you caught this, but foreign trade is opportunity for economic growth. Back in 2003, Republicans and Democrats basically felt the same way about this. It was like 50-50. So 50% of Republicans were like, yes, foreign trade. 50% of Democrats were like, yes, foreign trade, roughly. Since that time, the Democratic number has actually skyrocketed. Democrats now,

74% of them say that foreign trade is an opportunity for economic growth. Republicans have more or less remained flat. It has ticked down a little bit, but they're now at 49% that say that foreign trade is an opportunity for economic growth. And to be honest with you, it was sort of surprising to me. This was an issue I would have guessed that both parties became more skeptical of foreign trade. The Republicans became a little bit more skeptical of foreign trade, but the really, you know, notable numbers here are how the Democratic numbers have just absolutely skyrocketed. And I can only attribute it, and a lot of these polarization numbers are, I just attribute to the way that Trump shapes so much of our politics, the way that partisan affiliation, you know, trumps any sort of like independent thinking in a lot of regards,

like wherever the team is, that's where I'm going to go. And Democrats increasingly define their team as just being the opposite of wherever Trump is. And so if you look at a lot of these numbers, that's kind of the dynamic that you see unfolding, in my opinion. Yeah, it's actually very unfortunate because you can actually see the split on foreign trade happen almost exactly around 2013. But there's also a big educational polarization element to this. I could tell you, I mean, you and I, we both came through econ programs in college. Any basic econ program in college, they're going to hammer something into your brain.

They're like, trade is good. Foreign trade is great. It's about net economic benefit. It's about this. And it's only until you start reading about the cost of so-called net benefit when the net benefit goes to China or Mexico or Canada or the EU or Japan. And then you're like, oh, well, actually the cost on the side of the equation was us. And then the benefit was to the people over there and then a bunch of bankers here in the US. Now we're not talking in economic terms. We're talking a little bit more in human and political economic terms. That's part of the issue, I think, is a big one. Education polarization really has its fingers all over this. And, you know, you could actually really make sense. But same with culture. And in some ways you can understand. If you're a Democrat in 03, we just invaded Iraq. Of course the government has too much power. But then Obama takes over,

you know, you start then, you know, a slight dip-ish, you know, I guess during the Trump years, you mostly agree with a lot of stuff that Biden is doing. You really weren't all that concerned about lockdowns or any of this stuff. These are things that you're mostly, you know, aligned with-ish. So it's a lot of it comes down to like the topics of the day. I wasn't surprised by that number. The trade number actually was, you know, probably the most troubling one to me. In terms of where the biggest difference in Republicans have, you can also see really what happened with Trump. The fact that the immigration number dramatically declined almost 30%. And also the quote, great deal or quite a lot of confidence in police. That's not actually all that surprising. I was actually a little bit more heartened around where some of the things where people,

it seems people have become much more personally libertarian. And I don't think that's necessarily a bad thing. So for example, like if you look at things like not only the gay marriage number, but if you really look at things like divorce being morally acceptable or people having children out of wedlock, all of that, no one's saying these are necessarily good things like that. that was so prevalent in our politics from the 1970s really up until the 2010s, that is a basically dead consensus, which for somebody like me who grew up in the evangelical heart of Texas, I can't help but say it's a good thing. But of course, that's going to dramatically change things in the way that all of our culture looks like and how people personally feel about certain things. I think that's very interesting. It was fascinating to me the places where things diverged. Those places tended to be

issues that have been put at the center of our debate in recent years. You know, immigration, huge divergence. How you feel about the police, huge divergence. Climate action, huge divergence. The nature and role of the federal government, right, which is really very sort of meta conversation, huge divergence. But yeah, it was also fascinating to me the places where the trend moved in the same direction. So even on something like favored death penalty in cases of murder, for both parties, the trend was actually downward. There were fewer people who favored the death penalty in cases of murder. For both parties, the trend was actually downward. There were fewer

people who favored the death penalty in both parties. Now, there's still a wide split. 73% of Republicans still do favor the death penalty. It's 37% of Democrats. But it moved in the same direction. Marijuana should be legal. That was a big one. Trend moved definitely in the same direction. Democrats are at 83%. Republicans are now at a majority, 55% think that marijuana should be legal, which makes it, you realize how insane it is that it's not legal yet, even with the Democrat in the White House, but I digress. But the trend moved in the same direction. Same-sex marriages should be legally valid, same direction. Having a baby outside of marriage morally acceptable, divorce morally acceptable,

sex between unmarried couples morally acceptable, satisfied with state of race relations. The satisfaction with the state of race relations in both parties actually declined. So in 2003, Democrats were, it looks like at about 45%, somewhere around there. Republicans were actually maybe like 55%. And then today, Republicans have declined down 40%. Democrats have declined all the way down to 23% in terms of their state of race relations satisfaction.

But again, both parties moving in the same direction. And here's another one that's interesting. Favorable opinion of Cuba. Democrats all the way up now at 49%. Republicans also trending in the same direction at 35%. So it is fascinating that while on the, you know, core issues that have been the subject of a lot of cable news debate

and a lot of, you know, political struggle over these past number of years, you see these increasing divides. But let me give you one more where the trend is in the same direction. Government should ensure that everyone has health care. Democrats now all the way up at 85 percent that say, yes, the government should guarantee everyone has health care. Republicans have also jumped up since 2013. They're now at 30 percent. So over the past decade, that has also moved in the same direction. So it's fascinating to dig into these numbers. The one, like I said, the immigration,

that there was a huge divide, didn't surprise me. Police, gun laws, whatever, that didn't surprise me. I was surprised by the numbers on foreign trade, because I thought even on the Democratic side, post-Obama, given the energy behind Bernie in 2016 and again in 2020, and his skepticism of these bad free trade deals, including NAFTA, including TPP, I would have thought the Democratic numbers would be more mixed, but nope, not at all. Well, yeah, I think that's unfortunate. I mean, I think it also does come back to partisan breaks in terms of like base of the party as it becomes more college educated. That's going to reflect. But that doesn't necessarily mean also the people who like do still vote Democrat who are working class. So there's still going to be some separation,

I think, within that. But yeah, I mean, it certainly does inform a lot of what's going on today. So I thought we broke it down. Yeah, absolutely. All right. Let's move on to this next piece, which I think is very interesting. So there's this congressman, Dean Phillips. He's considered sort of a centrist-y Democrat in Minnesota. And he has for a while now been saying, you know, Biden is too old, basically. And I think Democrats should look at their options in terms of the next presidential nominating contest. He's now making those calls a little more assertively and not ruling out the possibility

of he himself jumping into the race. So let's take a listen to a bit of what Congressman Dean Phillips, Democrat of Minnesota, had to say. Democrats are telling me that they want not a coronation, but they want a competition. The New York Times poll from this week shows 55% of Democratic voters want some alternatives to the current people in the primary. 83% of those under 30, Democrats under 30, want alternatives, and about 76% of independents. So I just want to make my case. When are you going to decide?

I think, well, let me get to my point. Okay. So if we don't heed... I've given you some room. Yes, you have. If we don't heed that call, shame on us. And the consequences, I believe, are going to be disastrous. So my call is to those who are well positioned, well prepared, of good character and competency, they know who they are, to jump in because Democrats and the country need competition. It makes everything better. That's my call to them right now. So if they don't, you will. I'm not saying I will. I think I'm well positioned to be president of the United States.

You do. I do not believe I'm well positioned to run for it right now. People who are should jump in because we need to meet the moment. The moment is now. That is what the country is asking. Would she, in your mind, be the heir apparent if for some reason the president of the United States were not to seek the nomination in 2024? I'm glad you asked the question, and my answer is really simple. Competition, as many people as humanly possible with the talent, the time, the energy, the ethics to enter a primary should do it. We have 12 Republicans as options for Republican primary voters. Right now, we only have three in the Democratic side. I believe in competition.

We're the Democratic Party. Democracy means the freedom to make choices, and we don't have many of them. I mean, it's a real classic centrist pitch because there's no content to it. It's just like choices. I like choices, which, listen, I agree. We should have democracy in the Democratic Party. Democratic voters should have choices and maybe this guy is too old. I also think it's funny, Sagar, that no one knows who Dean Phillips is. No one has ever heard of Dean Phillips before in their life.

He's like the most forgettable, unimpressive character you could possibly. And this is not a no offense to him, but this is like the most plain vanilla random congressman you can possibly imagine. And yet this guy gets taken seriously by the media and the two candidates that are actually in the race already. Don't explain that to me. Oh, it's outrageous. You know, you got some freaking backbench in congressman on Face the Nation. This is one of the most supposed important political shows in the country. Marianne Williamson and RFK Jr. are polling well above the threshold for a debate. To my knowledge, RFK has not been on Face the Nation,

nor has Marianne Williamson. I mean, if you got Major Garrett there treating this guy like he's serious, what, just because he was elected to Congress? It's just one of those where it's ridiculous the disparate amount of treatment which is happening here, but also so deeply indicative of so many problems in our primary process. We have it, too, in many cases on the Republican side. You could see Ron DeSantis. Look how much more seriously he's taken than Vivek Ramaswamy. By many accounts, they're polling in very similar positions. Vivek's media coverage is

beginning to tick up with the polling. Maybe I guess they're a little bit more likely, but, you know, they're still treat Mike Pence and Nikki Haley, people who are poll like one, 2% barely, you know, as serious candidates. And then when you really put it up against people like Kennedy and Williamson, you're just like, this is insane because Ramaswamy is polling around the same levels as RFK or Marianne. Same with many of the elected Republicans, you know, in terms of who are in many cases pulling even below them. And yet they're getting media treatment and not them. So it's just totally crazy. And this guy, he hasn't even announced Kennedy and Williamson are actually running.

Like, what are they doing? Yeah. Well, and I love to how his call for choice doesn't include any sort of reflection on the candidates in the race or acknowledgement that they really even exist. So there's that as well. But I mean, this has sparked some speculation. You see these pieces still pop up in the press of like, oh, donors are still evaluating their options. And maybe Biden is still going to pull out of the race, which I think is really fan fiction. And, I mean, do you think there's any chance this guy actually runs? I find it very, very unlikely that he would actually jump into the race. I feel like he just wants to sort of make a little bit of name for himself and a little bit of waves in the press right now. Yeah, it's possible.

I don't think most people are gonna care, you know, really, either way. But, I mean, I guess here's the only pro case for doing this. By getting people like him to say it in mainstream media and saying we should have a debate, we should have some competition, maybe they'll wake up to the fact

that there already is competition and it could actually lead to something. But I'm not going to hold my breath. It's such a stupid, you know, it's such a stupid view into how these people actually view democracy. I think that's a good point, though. I think that's a good point. It puts it on the table. I mean, it's silly that it has to come from a backbench congressman that nobody's heard of. But that is the way Washington works. When they say there's no serious candidate in the race, it's partly because you have, you know, people who have not been held elected office in Washington, D.C., who are the ones in the race. So they find it more difficult to dismiss someone who is a member of Congress who, you know, even

though he doesn't have any like ideological content to his critique, is at least standing up for the idea that there should be some democracy and that there should be some choice, a notion that overwhelmingly is held within the Democratic base. And we're about to go over some of the numbers with young people and Joe Biden, the way they feel about this. I mean, they just by huge numbers, want a different candidate, are backing other candidates actively, want to see debates. But this is really the reality within a lot of the Democratic base. So, you know, potentially, if you have more people who make some waves like this, maybe a dam will break and maybe there'll be more pressure put on Democrats, or at least a light shined on their hypocrisy of running around talking about how much they care about democracy

and at the same time doing everything they can to block the actual Democratic will of the people. Yeah. Well, why don't we go ahead and get into the younger voters? Yeah. So this actually jumped out at me in the last New York Times-Siena poll of the Democratic side of the race. I was digging into the crosstabs and the numbers for Joe Biden among young people, 18 to 29 is the demographic category, are just really rough. Let's go ahead and put some of these numbers up on the screen. Here's his approval rating by age group. So both in this one, both 18 to 29 and 30 to 44 in the 30s. So 18 to 29 is at 36% approval, 30 to 44 is at 34%. And then the numbers get better as they get older, although none of them crack 50%. Let's go put the next one up on

the screen as well. This could give you some clue as to why 18 to 29 year olds are not falling in love with Joe Biden here. 64% say that the economy is poor. They rate economic conditions today as poor. 27% say only fair. And then you have, you know, a very small single digit numbers saying it is good or excellent. Let's go and put the next piece up on the screen just so we can lay all of this out. Now, this was what initially caught my eye. They asked, okay, if the election for Democratic nominee were today, and this was among Democrats who were 18 to 29 years old, who would you vote for? Joe Biden gets about a third of the vote of young people. RFK gets 13%. Marianne gets 27%. And Don't Know is 26%. So if you put RFK and Marianne together, they are polling way higher than Joe Biden among 18 to 29 year olds.

And then you still have a quarter of the electorate that says, I don't know. So for Joe Biden, the president, to be getting one third of young people behind him, now you can see why he's making some moves on student debt relief. Let's put the next one up on the screen regardless of who you prefer in the democratic primary do you think the democratic party should re-nominate joe biden again this is among 18 to 29 year olds 17 percent

say nominate joe biden and 80 percent say nominate a different candidate so listen i know people say oh young people they don't show up to vote etc etc it's actually not true in recent elections uh say nominate a different candidate. So listen, I know people say, oh, young people, they don't show up to vote, et cetera, et cetera. It's actually not true in recent elections. That demographic, 18 to 29, has been showing up in much higher numbers than they historically have. They were really key in the midterm elections

in forestalling a red wave. They've been energized in general in the Trump era. They were absolutely essential part of the Joe Biden victory back in 2020. And they have a scathing, scathing review thus far of the Biden administration and are actively evaluating other options to include, you know, other candidates in the Democratic primary race and also potentially Cornel West in the general election. Yeah, when you add in Cornel West to this, you really see the young voter problem that they have and why they freak out about it. And also, I would remind, because the election was so close, if you just give margins just a little bit, both on young people,

old people, black people, Hispanic, wherever, by taking others for granted, you're putting yourself in a very vulnerable position. And also, Biden doesn't even make an effort to speak to people. The president today is in Arizona, and I saw that he was going to sit for an interview. I said, oh, that's great. Maybe you'll get a question about Hunter Biden. It's with the freaking Weather Channel. That is the he's decided to sit with. And there's a, listen, I'm not, you know, I don't want to denigrate my colleagues at the Weather Channel. I'm sure they have some great questions to ask him about the heat wave, and that's awesome. But, you know, the fact that that's the only one that he's going to be doing, or has done now, actually, in weeks, as an actual interview, we all know what's going on here.

He makes no effort to either reach out to people, to reassure people. That's why only 17% of the young people even want him to come. know what's going on here. He makes no effort to either reach out to people to reassure people. That's why only 17% of the young people even want him to come. You know, in terms of the people who are speaking to their interests, you've got Kennedy, you've got Williamson, you've got West, people who are actually making an effort. I mean, I see it all the time in terms of people who are younger and not as engaged in the political process and they have no faith. I don't think it's a surprise that his approval rating is really only high-ish amongst people who are over 60 and very much more traditional in their political beliefs. So it's a problem really of his own making. And they can continue to ignore it for as long as they want. But eventually, that bill is going to come due. I don't know when. I keep saying it.

Probably take two decades or something like that for it to truly materialize. But, you know, don't let anybody say that nobody wasn't talking about it from the beginning. I mean, listen, think about how much they denigrate Marianne. Remember what Karine Jean-Pierre said about her from the podium, just so snide and sneering, dismissive, filled with contempt as she tried to like artfully deliver her preplanned joke and still stumbled over it. And Marian is almost tied with Joe Biden among this demographic. Like, just think about that. Think about the way that she's been shut out

and the level of dissatisfaction that there has to be that they are searching for an alternative that the media will not present to them whatsoever. I think that's remarkable. And you know, I dug into some of the like, OK, well, what's the issue set for young voters and does it look a lot different than the issue set for older voters? And it really doesn't. I mean, it's the economy. It really ties in with what we were talking about earlier with like the housing numbers. You know, this is this a generation

of people really now two generations of people who are looking at the landscape. They're like, I'm never going to be able to own a house. I have no idea how I'm going to afford to have a family. I'm crushed under this student debt load. I am worried about the climate and I don't see you taking the action that I think that you should. And so they are justifiably very dissatisfied with what the Biden administration has been able to do for them in terms of just their material reality, being able to imagine themselves in a stable, prosperous, solid middle-class life. Those chances feel vanishingly small. And it wasn't always this way. I always think it's important to point out at the beginning of the Biden administration, young people were his

strongest constituency. At the beginning, they were administration, young people were his strongest constituency. At the beginning, they were very hopeful. They voted for him in huge numbers, very supportive of what was done in terms of pandemic relief and some of the student debt forbearance and some of those early programs. But now, as all of that has been stripped away and you're left with inflation, you're left with this housing market, which is crushing to people. It's no surprise that it's not that they're voting Republican. They're just, you know, disgusted with this Democrat. They want a different Democrat or

they're open to a third party. Yep. And look, we'll we'll see how it works out for Joe Biden come 2024. Personally, just don't think it's going to work out all that well. Okay, let's go to the next part here about fusion. We've talked about the LK-99 superconductor, and we've got some more news on fusion, which is kind of the holy grail of power of recreating the core of the sun, which I think is pretty cool whenever you say it out loud. Let's put this up there on the screen. U.S. scientists have now actually repeated and replicated the fusion power breakthrough, which excited the world just last year. As a catch-up, it has achieved, quote, net energy gain in a fusion reaction for the second time,

fueling optimism that progress is being made towards the dream of limitless zero carbon power. Physicists have sought since the 1950s to harness the fusion reaction that powers the sun until just December of 2022. No group had ever been able to do it in terms of energy from the reaction that it consumes, which is known as ignition. So researchers at the federal Lawrence Livermore National Laboratory in California, who actually achieved this ignition last year, repeated it on July 30th, producing higher energy output than actual input. Now, there's still quite a long way to go. And just, if anybody's interested in the mechanics, quote, achieved by heating two hydrogen isotopes, usually deuterium and tritium,

to such extreme temperatures that the atomic nuclei fuse, releasing helium and vast amounts of energy in the form of neutrons. Really fun to have this actually happen right after the movie Oppenheimer. And what they talk about is that it is, quote, "'One of the most impressive scientific feats already "'of the 21st century.

And if they can not only continue to replicate the experiment on a consistent basis, but then try to make it cost effective, scalable, and of course safe everywhere, it could unlock, of course, literally quite like limitless energy and allay a lot of the concerns that we have and change superconductors if that technology all works out. So it's a really exciting time, I think. And it's always important, look, everyone hears about crazy breakthroughs. I even said this on the superconductor, you got to wait for replication. We're still waiting on that, by the way. But when you do have at least one verified instance of this happening again, you could say, hey, maybe in a decade it'll get to a prototype stage.

And I know that that's very frustrating for people to kind of take in that timeline. But, you know, energy wasn't built. Rome wasn't built in a day. Like oil took decades really to catch on really from its discovery. So these things move at a slower timeline than we might want. But that doesn't mean that 30, 40 years from now we won't be living in a very different reality. Yeah. So to put this really simply in terms of the science. So, you know, if you saw Oppenheimer, that was all about splitting the atom apart. That's fission. This is fusion, which is taking two atoms, two lighter atoms and making them into one. So it's sort of like the opposite of the nuclear

reactions that we have been able to achieve for both good and ill. So in terms of what this would mean, based on, we covered the original ability, the original test case where they were able to achieve this sort of increase in energy, is like the the gold standard for proving this out as a concept of something that could potentially work for energy generation in the future they say these reactions emit no carbon produce no long-lived radioactive waste that's obviously an issue with nuclear power and a small cup of the hydrogen fuel could theoretically power a house for hundreds of years. Also in a hopeful sign, this replication of the initial experiment, they were actually able to generate somewhat more energy than they were the first time around, which moves it one step closer to, you know,

being out of the lab and into some sort of a practical application. Because that energy loss in terms of, you know, if you're able to actually produce this on a commercial capacity, it's still a very, very, very difficult challenge to solve. But the fact they were able to increase the amount of energy that they obtained here is an encouraging sign. So one of temper expectations, like you were saying, Sagar, it's still a long time before they'd be able to figure out how to make this use for commercial applications or household applications, et cetera. We are a long way from that. But the fact that this wasn't a one-off, that they were able to recreate it is really exciting and very encouraging.

Yeah. The jump from the theoretical to the engineering side is kind of interesting. So right now, one of the ways that they achieve it is through lasers. And one of the only reasons they can do it once a day is because the laser needs to cool down. The problem is that to actually make this scalable and commercially viable, you can't just use the laser once a day. You have to use it, quote, several times a second. And so getting from a point where you can use it once a day to several times a second sounds like a little bit of an engineering challenge in order to try and make this commercially viable. Who knows if we'll ever even be able to get there. But it certainly does sound cool. And what the researchers are pointing to is like once you've got viability and you start to move things into the realms of like material science, engineering, and all that, it's not that it still can't fail.

It's just that things – it's like another step forward in trying to make this technology actually move forward. That's why I think it's particularly exciting. We see a lot of the same issues in nuclear power. One of the bigger problems is around cost. And it's largely because we don't have the capacity to scale. Largely because of commercial factors in terms of design and things don't have economies of scale develop because there wasn't enough investment. And a lot of it was allowed to like rot on the vine over the last 50 years. So scale and the ability to implement on a cheap or relatively cheap and consistent basis is the most important thing. Maybe we'll see it. I don't know. I don't know if we'll see it in our lifetime, but I hope so. Yeah. Yeah. Well, just to give people a sense of the time frame that we could be talking about, this fusion reaction has been posited as theoretically

possible since literally the fifties. They've been working on this and it wasn't until December of last year that they were finally even able to demonstrate in a lab under ideal conditions, the reaction that they have theorized for, you know, 70 years. So, you know, will it take another 70 years to get out of the laboratory and out into the wider world? Impossible to say, but just to give you a sense of the timeframe that it took even to get to this initial step and then their ability to recreate it. All right, guys, one more cultural phenomenon that we wanted to take a look at, because this is coming down from the White House. There seems to be a major push really happening right now to get workers out of their homes and back into the office. Of course, this largely applies to white-collar workers, blue-collar

and service workers. Never had this luxury, but nevertheless, let's put this first part up on the screen. President Biden is pushing to end remote work era for federal government employees. He's calling for his cabinet, according to Axios, to aggressively execute plans for federal employees to work more in their offices this fall after years of working remotely. This is the Biden administration's most overt push yet to get them back to their offices, a dynamic that many businesses have struggled with as Americans are rather enjoying their remote or hybrid work situations. But there's been political pressure on the White House to curb remote work that's come primarily from Republicans in Congress who blame remote work for delays and backlogs. On the other hand, Democrats and advocacy groups

and unions largely blame lack of funding for the backlogs and site telework as a key tool in recruiting staff. I think there is something to that because we've seen workers willing to take lower salaries if they get that flexibility in pay. You also had the D.C. mayor, Muriel Bowser, who's very concerned about her city, which we can attest to the fact is a lot emptier than it was pre-pandemic. She's really been pushing also to try to get the White House to force workers back in to try to revive the D.C. economy. She said recently we need decisive action by the White House to either get most federal workers back to the office most of the time or to realign their vast property holdings for least hybrid, much of their office space is also completely vacant. So the city of D.C. is like, listen, hey, if you're not going to use it, at least let us try to get a business in here or

something going on because, you know, this this is killing us downtown. Yeah. I mean, here's the thing. I have sympathy with people who want to work remote. But I was telling you yesterday, I saw that the FAA is apparent, many parts of the FAA, not just, not the air traffic controllers per se, don't want to go back in the office. And I'm just like, look, guys, my flight was actually literally canceled because of FAA incompetence. So unless that starts working properly, like, that's just not going to fly. And so I think that whenever it comes to federal workers and all that, I don't really care about the state of Washington, D.C. I do think it's pathetic how badly things are going down the tubes here.

I don't think that's the federal government's fault. A lot of that has to do with Muriel Bowser and, of course, the people who live here who decide that this is the hellhole that they want to live in. Put that aside. I also think, though, that this does show and signal how coercion on workers is almost certainly, we're almost certainly entering that era when you combine it with other companies that are also doing this as a result of both city pressure, rising interest rates, and then, frankly, just like a totally changing business environment. Things are not only returning, they're not returning back to normal per se, they're entering a new era where a lot of the zero interest rate phenomenon and all that, and I'm talking specifically of the

business world and, you know, your ability in order to float a lot of stuff on debt, a lot of that is going away. And I think we kind of see that with the Zoom announcement, that probably, that one more than anything and any other company that we've seen call people back into the office. Yeah, let's put this up on the screen. So Zoom, the product that I am actually using right now to come to you live from my house and which millions of office workers have been using for their meetings during the pandemic era. Zoom is now calling their employees back to the office. Now, this headline oversells it, in my opinion, a little bit

because they are requiring their workers to be on site two days a week. A hybrid approach, they say, is most effective for Zoom. This is per a Zoom spokesperson because it will be in a better position to use our own technologies, continue to innovate, and support our global customers. However, when you have the bedrock of the work from home infrastructure, when you have that company saying like, we want our employees back in the office,

I do think it is a sort of sign of the times. Now let me give you the other side of the equation, which is remember, Hussar, we covered how actually the workers who liked remote and hybrid work the most were like the managers. It was the boss class. They've been enjoying it the most. And so that may actually make it so that the trend back into the office is slower because the people who have the most power within the organization are the ones who are you know most reluctant to give it up I also pulled there's some new research about the

impact on productivity of workers working remotely uh this is from economist mag they compiled a number of studies from recent research let's put this up on the screen. I think we've got this for our last element. But they found that some of the original research seemed to indicate that work from home actually made workers more productive, that they got more done. There's now some updated research that shows the opposite impact

that some of these employers are leaning into. Like, ah, now we've got studies that say it actually makes you less productive, so we want your butts back at the office. But there's also a lot of research, and to me, this is what's most important, that work from home and hybrid and just having choice in your work situation creates much happier employees. Like employee productivity is not the end all be all. Now, if there's critical functions that need to get done with the federal government, et cetera, et cetera, like obviously you have to take that into account. But I think it's also important that we take into account how people's lives are and their work-life balance and how much they're like enjoying

their situation. And because you have very clear numbers that people like remote work, they like having the choice of flexibility, they are willing to take pay cuts in order to maintain a hybrid work environment. I do think this trend is here to stay because you're going to have companies that are competing for workers based on how flexible their work from home or hybrid work schedules are. Yeah. And look, as I said, I think it's complicated. And the managers, of course, like it for a reason. I think there's a lot of cultural reasons also why work from home may actually not be beneficial to people who are younger and who are entering the workforce. So there's actually quite a lot to be said. In terms of productivity and all that, I don't doubt that really for a second. I've always believed like less or more flexibility, less rigidity around some of these things in many cases is the best key to actually unlocking

things specifically in a white collar environment. And obviously all of that is going to be different when you're talking about people who work blue collar, who are like, what the hell are you guys even talking about? This is a completely luxury conversation. I always try to remember them too, because so many of them didn't have the luxury of working from home. They were going to work throughout the pandemic. They never stopped. They still had to deal with all the inconveniences

of the COVID restrictions and problems. And if anything, they're the ones who've been hit worst by this entire thing. Their wages have not kept up with inflation. They still have to commute. They don't have the luxury of being able to move to a town with nicer weather and all that. So you always got to keep them in mind when we're talking about this. Sure.

But that doesn't mean that, you know, what we should be aspiring to is bettering their situation, not making things shittier for the white collar workers, which is why, you know, the UAW I covered yesterday, their potential strike and their contract negotiations that are going on right now. One of the key demands there is better work-life balance, more paid time off. Obviously, that was a key demand of the railway workers. So, I mean, this obviously should be done at the federal level, but we should also be encouraging and supporting those efforts at workplace by workplace and union by union to achieve those same benefits. Because yeah, I mean, there's some jobs that you can't do from home. You have to be there. But we should also be doing our best to consider the happiness and work-life balance of people in all sectors of our society, in my humble opinion. No question. No question here. All right, Sagar, what are you looking at?

Yesterday, I did a monologue about how Western sanctions have failed to deter the Russian war effort in Ukraine, how their failure has revealed that the United States, and specifically the Biden administration, have really revealed the declining say of America in the affairs of the world. That's more of a meta point to which many people say, so what? How does that really affect me? Unfortunately for all of us, we're finding it out our hardest way whenever it comes to the price of gas. I'm sure I don't have to tell you this because you already know. The price of gas is beginning to go up. The current average price across the United States is $3.82, rising already up 30 cents from just last month. Gas remains stubbornly over $5 a gallon in California, and high prices are dominating the Western United States, Northeast, and also Florida. What's going on? It's actually directly related to a Biden failing foreign policy,

and also relates right back to Russia and to Ukraine. In the last month, Saudi Arabia has teamed up with Russia to deepen cuts to global oil production, despite warnings from the International Energy Agency that crude markets are likely to set and tighten significantly in the next few months. The preliminary cut by Saudi Arabia and by Russia was then followed up with a new statement just days ago by Riyadh that not only were the existing cuts staying, but that they would likely continue all through the summer to support higher oil prices and thus higher gas prices here in the US. Oil remains the number one driver of inflation here in the US for a number of reasons. First, it's a product you need regardless of price. More importantly, it is a higher price and it is reflected across the entire supply chain.

Anything from materials to food that needs to be transported is going to be impacted by the price of oil, and specifically, diesel. In just the last three months, wholesale diesel costs have jumped 46%, jet fuels up 40%, gas has rose 19%. This is going to massively impact Fed policy. If high gas prices remain throughout the next year or so, it will continue to encourage the Federal Reserve, pushing interest rates even higher, aimed at getting Americans to consume less. The sledgehammer to the economy could easily put us back even more of a recession when we're already in. It could even trigger a large collapse. The worst part is that we have literally no barrier to save the U.S. economy, should we even get to that point. At the very same time that Russia and Saudi Arabia are

voluntarily cutting oil, we are sitting bone dry with very little reserve. The U.S. Strategic Petroleum Reserve currently is at its lowest level since November of 1985. Why? Well, for several reasons. One is that Biden actually began tapping the Strategic Petroleum Reserve all throughout 2022. I actually largely supported that action,

even though I think it came far too late to actually have a meaningful effect on price. But the issue is that Biden expended so much of the SPR and had no plan to replenish it. Since then, the Energy Department has consistently said they have to delay the replenishment of the SPR because the market price of oil is too high. This, of course, is a bat signal to the market and others. Keep the price high as long as possible. Force Washington to put it, hey, whatever they want. It is also a major point of foreign leverage that international oil producers have over the U.S. Just last week, the administration announced it is again delaying the SPR replenishment, leaving reserves extraordinarily low.

As we head into a season of likely even higher prices, this is bad because if we head back up to five or $6 a gallon, there's not very much left in the tank, literally, to release and lower the overall price. Overall, it shows that our foreign policy is leaving us incredibly vulnerable here, both economically and politically,

at the hands of the Saudis and of the Russians. Already, international analysts are predicting that MBS and Putin are going to use the price of oil to try and hurt Biden's political chances before the Russians. Already, international analysts are predicting that MBS and Putin are going to use the price of oil to try and hurt Biden's political chances before the election. That is almost certainly true. And honestly, it is his own fault. There was a moment two years ago

when the price of gas was trending up, when some truly innovative policy action could have triggered more refining of oil, more domestic production. If you combine that with better foreign policy and coercion of Saudi Arabia, we would not be in this mess right now. Instead, Putin and MBS have now read their man. They know that Biden is not actually going to do anything to cut off Saudi Arabia or punish them. Just this year, we continue to ship them billions of dollars of weapons. They know that

they can be openly disrespected, and all that will really happen is a strongly worded statement from Biden. Putin, meanwhile, is openly showing that the so-called Western boycott of Russian oil, that he is confident enough that buyers, he can even cut production and increase the price on his Asian buyers with no repercussions at all. All of this could lead to a terrible scenario, really not that far away. Sky-high oil price, declining economic prospects, no way out. The entire reason the Strategic Petroleum Reserve exists is because the U.S. went through the horror of the oil embargo in the 1970s. The irony is we somehow are still dependent on, in many cases, the same nations for gas, with almost no innovation in our

oil infrastructure since then. The failure of imagination and the short-term thinking here of the Biden administration has left us incredibly vulnerable. Crystal, I'm curious what you make of all of this, specifically, you know, the SPR getting drawn down. And if you want to hear my reaction to Sager's monologue, become a premium subscriber today at BreakingPoints.com. Crystal, what are you taking a look at? Huge election today in the state of Ohio that could be potentially bellwether for 2024. Let's go ahead and put this up on the screen. The backstory here is also really interesting. This is from Boltz Magazine. They say in an attempt to fool voters, Ohio GOP sets up vote to weaken direct democracy. Let me

explain what's at stake. They say voters will decide today whether to adopt a proposal that would increase the threshold to change Ohio's constitution from 50 to 60 percent. That would make it harder for residents to get constitutional amendments on the ballot in the first place as well. So the idea here in terms of what's being voted on today is you can vote yes. And instead of being able to change the Ohio Constitution by 50 plus one, that threshold would go up to 60 plus one. But the back story here is part of what makes this sort of a ballot initiative that voters are going to have a choice to vote on that would add a reproductive rights constitutional amendment into the Ohio Constitution. Right now, the pro-choice side is winning that fight dramatically in terms of what the polls say. So Republicans, realizing they are unlikely to win at the ballot box in the fall on this abortion access constitutional amendment, they want to change the rules of an odd time and they've previously been against August elections, but let's put that aside. And so they are trying to make it so that it'll be a lot harder to get that abortion rights

amendment through. Thus far though, it doesn't look like the plan is working out too well for them. Let's put this up on the screen. So first you can see, this is the support per a USA Today poll for the abortion rights amendment. 58% of residents in Ohio, which at this point is quite a red state, are in favor of adding that amendment to guarantee access to reproductive services, whereas 32% are opposed. But on this ballot measure that is being voted on today, let's put this up on the screen, you also have a very lopsided result. Only 26 percent of Ohio voters support changing the threshold to 60 percent. Over 57 percent who say, no, we want to keep the direct

democracy that we have as it is. According to Bolts Magazine, this is part of a broader push among Republican parties across the country who realize at this point that when they have these pro-choice versus pro-life ballot amendments, that voters are overwhelmingly backing the more liberal pro-choice position. And so there's been a number of states where they've tried to change the rules of direct democracy to give their side a better chance. Bolt Magazine name checks Arkansas Republicans. They recently passed a law that makes it harder to qualify for ballot measures. Utah did the same. Arizona Republicans tried to do the same last fall. Republican legislators in Florida, Idaho, Missouri, North Dakota, and Oklahoma have made similar attempts. And now Ohio is trying to play the

same game. So that's what's actually on the ballot right now. Thus far, it looks like turnout for this kind of random August special election is absolutely through the roof. Put this up on the screen. Analysts looking at how many ballots have been cast early thus far say that they are at gubernatorial level of voting in this issue one referendum election, which is pretty wild. As of last Wednesday, more than 533,000 people had voted by mail or in person since early voting started. That's nearly double the final early voting figures for Ohio's two previous midterm primary elections, which included races for governor and for Congress. So, again, take that in. As of last Wednesday, they already had doubled the turnout for the two previous midterm primary elections.

So there's obviously huge interest in this. There's been a lot of money that has flooded into the state on both sides of this issue. And, you know, a lot of billionaire money coming in on the side of vote yes, which would undermine the direct democracy of Ohio citizens. And the last thing that I'll say here, and then I'll get Sagar's reaction, is 538 recently tracked how all of these special elections are going across the country. And it's actually quite interesting. Put this up on the screen. There has, in 2023, been a very lopsided result in favor of Democrats in these special elections. So even in districts that are overwhelmingly red, Democrats are narrowing the gap. But in districts that are

purple, they are winning. In districts that are blue, they're winning by blowout margins. This analysis by FiveThirtyEight found that in 38 special elections held so far this year, Democrats have outperformed the partisan lean of the areas where the races were held by an average of 10 percentage points. They say romping in parts of the country that typically support the party while cutting down on GOP margins in red cities and counties, too. So Democrats so far in the 38 special elections that have been held this year, outperforming by double digits. And I think, Sagar, it shows, you know, the impact of Dobbs and the overturning of Roe versus Wade has completely upended our politics. And it was not a flash in the pan. This continues to be a really determinative issue in terms of how voters are casting their ballots.

Oh, absolutely. I mean, look, it's- And if you want to hear my reaction to Crystal's monologue, become a premium subscriber today at breakingpoints.com. All right, guys, thank you so much for watching, bearing with us, and we'll have a full show for everybody on Thursday. We're excited for it. We'll see a full show for everybody on Thursday. We're excited for it. We'll see you then. I'm Michael Kassin, founder and CEO of 3C Ventures and your guide on good company.

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