Breaking Points with Krystal and Saagar - Counter Points #5: PayPal Policy, Senate Races, Elon Investigation, Special Master, Inflation Numbers & More!

Episode Date: October 14, 2022

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Good Friday morning and welcome to CounterPoints. I'm Ryan Grimm. I'm here with Emily Jashinsky. Good morning, Emily. Good morning, Ryan. All right, so we've got a quick update. Last week, we told people that we were thinking about adding some intro music, which is the thing that a lot of viewers have been asking for. They still want to get a little more hyped up than I get them at the beginning of the show. They need something to really get them. Your voice is very sort of lyrical. Lyrical is a nice way of putting it.

And so we were blown away by the amount of music that we were sent. So many of you are musicians yourselves, have written music. People sent us things they'd already composed and said, here, you can use these if you want. And you're really good, too. You guys are good. You guys are good. You sent really good stuff. Other people said they're going to work

on stuff and send it in. So we're going to have something fun. I also did follow up with Fish. Oh good, that's right. Yeah, he actually emailed Fish. I emailed Fish. Fish said that the problem with Tweezer and Tweezer Reprise is that Warner Music owns some of the rights and so that's difficult. But they own almost all of their live music rights. So if we want something live, that's still an option. It's doable. But I think so many people submitted music so that we don't do that. That's what it was. The influx was just...

Although there were plenty of people that were like, something like that could work. Plenty? Plenty. Define plenty. Lots. Lots. I got lots of positive feedback on that. I'm going to say that.

Good. Well, Fish Nation is strong. The Fish Nation, we're everywhere. And so at the beginning of every week here, there are just a couple of stories that we really want to dive into. And then by the time the show comes around, so much news has broken. We get a packed show. We have another packed show this week. A bunch of new news broke last night that we're going to get to later in the show. We're also going to talk about the hot inflation numbers that came out. Matt Stoller and Dave Dayen are both going to be here later in the show to

talk about that. What else are we going to talk about today? We've got so much on the docket. We're going to be talking about everything that happened with PayPal this week. We're talking about the midterms because there were a series of debates this week that went in some really interesting directions. And we have some soundbites from that that we're going to go over. The new Elon Musk news, it sounds like there's- Elon Musk maybe getting investigated. There's Elon Musk news every single day. But yes, that's the new information we have. There's also new information about Donald Trump's bid to appoint a special master in the Mar-a-Lago document case. And then both of us are going to

tackle, you're tackling Ukraine in yours and I'm tackling January 6th in my monologue. So we've got a really packed show. And like you said, we have editorial calls Thursday afternoons and all the news, of course, breaks after that. So we're just like trying to squeeze it all in here. And we can start right now with PayPal. Right. So let's start with a story that really, I think, is one of the first that is really breaking through the partisan molds that our politics have been stuck in. And this is Rohit Chopra, who I think is a fascinating and dynamic figure throughout the course of his career. He's now the head of the Consumer Financial Protection Bureau. And I think if you are a right winger, you should

not sleep on this guy on a number of fronts. He's not going to agree with you on everything. But take a listen to what he said on CNBC yesterday or this week and see if any of this resonates with you. I've never actually heard of a payment system thinking that they could fine someone for legal expression that their users are making. We have ordered all the big tech, most of the major big tech firms and payment companies to provide us with information about how are they making decisions about who they kick off their platforms. But we also need to look into whether they believe

they can be fining users for legal activity. So Tripper is responding to a PayPal notice that went out saying people would be fined $2,500 or just be taken from their PayPal account if they are posting messages that include misinformation that sort of broadly define misinformation. They then revoked the policy, said that it was issued in error. I think it's pretty startling that it was— So they should pay $2,500. They should pay $2,500 right out of the bank account. Do not pass go.

Do you think they bank with PayPal? No, but JP Morgan, whoever they bank with, should just take $2,500. Right, and so this is—what's interesting here is that you typically don't have the left. Right. One of the biggest concerns of conservatives in the Trump era was exactly that they would start to be getting depersoned. Right. As it's called, you know, they get debanked, they get de-internetted. You cannot have a presence. You cannot access the infrastructure of the 21st century that you need to live and bank and eat and exist and all of that stuff. This is interesting because it's the left expressing concern as it should. What's always been terrifying is the left saying, you know, kind of the ends justify the means,

right? That people are now so dangerous for having different opinions that then get classified as misinformation that yes, you know, we are taking you off of Google ad platforms, which is essentially so dangerous for having different opinions that then get classified as misinformation, that yes, we are taking you off of Google ad platforms, which is essentially a monopoly, or we are revoking your ability to sell this book that's critical of sort of trans ideology on Amazon, and we're just going to keep going down the list. Operation Chokepoint. Right, yeah. And you would have liberals who would defend that approach and they would say, well, look, this is a private company. They can do what they want. And if you don't want to have your $2,500 taken from you, then don't spread misinformation online. And agree with us, right? So publicly agree with us. Otherwise, we will classify what you say as misinformation. Right. And what's critical here is that Chopra, who has actual power, those are people on Twitter and Facebook, actually.

Well, the people who run Twitter and Facebook. And, but Chopra has real power as the head of the CFPB. And so his emphasis, I think, on the word legal and focusing on legal versus illegal, he's like, on what grounds does PayPal believe that it can come after a user for legal behavior that isn't even on their platform? And his clear answer is they cannot. And so he's pushing, he said, all of these different big tech platforms. And there's not just the principle here that I think that Chopra and others who are part of his kind of antitrust and kind of corporate skeptical ecosystem on the left. There's also an end goal here, which is to say, no, you don't make these decisions. The people make these decisions.

And the people make these decisions through their representatives. And representatives write the laws. So if there's a law written that is constitutional that you have violated, then there are consequences. Like, that's a criminal justice system. That's a system that is based in, you know, one person, one vote, representative democracy. We're not going to have a system where somebody has unchecked power, unchecked private power, and is just going to use it against somebody that they don't like. And I think good for Chopra for standing up for people whose politics he doesn't agree with. Right. And people who in many cases are actually disenfranchised, marginalized, extremely low income in situations that are, like, that's disproportionately people who are going to end up getting fined for misinformation and disinformation.

And it's not to say it's only going to affect, you know, the sort of poor rural Trump voter, but it is going to affect people like that way more than it's going to affect the people who generally CFPB officials are interacting with who happen to love Joe Biden or whomever else, whatever it is. And Operation Joke Point, I think, was really the first part of this, which is basically that we're looking into purchases. Or, for instance, banks not allowing you to buy firearms with their credit cards. This is where a lot of the fears started bubbling to the surface because it does generally violate the precedent that we have in this country that it's like, if you're a bank, if you are, you know, PayPal, if you are whatever it is, you have that line, right? You are, if people are doing things that are illegal, as a private company, it is not in your business interest and it is not sort of in

your ethical interest to prevent people from doing their legal, conducting legal activity based on partisan ideology or just ideology in general. That then cascaded into moves we saw from social media companies. And this is why when Jim Jordan says that Lena Kahn is a Marxist and Lena Kahn, you know, shouldn't be. FTC chair who's an ally of Rohit Chopra. Yes, the FTC chair Lena Kahn. Conservatives shouldn't be empowering Lena Kahn to break up tech companies through the FTC and shouldn't be giving her more sort of ammunition to take that on because she's a Marxist. It's like, allegedly, she's played, you know, footsie with Marxists, as some people might say, which is ridiculous.

She spoke to a student group. She spoke to a student group. That has some, like, well, most student groups nowadays have some socialist kind of... Yeah, she's on the left. I mean, there's no question about it. She's progressive, in the same way a retropa is a progressive. And it's an extremely positive sign. And I think that's why we're talking about this, that a progressive has an actual sort of old school ACLU approach to civil liberties. Right. And speech and open platforms have become coded as right, which is awful and is not headed in a good direction. So

it's good to see people who are on the left trying to pull that back. I'm curious, and they're going to then tussle with people on the left, some liberals who are going to say, no, no, no, free speech is just a stalking horse for white nationalism or whatever. So that's the problem that the left is going to have to sort out.

The right is going to have to compete with the kind of Reaganomics folks, like the right wing folks who are going to say, whoa, whoa, whoa, where is this heading? Now you're going people-powered government would say, yes, of course. Like everything is, all power derives from the consent of the governed. So yes, of course, if we don't like PayPal doing something like taking $2,500 from people, then we're going to tell them not to do that. Like that's what a democracy is. But on the right, so there is a libertarian strain over there that gets very nervous about this kind of thing. So how is that shaking out? Yeah, and they would say, in a free market, that's how we determine these things, right? So a democracy, that's how we determine these things. Build your own PayPal, and then you build it and they shut it down. Well, and this question shuts it down. And you're right to focus on Rahit Chopra talking about

whether this is legal, because I actually think that's an open question. Whether it's legal for PayPal to conduct its business in this way. Well, spreading misinformation is legal. Oh, I see what you're saying. What's his point? They're punishing a person for legal behavior. Legal behavior, right. You might find it unethical or immoral or wrong, but it's not illegal.

And there's a question of whether PayPal. According to PayPal, you stayed at the bar until 2. It was open until two, but that was too late. You should have been home earlier. We're taking $2,500. We're joking about that. But once you sort of give that power over and it goes into different directions and you have the awfully divided Trump era that we've been living in, the mind sort of boggles at the possibilities. Or you have people tracking periods and asking like, is this a miscarriage? Did you get an abortion? You stayed at the bar until 2 a.m. and then did X, Y, and Z. And the government, they buy the data from the company and use it in a trial against you, whatever it is.

Or it just, it snowballs. Dystopian. Stop it. Absolutely dystopian. And yeah, it's absolutely being sort of worked out on the right. But I think because the right was victimized by this before the sort of contemporary left was, the, I guess, old school free marketeers were really, I think, had a chilling experience. Put on their back foot, yeah. Yeah, and that's why you hear a lot of talk about common carrier framework, applying common carrier framework to actual common carriers like banks. Well, not so much banks, but like, you know, tech companies.

No, let's do banks. Nationalize the banks. And that's their problem. They're worried that it gets to that place. Yeah. And they're actually like building up conservative internet companies right now for fear of this. But when the left can sort of break that, it's really been hard for the left to weigh in because the risk has not been worth the reward of speaking out like Rohit Chopra did, because the risk is that you then get piled on and say you're emboldening white nationalism and white supremacy, whereas the reward would be what like some retweets from

conservatives and John Schweppe speaking of which at the American Principles Project we have this element A2, he's saying, you know, this is a big opportunity. Rohit Chopra sort of breaking this mold. Yeah, there you go. This is John Schrupp at the American Principles Project. He says, we have a major opportunity for bipartisan cooperation on protecting consumers from PayPal and other big tech payment processors. Common carriage with significant oversight seems to be the way to go. So let me just say that again.

Significant oversight. And that's coming from John, who does really good work over at the American Principles Project. And you do hear a lot of that from conservatives. And I do think it has busted through kind of the typical free market dogma consensus, at least in the conservative movement. Whether that translates into Republican policy is a different question, as is the question of whether it translates into democratic policy from regulators and lawmakers. Yeah. Done. Common carrier, strong regulation. Let's do it. It reminds me, I was on CNBC a couple of years ago, 2017, to talk about, scoop about Steve Bannon wanting to make Facebook and some others a utility. Right. And they started challenging me to defend it. I'm like, this is his idea, but okay, if you want me to defend it.

Let's do it. Here it is. The CNBC lady's like, I'm not even on Facebook. You don't have to be on Facebook. So why does it need to be a utility? I was like, look, I drank well water growing up. It doesn't mean we don't have a water utility. Get out of here.

And I don't drink water. I'll find that old video and share it. But anyway, we have the midterms are getting wild. That's right, they are. So we're going to turn now to a midterm update, and we're going to start with a surprisingly close race in the state of Utah. Now, who would have expected us to be talking about Utah at this point? But a year or so ago, Evan McMullin saw what he believed was an opportunity. He made his case kind of behind the scenes, but also publicly to whoever would listen that, hey, Democrats are not remotely competitive in Utah. If I can show that I am a viable challenger to Mike Lee, I think that Democrats will all

fizzle away and will then come over and back me. And then I will be close to having a shot against Mike Lee. I've read some demographic data that if you looked at Utah as any other state and stripped Mormonism out of it, which is impossible because it wouldn't exist really without it, but let's say that you could, that it would be either purple or blue, just based on urban, suburban, and rural demographics. If those urban, suburban, and rural voters voted like urban, suburban, and rural voters everywhere else in the country, it's a blue state because Salt Lake City and its suburbs make up such a huge portion. There's nothing outside of there. It's just desert once you get outside there. But because of the social conservatism

embedded in Mormonism, it has been a rock solid Republican state. But at the same time, because of the inflection of morality embedded in it, they were so uncomfortable with Trump. Like, it's much more so than evangelical movement, for instance. Yeah. And this is a huge focus of a really great book people should pick up, which is called Alienated America by Tim Carney, where he looked at actually not the general election results in 2016, but the primary election results on the Republican side in 2016 to analyze which communities supported Trump right away and which were still backing people like Ted Cruz and Marco Rubio. And Utah was a great case study because he

found places that have high social capital and high marks of civil society tended to reject Trump in the primary and places without it, you know, rural Wisconsin, they, rural Pennsylvania, Rust Belt towns, they embrace Trump right away. And so Mike Lee is then presiding over the state that has really high social capital and really high then aversion to Donald Trump. Right. So Trumpism like feeds off the carcass of Reaganism. Like it thrives in atomization and misery. Alienation, like alienation, actual alienation that has been induced by our economics and our culture. Right. And so because of the strength of the Mormon community in Utah, those community bonds have held together a level of kind of social contentment.

Yes. Without papering over the many abuses and all the other, you know, problems I would have with the church, what it does is it does create community. And in a place of community, it's very hard to pit people against each other and tear people down. It shields you from the ravages of economic hardship. And demagoguery is not going to play as well. Yeah. Well, because you're less, right, you feel less disenfranchised than you are less disenfranchised. So they were, but they're not going to be Democrats. So they were dragged kicking and screaming into this Trump coalition. And so McMullen, who ran a kind of

independent bid for president that a lot of people made fun of. Ridiculous. Got a lot of name recognition out of that and then parlayed that into this Senate race. Now, let's not get ahead of ourselves. He's still something, what was it, five or six, seven points behind in the 538 polling, but he's climbing. He does seem like he's moving. Some polls have it very close. And Mike Lee certainly is acting like it's close. Let's go ahead and play this Mike Lee clip on Tucker Carlson this week. Again, getting it away from the Democrats who were facilitating this massive spending spree and a massive inflationary binge. Please get on board. Help me win reelection. Help us do that. You can get your entire family to donate to me through Lee for Senate dot com.

I invite all of your viewers to do the same because this is a race that's getting closer and closer because Evan McMullin continues to raise millions of dollars from progressive Democratic donors nationwide who are hellbent on getting rid of me and replacing him with Evan McMullin. Yeah, so he's absolutely right. So Mike Lee won his prior races by huge margins. So he won in 2010 by about 30 percent. He won in 2016 by about 40% or about 40 points. And he's right because if you look at the way Evan McMullin is running, I don't know if you get his press releases. They're absolutely hilarious. This is a headline from one of them on October 11th. Republican member of the January 6th committee, Representative Adam Kinzinger endorses Evan McMullin for US Senate. That is not a way to win Republican votes in any other state. And I'm not sure that it actually really works in Utah. He's running as a former undercover CIA agent. That's something he constantly talks about. So this is clearly a campaign where he is

breaking in money from big money progressives and, well, progressives, in air quotes. And he is running really for that sort of like view, viewership, wine mom vote. Right. And Democrats love Kinzinger and Cheney and those folks. So you're also appealing to Democrats by citing your support from those particular Republicans. And the Democrats did not run a counter to Lee. They're backing McMullen. And that's smart in a state like Utah. His guess was right that Democrats would be like, why are we going to bother? Exactly. Like if somebody else is going to take an actual shot, why are we just going to put some

toady up here just to lose? Before we move to the Ohio Senate race, which is fascinating, what's your guess? Does he end up winning election night by five points? Well, yeah. I mean, looking at real clear politics, polls have him up five, three, five, six and five. Those are the most recent ones. And there's not great polling in this race. It looks like I went all the way back to May and June polls just enlisting off those five most recent ones on RCP. So it's hard to say because the polling, I think, in general, this cycle, I mean, pollsters are worried about how bad their numbers are. And so I would guess probably he, I don't think Michael is going to lose. Whether it's a terrifyingly close margin for him or a five point healthy margin is a different question. Now he has also said, and this is the key point, that he will not caucus with either

party. McMullen. Yeah. So if it's, if there are 50 Republicans. He's like Bernie. Right. No, Bernie caucuses. That's right, he does. Although when he was elected to the House, the Democratic caucus would not allow him in. Yeah. They said you can. Some Bernie history.

They said you can be in our caucus for committee purposes, but we will not let a socialist come to our actual meetings. That was their rule. So if there's 50 Republicans, 49 Democrats plus their independents like Bernie and Angus King, and then McMullin, if McMullin, it's not who he caucuses with, that's not what matters. It's who he votes for for majority leader. So if he votes for Schumer for majority leader, but doesn't caucus. So the fact that he said he wouldn't caucus with Democrats doesn't actually mean that he won't help Democrats control the chamber. I think that's what would happen. I think if his internals were higher, maybe we would hear that question being taken more seriously by Democrats. I don't know. I

would think if Utah Democrats had a good indication that he was going to beat Mike Lee, they would really want answers to that question. Right. Or maybe they have the answers. Maybe they do. Well, that's true. But if McMullen is just going to get in there and vote the exact same way that Mike Lee would, they don't have a lot of good reason to keep pushing so hard for him. So in Ohio, there's two people that would vote very different ways. Tim Ryan versus J.D. Vance is a race that I don't think anybody thought they'd be talking about October 14th or whatever day it is. It's closer than Georgia right now, according to the 538 polls. It's very hard to believe because for Tim Ryan to win, it would require everything pundits say they understand about the electorate polarization to be

wrong. It would also require a significant number of Republicans who are registered Republicans voted for Trump, vote Republican up and down the ticket to cast their ballot. For Tim Ryan, it would also require a ton of young people, women, and also men who very much support abortion rights and want to come out, who wouldn't have come out otherwise, or Republican women to switch sides. A lot has to go right for Tim Ryan, but the polls are showing that this is a real race. There was a debate this week, and let's go through several of these clips from last night. Here's the first one. Kill and confront the extremist movement of which J.D. Vance, unfortunately, is a part of, right? Who says that the president of the United States is intentionally trying to kill people with fentanyl? Who says that the election was stolen? J.D. Vance does. Who runs around with Ron DeSantis,

the governor of Florida, who wants to ban books? You're running around with Lindsey Graham, who wants a national abortion ban. You're running around with Marjorie Taylor Greene, who's the absolute looniest politician in America. This is a dangerous group, and we do need to confront it. And that's why I'm running to represent the exhausted majority, Democrats, Republicans, and independents against the extremists. So I've always expected this race to be tighter than people thought, just because Tim Ryan, I think, is generally underestimated. And the spread, the RCP average right now has Vance up by 0.8. I do think J.D. Vance is going to win. I do think he's run a really interesting campaign that shows the Republican Party

going in a direction that's probably a better one from where it was before. But to be up by 0.8% in that RCP average, again, I don't know that our polling right now is great. And even pollsters themselves are worried about it. They miss Ohio. Totally. And we're going to talk about Wisconsin too, which Ron Johnson was crushed by bad polls the last time he was up for election. And we saw how that turned out. So we also have another clip then of J.D. Vance's response to Tim Ryan and you can see... Actually, I think this is the first Tim Ryan abortion one. Oh, okay. So we'll play the next one here.

Said repeatedly on the record that I think that that girl should be able to get an abortion if she and her family so choose to do so. But let's talk about that case, because why was a 10-year-old girl raped in our community, raped in our state in the first place? The thing the media and Congress and Ryan, they talk about this all the time. The thing they never mentioned is that poor girl was raped by an illegal alien, somebody that should have never been in this state in the first place. You voted so many times against border wall funding, so many times for amnesty, Tim. If you had done your job, she would have never been raped in the first place. Do your job on border security.

Don't lecture me about opinions I don't actually have. It was a good performance in the debate from J.D. Vance. Yeah, and you were right. That was his response to the abortion ban argument from Tim Prine. I don't think that people are going to find that credible. Really? It's like, okay, let's say that this particular person never came to the country illegally and never raped this particular 10-year-old girl. That doesn't eliminate rape. Like, we're still going to have rape. We're still going to have incest. And so you're going to have

to have, you're going to have to design policies that take that into account. I mean, so he says at the end, you know, I think a 10-year-old who's raped should have access to abortion, but he's still part of, if he is elected, it will allow states like Ohio to go forward with bans that don't take those exceptions into account, whether it's Ohio or somewhere else. I don't know. I mean, I think she was able to from the reporting. She had to go to Indiana, right? Well, whether she actually had to go is a different question. There was this idea that doctors in Ohio were afraid at the moment to post-Roe to perform abortion. Right, which is what everybody predicted would happen. But the response from pretty much every Republican was, pretty much every Republican was,

the laws, like, let's design laws that don't cause this level of confusion. So, I don't know, I think that's an open question, but I would, if I had to predict, I would say Republicans, any laws Republicans passed would likely be designed to stop things like that from happening because they're more concerned about their politics anyway than they actually are about life. A lot of Republicans, not all of them, but a lot of them are more concerned about the politics of it anyway. And from J.D. Vance's response there, you can see the fact that he is very concerned about the politics and the optics of it and the way that it affects power weighs very heavily on them. And that's why a lot of Republicans in the GOP establishment didn't really ever want Roe to go anywhere despite all of their claims to be ready to overturn Roe,

et cetera, et cetera. I just think that saying the solution is to eliminate rape, it's like, that's great. We'd like that if that happened, but that's not going to happen. I mean, I do think one of the things Democrats miss in the conversation about the border is that they'll constantly point to statistics, which are true. In many cases, there are real studies that show illegal immigrants commit lower levels of crime than native-born Americans do, Our people who are here without documentation commit or illegally commit crimes at a lower rate than native-born Americans do. But the point remains that if somebody is in the country illegally, we don't want to add to already

bad crime problems. And one way to not add to already bad crime problems is to not let people into the country illegally. Yeah, no, I think that's an issue worth debating on its own. But I just don't think it's relevant to the abortion question, is my point. Your abortion policy has got to be what your abortion policy is, independent of crime rates, independent of immigration policy, independent of drug policy. Abortion policy is its own thing. I mean, he did answer that question based on policy, but I see what you're saying.

Right, and we'll see if that satisfies people. So, and next, let's roll the, I'm not even going to guess which clip it is. This is Ron Johnson. This is Ron Johnson. So Ron Johnson debated. I think we have one more. No, I think we're, so we have three here.

We got one more. Let's find out. Oh, we have one more right now? Okay, I was wrong. Okay, thank you. One to one. All right, one more, one more. And's find out. Oh, we have one more right, Vince? Okay, I was wrong. Okay, thank you. One to one. All right, one more, one more. And I think the problem is when you have guys like J.D. Vance who can't stand up to anybody,

like just a few weeks ago in Youngstown, on the stage, Donald Trump said to J.D. Vance, all you do is kiss my ass to get my support. He said that. That's bad because that means J.D. Vance is all you do is kiss my ass to get my support. He said that. That's bad because that means J.D. Vance is going to do whatever he wants. Mitch McConnell's given him $40 million. He's going to do what he wants. And Peter Thiel gave him $15 million. He's going to do what he wants.

And here's the thing that's most troubling about this lack of courage is that after Trump took J.D. Vance's dignity from him on the stage in Youngstown, J.D. Vance got back up on stage and said, start shaking his hand, take a picture, saying, hey, aren't we having a great time here tonight? I don't know anybody I grew up with. I don't know anybody I went to high school with that would allow somebody to take their dignity like that and then get back up on stage. We need leaders who have courage to take on their own party. And I've proven that. And he was called an ass kisser by the former president. Oh, that was a good one. He landed that blow. Although Trump really set him up for it. Does Trump want the guy to lose? J.D. Vance? Yeah. I don't think so. I think Mitch McConnell wants him to lose. I don't think Donald Trump

does. Trump just can't help the laugh lines? Like, what's Trump thinking there? He's not. I mean, he's just plainly not thinking. He's just not thinking, obviously. How can I be surprised at Trump this far in? But that's the thing, right? And I think to some extent, it's what people like about him is he's not like coming out and being strategic and calculated in the same way that like, why is Mitch McConnell in August bashing Republican Senate candidates? Well, because he's trying, that's part of a strategy. It's not just, you know, Mitch McConnell talking. Donald Trump often just gets out there and talks like he would talk to anyone. It's like anyone could be in front of him and he'll say basically what's on his mind. Right. Yeah. Usually it'd have to be a private recording of a politician to get something that honest. Now you can imagine a bunch of Trump voters hearing that

and be like, okay, then good. He's just going to be a completely mindless, loyal sycophant for Trump. He's got my vote because I'm with Trump. Trump knows that. Trump knows that. It is humiliating though, good Lord. That was really, that was humiliating.

That was well done on Tim Ryan's part. And it was Youngstown, which is where Tim Ryan is from. One Tim Ryan little stat, I did a story a couple years ago where I looked at the 100 poorest districts in the country and who represented each. And if you looked at something like the 40 poorest districts in the country that were majority white. There's only one, as I recall, that was represented by a white Democrat. That was Tim Ryan. Really interesting. And again, that's why Tim Ryan, I think, has been underestimated, because he's pretty fluent in the conversation that resonates. But his voting record is a real problem for him, in the same way that Vance took, as we were just talking about the abortion question, and moved it to the border and moved it to these issues where if you are a sort of 2022 Democrat, you are sort of out of touch then with those communities.

And what I like about him is in his authenticity is the yoga thing that he does. So he's all into this yoga and mindfulness stuff, which is good for him. But what that shows is that you're secure in your working class roots. Politicians who are not secure in their working class roots will go into a bar and just be deeply nervous about what they're going to order. There's this classic clip of Obama going into a bar in Pennsylvania being like, I don't want any of that fancy yungling.

Give me one of the local beers that y'all drink. It hurts. And they're like, well, we drink yingling. It's not fancy. It's actually pretty bad. But we drink it. And so you want somebody who's authentic enough to themselves that they will look at a menu wherever they are and order what they want.

And so Tim Ryan's like, you know what? I might get made fun of for this, but I'm into mindfulness, I'm into yoga, and I think you should be too because I think it'll make you feel better. And there are so many working class people who are into mindfulness and yoga. And the working class is not some monolithic

just like NASCAR beer belly guy. And a lot of NASCAR beer belly guys are into mindfulness. It's like people contain multitudes. What NASCAR races are you going to? Dover Downs. I grew up near Dover. They're into mindfulness? I mean, there are some.

You're going to find some. I actually don't disagree with that point at all. I do think, though, that it's where Tim Ryan's voting record, as he tries to sort of work his way up the chain in 2022 politics and tries to climb the political ladder, that's what makes it more difficult now. Can he overcome that? We'll see. Right. He has not genuinely changed where he stands on things like the border. And really, I mean, he might be talking that way, but he really hasn't. And that's a problem. So Wisconsin. We have one more clip. We're going really long on this segment,

but that's because there's so much news this week. There were debates and Wisconsin is one of the places that had a debate on Thursday night between Lieutenant Governor Mandela Barnes, who's the Democratic candidate, and incumbent Senator Ron Johnson, the Republican. Let's take a look at this clip. There was also an instance where Senator Johnson had to be sat down by the FBI and warned that he may be a Russian asset. We cannot trust Senator Johnson to protect democracy abroad because we

can't even trust Senator Johnson to protect democracy here at home. Mr. Johnson, you do have a chance on a rebuttal for that. And then we'll also, you do have a chance on a rebuttal for that. You do have a chance on a rebuttal. We'd also want to ask you that question about Ukraine. Well, first of all, I wish President Biden were more concerned about defending every inch of U.S. territory against the invasion on our southern border.

I certainly would want to get a full accounting of what we've already allocated, what the weapons we've sent to Ukraine, what we need to allocated, what the weapons have, what weapons we've sent to Ukraine, what we need to replenish in our own stockpile. I've been to Ukraine repeatedly. I've been the chairman and now ranking member of the European Subcommittee

on Foreign Relations. I was at President Zelensky's inauguration. The Ukrainian people want what we want. They want freedom. You have another 30 seconds. I'm sorry. You have still another 30 seconds. On the question of Ukraine. Okay. So the Ukrainian people want what we want. Want what we want. They're defending their children, their freedom. I think it is good for us freedom-loving peoples to hang together and provide them the defensive weaponry so they can

defend their territory. But again, I want a full accounting and in in response to the wild charge of uh lieutenant governor barnes the fbi set me up with a corrupt with a corrupt briefing and then leave that to smear me i am i'm sorry i'm sorry all. He is referring to corruption with the FBI, which I've been trying to uncover and expose. Okay, so Ron Johnson is 100% correct there, and the media's laughter speaks to, or the media's laughter, the audience's laughter speaks to an alternate universe the media has created, which is insane because in a healthy, functioning, democratic ecosystem, the media would have as much curiosity about the corruption of the most powerful law

enforcement agency in the country, which actually did set Ron Johnson up. They briefed him on, it's exactly what they did to Donald Trump with the dossier, where James Comey briefed Donald Trump with the dossier so that the FBI could leak to the media that Donald Trump had been briefed on the dossier and then inject that into the conversation. It's exactly what they did with Ron Johnson. And the laughter I thought was really interesting. It's not a winning campaign issue, I don't think, but it is clearly an example of how terrible the media coverage of the FBI has been. Yeah. I mean, I watched that and I enjoyed seeing Ron Johnson get laughed at, but then I was like, FBI actually did kind of set him up. They totally did.

So they come in and they brief and they say, hey, we just want to warn you that you're at risk of getting targeted by Russian disinformation and other agents and assets. And he's like, okay, cool. And it's like, of course, by the way. Thanks for the heads up. And then it's like, later in the media reports that he's been warned by the FBI that he's a stooge. So, yeah, if you're Ron Johnson, you're like, you kind of did set me up. And then they set him up double because then he has to say that the FBI set him up.

And he looks like an idiot when he says that. Yeah, say Eric Swalwell were a Republican and the FBI came to him and said, you're at risk. That girlfriend of yours is a Chinese spy. Right, you're at risk. And he actually did. Like, this is something that we actually have knowledge of. But let's say they came to him and said, you could be the subject of Chinese disinformation. And let's say he didn't do anything.

Let's say he noticed that when Fang Fang was courting him, it seemed like it could be a spy, because obviously. And he then is, if he's a Republican, the FBI leaks that to the media to make him look like he's in bed with China, even if he isn't, which in this case he was. But it's just a classic FBI move. And it did happen to Ron Johnson. And the fact that the audience is laughing to me was a really sad indictment on our media. Meanwhile, Ron Johnson did, and I don't want to let him off the hook completely here, did admit to participating in what is alleged to be a crime, which is the fake elector scheme. And he said this, I'm going to read this because he said this to a local reporter. I was like, he just said it. He said, my involvement in that attempt to deliver spanned the course of a couple seconds. I got, I think I fielded three texts and sent two, Johnson told the reporter.

I had virtually no involvement. Literally, my involvement lasted seconds. So he fielded three texts. The texts asked him, hey, can you get Mike Pence to put these fake electors, basically fake electors, before the House so that they will then not affirm Biden as president? He sent two texts. He sent texts to forget who, like the vice president's chief of staff, maybe Pence himself. Those details are out there. He was then told, no, we're not doing this crime. And so he's like,

so you can't blame me for this. So you text, hey, you want to do this crime? And they're like, no, let's not do this crime. You were still involved in that. So just the fact that it lasted what he says seconds, that's separate from this separate FBI thing that whether they're calling him a Russian asset or whatever. But I didn't want to let Ron Johnson's segment go by without acknowledging that. You do love that clip. Whereas I think what Ron Johnson is doing there is saying the media coverage of this is blowing it out of proportion. And I think it's true that the media coverage is blowing it out of proportion. I don't disagree with you that there's still something that shouldn't have happened. He worked with the conspirators to be the funnel to get to Mike Pence a scheme to illegally and illegitimately

undermine the lawfully elected electoral college people. He didn't actually. So that the actual president would not be nominated. I think that's like, it's hard to blow that out of proportion. I mean, it doesn't make him like a high level conspirator. It means he's someone who, as he said, and he admitted it, right? That he. Bag man.

He passed information along. Not great. I don't think it makes him like this-level part of the conspiracy in general. All that is to say, the midterm races. This is a race that had a poll come out this week that had Ron Johnson now up six. It was a poll that had him down, the Marquette University poll that had him down about a month ago. This race is a disaster for Democrats. Yes.

And Mandela Barnes, they obviously knew going in had a lot of sort of defund the police type leftist activist baggage, which we've talked about here before. He's now getting hit for a bunch of RT appearances, which is not great for liberals. Not great. I think they've kicked RT off all the platforms.

Speaking of Russian disinformation. Yeah. All right. A court filing that we got notice of on Thursday actually revealed, according to Twitter, that Elon Musk is being investigated in relation to his acquisition or his attempted acquisition of Twitter. Here's according to CNN Business. It is not clear which agencies may be carrying out the probe, and Twitter did not identify what specific actions by Musk U.S. officials may be investigating. Twitter's filing merely said authorities are looking into Musk's, quote, conduct linked to the deal. Now, we're going to also get into in this segment this news about Donald Trump. The Supreme Court has rejected

his plea for intervention in terms of the special master question. But Ryan, first, if we just narrowly focus on Musk here, what do you think could be the purpose of this investigation? What could they be looking into? Well, at a minimum level, we know that he made investments of the size that require disclosure and then did not disclose in a timely fashion. And the reason you have to make these disclosures is because investments of that size can move the stock. And if you know that you're making that investment, but nobody else does,

then you can just front run your own money and just ride it on the way up. So that appears to be something that the SEC could be looking at. That would be an SEC thing. SEC investigators are quite familiar with Elon Musk. They've monkeyed with him in the past. He got doinked for his 420 tweet. I think I'm going to sell it at 420 or something like that. And then it moved stock. He does stuff you can't do based around securities law. So there might be some securities law investigation. There could be questions about the seriousness of the original bid.

I think there ought to be what's called a CFIUS review, which I forget what that precisely stands for, but it's foreign influence. It's like basically if there's ever going to be a major investment by foreign either companies or people into some type of critical American infrastructure, there's a CFIUS investigation to make sure that this is not undermining American national security. And that if it is, that there are safeguards put up so that it doesn't happen. That would happen, say, if Oracle and TikTok are engaged in talks or if the UAE wants to buy an American port. There would have to be a CFIUS review. And if a lot of this financing is coming from China or elsewhere, it seems like it would warrant that kind of review. Yeah, and actually the way this entire deal has unfolded with so much negotiation actually happening on Twitter, because what you say publicly in a situation like this obviously is relevant to the deal at hand.

So with all of that happening in this particular situation, that means – I would be shocked if there wasn't federal probe, federal probes into the way all of this unfolded. So whether or not it's serious is a different question. But just whenever you're sort of hashing through these things so publicly, then of course there are going to be, I think, you know, people looking into it and different agencies. And so I'd be surprised if it was even just one. No, that could very well be. Yeah. And also, if you're an investigator, you're watching this unfold, you're jockeying for this one. This is a career maker. And yes, that's true. And I don't think Elon Musk is, obviously, Elon Musk is not stupid. I think this entire deal has been indicative of that sort of billionaire hubris, right? Like you have enough

money to make anything basically go away or happen or whatever it is. We'll see. I mean, this is kind of testing the theory of the case. I still think his whole play was to create a kind of public rationale for why he would be selling his Tesla stock in a way that would not tank Tesla stock in doing so, because he wanted to cash out at the peak before this thing crashed. Just, I think, yesterday, a number of analysts were saying, like, we're now short. We're recommending a short on Tesla. And so, if he could get out of his Tesla holdings, or a significant chunk, I think he sold $8 billion in his Tesla holdings, then that right there is worth whatever drama this is going through.

The timing was certainly interesting. Now, another high-profile investigation, there was news on that front yesterday in terms of the Supreme Court actually said no to Donald Trump asking for intervention with a special master. Here's from the case. The application of vacate the stay entered by the U.S. Court of Appeals for the 11th Circuit on September 21st, presented to Justice Thomas, and by him referred to the court, is denied. Ryan, what do you make of that? Legal analysts who looked at this appeal filing came away with the impression that this was a client who demanded that his lawyers appeal, and he didn't care why they appealed or on what grounds they appealed. do something. And you can imagine Trump, like, do something. Like, I actually paid you this time. So, file an appeal. Go right

to the Supreme Court. Or slow it down before the election. He's like, this is my Supreme Court. Like, go to my Supreme Court, because he loves my, my generals, my judges. My Kevin. My Kevin. Go to my judges. Go to my Amy and tell Amy that she promised that she would, you know, take care of me. I don't think that's what happened. Well, I mean, I think he thinks. He has that mentality. Yes. And so his lawyers are like, fine, we'll write an appeal. And I'm sure that his lawyers were completely expecting this to be rejected. You think so? Yeah. Yeah. And yeah, I think a part of it also is that this is all playing out. I mean, the raid was in August and it's August before a midterm election cycle. Keeps it in the news. But from the Trump perspective, I mean, anything that slows down, obstructs new what the media and Democrats would refer to as like blockbusters or smoking guns from coming out. And the timing of this very sensitive three-month period, I think makes sense.

And you've got a big conflict because Trump loves to be in the news, but the Republicans don't want Trump to be in the news. Democrats love it when Trump's in the news. Yeah. I looked at Trump's Truth Social feed yesterday, and he is not, like, at all running from any of this. He's completely—he was tweeting dozens of tweets. He's back in it, baby. He loves it. Yeah, I mean, I shouldn't say tweeting. He was truthing. Truthing. Tons and tons of links.

You know, links all that were flattering towards him and opposing the perspective of the Democrats in the media. But he's not—you know, he's not staying silent and laying low. Right. He's doing that thing, like somebody compliments the story I read, I retweet it. No, you retruth it. I retruth it, yeah.

I don't think you're on true social. I got to get on there, though. Yeah. I was on Parler. Were you? Yeah. Oh, I was on Parler. What did you think of it?

First day I got on there, I was like, let me see what people are up to. I went and checked out Mike Lee's feed. It's like December. He's doing election denial stuff. And I jump over to his Twitter feed, and he's just doing normal Senate stuff. Oh, really? It was different?

Just two completely different messages for two different platforms. Interesting. Very interesting. Well, Ryan, I keep trying to make points happen, like make a batch happen. What's your point? What point do you want to make today? What's your point? Yeah, what's your point? So President Biden said recently that the world today is closer to nuclear Armageddon than at any time since the Cuban Missile Crisis. Now, potential Armageddon sounds like a pretty big deal to me, and you'd think that it would

bring world leaders together to try to figure out what we can do to avoid this totally avoidable Armageddon. Except there's no evidence from the U.S. side that the Biden administration is taking this seriously behind off-the-cuff remarks at a fundraiser, which is where Biden made that Armageddon remark. And it doesn't take a foreign policy or a military expert to know that the best way to end the immediate risk of nuclear Armageddon is to end the war that has produced that risk. And this is where Biden is failing to take a leadership role. The obvious reality here is that Russia started this war and only Russia can end it. But that's led to some glib assessments of how it can be ended. Here's the Finnish prime minister, for instance, being asked to respond to Biden's comment.

President Biden said last night that Vladimir Putin may need an off-ramp to avoid a nuclear Armageddon. Off-ramp? What do you mean? From the conflict. The way out of the conflict. Way out of the conflict. The way out of the conflict is for Russia to leave Ukraine. That's the way out of the conflict. The way out of the conflict. The way out of the conflict is for Russia to leave Ukraine. That's the way out of the conflict. Thank you. Well, yes, of course, that would be very nice. It would also have been great if Putin had not invaded in the first place. Now, I hear a lot of commentaries arguing that really Putin had no choice but to invade Ukraine

because NATO pushed up against his borders. But it doesn't take much to be able to hold two thoughts at the same time. NATO deserves criticism for pushing closer to Russia than it said it would. And also, Putin is a grown-up who decided to invade on his own. The invasion was wrong and it's also been a catastrophe so far for Putin, for Russia, for Ukraine, and for everybody around the world suffering because of it. So it would be nice if he would just walk out. But that's not going to happen easily. Now, all along the Eastern Ukrainian front and now into the Southern front, Russian forces have been collapsing, though as mud season sets in, some of it has stabilized recently. That city, Izyum, that you see there was thought recently

to be firmly in Russian hands. Now it's not even close to the front lines anymore. And the reinforcements from the mass mobilization aren't going to do much to help. And this is tragic because people who wanted no part in this war, the same way most Ukrainians wanted no part in this war, are now dying for it. But here's a good example of how well this new force is operating. And for those of you listening on the podcast, what we're showing here is a Russian tank merging onto a road and then running over a landmine that even the drone above could see. Just a road just completely filled with landmines

that just cruise right over it and get blown up. Now, we can see where this war is headed. The question is where exactly the boundaries in the end will be drawn. And that's a question that's better answered at the negotiating table. Engaging in negotiations wouldn't mean Ukraine has to stop its counteroffensive. In fact, continuing the offensive while talks are going on and while the Russian army is collapsing would give Russian negotiators that much more reason to give major concessions. The counterargument is that no, Russia started this and the US and EU should fund Ukraine's military until they've driven every Russian soldier off of every inch of Ukraine,

maybe even including Crimea. Okay, fine. But is a few miles of border one way or the other really worth nuclear war? Biden knows how close we came to Armageddon during the Cuban Missile Crisis. And if he thinks we're there again, we have to take that seriously. The Russian foreign minister said this week that Russia is open to talks with the U.S. to end the war. And if we are serious about avoiding Armageddon, how can we refuse that? Sergey Lavrov's comments were reported by the Russian state news agency TASS, which said, quote, Russia never rejects a dialogue. Should an offer for a meeting between Putin and Joe Biden on the sidelines of G20 summit be filed, Moscow will review it. If

someone believes that a signal for such meeting has already been made, such belief is based solely on Biden's we'll see remark. This is obviously rather for journalists' speculations rather than for real politics, Lavrov noted. Meanwhile, the U.S. claim that they are completely open for talks with the Russian Federation, advocate political resolution of the current situation in Ukraine and around it, but it is the evil Russians who reject all proposals for contacts, Lavrov said, it is a lie, I can tell you right here. If Turkey is interested in organizing talks between Russia and the West, then it can raise the issue during the meeting between Putin and Erdogan in Astana. We have heard nothing besides public statements. Now about Vladimir

Zelensky, Lavrov said, quote, he will find a way to explain all this and preserve his face. He is a performer after all. There is a lot of performers on that side right now, unquote. He also said, if we talk about Nazis, then the German Nazism, Hitler, united most European states under his own banner in order to attack and destroy the Soviet Union. Now, approximately the same group of countries with some variations supports Zelensky. But Zelensky, of course, is no Hitler because he does not decide on actions against Russia.

He is ordered to do concrete things. Now, let's set aside for a moment that Hitler analogy, which has to be the laziest, most absurd one I've ever heard, perhaps. He's saying that because Europe was once occupied by Hitler, and now Europe is backing Ukraine, says that Zelensky is basically Hitler, except he's weak, like a puppet Hitler. But behind the insults and the bravado is a public claim of being willing to negotiate, which shouldn't be surprising given the turn the war has taken against Russia. In the interview, he even mentioned some things he wanted to negotiate, including the prevention of an arms race in space. Which, okay, fine. A space arms race treaty seems like a fine thing, so let's sit down and talk about it. If the fear is that Russia hasn't been punished enough for their invasion of Ukraine,

I think it's safe to set that aside. Russia is in a massively weaker position today than they were just before the invasion. Before the war, they had de facto control of Crimea and some parts of the Donbass. If they end the war severely weakened, but retain control of Crimea and some parts of Donbass, is that really an outcome that is so horrifying that we need to risk nuclear Armageddon to stave it off? And I think what's interesting here is this. Well, before the January 6th committee voted to subpoena Donald Trump yesterday, sources familiar with their plans, that's a quote, leaked them to NBC News, which reported, members want to put the move in the public record despite acknowledging how unlikely it'd be

for Trump to comply. So let's put that in the context of another headline from yesterday, this one in Bloomberg. Core U.S. inflation rises to 40-year high, securing big Fed hike. Labor Department data released yesterday showed the September core consumer price index increased 6.6% from last year, which puts it at the highest level in four decades. That's for the core consumer price index. Now, according to the BLS, the Bureau of Labor Statistics, increases in the shelter, food, and medical care indexes were the largest of many contributors to that spike. Now, consider another report from the last two weeks. This one was published by the Dallas Fed. Quote, despite the stronger wage growth due to the tightness of the labor market, a majority of workers are finding their wages falling even further behind inflation,

their analysis found. For workers who experienced a decline in their real wage in second quarter 2022, the median decline was 8.6%. There's also a land war in Europe careening to the brink of nuclear catastrophe, whatever you think of our policy. So all that is to say, Democrats believe it's worth their time and the public's time to extend the January 6th committee public hearings into the fall for the sake of what they admitted to NBC is basically a stunt because Donald Trump's not responding to that subpoena. Now, stunts can serve political purposes, sure, and that's exactly what Democrats want from this latest hearing. But that's not even good politics. After wrapping the highly produced summer hearings, Liz Cheney and the committee kept teasing that there would be more to come in the fall before

the midterm elections and before the committee expires at the end of the year. The goal was and is to keep every Republican candidate under the shadow of January 6th and Donald Trump ahead of election day. If you can keep it in the news, you can force candidates to talk about it, eating into time that would otherwise be spent talking about gas prices, inflation, the border, education, and declining wages. The Trump-centric strategy failed miserably in Virginia's gubernatorial election last year because voters have other concerns whether or not Democrats want them to. But Democrats did not learn because they continue to be blinded by their rage against Donald Trump and his voters. The most charitable

version of this January 6th strategy is that elected Republicans enable Trump so they should have to constantly answer for what happened on January 6th in order to prevent it from happening again. Thus, in this most charitable version of their logic, Democrats are morally obligated to do all they can to hold Republicans accountable for what they see as an incitement of violence. Again, I think Trump acted horribly before and after the 2020 election and did extreme damage to the country by spreading reckless nonsense about the results. I also covered January 6th in person and heard him tell everyone to go to the Capitol peacefully and saw the crowd get whipped into a frenzy as it marched down Constitution Avenue. So while Donald Trump contributed to the violence on January 6th, there is no question about that. I think it cheapens our collective definition of incitement to apply it to someone who also called for peaceful action. Now, despite their endless sanctimony, Democrats' fixation on January 6th is not virtuous. It is

about their power. It's an election strategy. It exploits a tragedy in a way that will almost certainly create others. These norm-breaking stunts are not worth getting Democrats back in power because Democrats will use their power in ways that create more Donald Trumps and more January 6th. They know their policies are going to worsen inflation and cut wages. They do not care. They think the public suffering is worth it for them to keep or gain power. In the process, of course, public trust plummets. Hillary Clinton and Karine Jean-Pierre and Stacey Abrams did immense damage to the country by casting

undue doubt on the legitimacy of earlier elections. Then the media did immense damage to the country by pretending Democrats did no damage to the country in the course of their election doubts. This is why the Obama-era FBI and Clinton campaign cooked up a hoax to disqualify Trump. The ends, they believe, justified the means. Trump needed to be stopped no matter how. This is not a partisan strategy, of course. It's actually kind of the inevitable nature of politics. We talked just last week on the show about how pro-life voters will elect men like Herschel Walker regardless of his personal character because they believe the end of outlawing abortion justifies the means of voting for a man of questionable character. But in a healthy democracy, the media would not be colluding with Democrats. They would not be

allowing them to pass off their cynical politics as virtuous governance. Our tech companies would hold both parties to equal standards, and Democrats then would have much less incentive to hold bizarre show trials produced for television that shatter congressional precedent because the media would hold them accountable for this ridiculous use of their time rather than cheerleading their efforts. Right now, every member of Congress should be scrambling to support workers and families busting their butts just to stay above water. They should be devising a sound approach to the nuclear threat. They shouldn't have time for much else, but they've somehow found plenty of it. And that tells you all you need to know about our government right now.

And it's how you get more great recessions and more January 6ths. Our ecosystem is totally out of whack, and our public and private sectors just keep throwing gasoline on the fire. We have a really interesting segment now when we're going to bring in Matt Stoller and David Dayen, who we're going to debate in a really, I think, substantive, deep, interesting way what's been happening with the Federal Reserve and inflation in the last several months. So we're excited to bring in Matt and David. This week, new, hotter than expected inflation data came out, which has produced expectations that the Federal Reserve is going to continue ratcheting up its interest rates. There's been a

kind of paradoxical response from the stock market in the last couple of days, the stock market shooting up rather than crashing, as some people expected that it might. So we're going to be joined now by Matt Stoller and Dave Dayen, two friends of the show, who we're going to talk about the relationship between the Federal Reserve, policymaking, employment, unemployment. And it was started here by a tweet of mine that got Matt mad, which then led to this segment. So the housing market will totally crash, but with interest rates like this, only cash buyers will be able to capitalize more upward distribution of wealth facilitated by the Fed. And this was in response to somebody posting a chart showing that the average 30-year fixed mortgage rate had climbed to 7.14%.

So Matt and other people pointed out, hey, you guys complain when monetary policy is too loose and fuels inequality. And you say that's creating an upward redistribution of wealth. And then when monetary policy is tight, you complain that it's shifting policy up and that, in fact, the increase in lending costs is actually going to hit a lot of rich people as well. And so we're going to unpack all of that. And I think this is an interesting conversation because all of us, including Emily, want higher wages, want a competitive and strong economy. The question is how to get that either given the tools that are practically available to us and also the tools that are legally and actually available, but political constraints

keep them from being discussed. So Matt, how would you describe kind of your thoughts about how folks like me think about, you know, federal interest rate policy, Fed interest rate policy? Right. So over the last, I guess, six to nine months, maybe a little bit, maybe about a year, the Fed has been tightening its monetary policy, which is to say it's been raising interest rates and shrinking its balance sheet. So taking money out of the banking system.

And the result is that the stock market has gone down significantly. It's gone about 30 percent or so. But another result is that housing prices are starting to go down. Rent increases are finally slowing. Crypto has crashed. Mergers are declining. And meanwhile, unemployment is still at 3.5 percent. And you see help wanted signs everywhere. So what's effectively happening is billionaires are losing a lot of money and Wall Street is losing a lot of power. It's not really touching ordinary people yet. We do have a serious problem with runaway inflation.

So what I don't, I mean, I think what I'm seeing here is that the Fed for the last 10 years has been pushing money into Wall Street. I mean, that's what the Fed does. You know, it doesn't, when they say, when people say it raises or lowers interest rates, like Ryan, when you talk about that, first of all, it does more than that. But it's not, there is no one interest rate. It's not like your credit card interest rates go down when the Fed cuts interest rates. The Fed is simply lowering and raising interest rates for Wall Street, right? For like Apollo, the giant private equity giant, for Goldman Sachs, and so on and so forth, but not for you. And this is deliberately put into statute. So it was in the

CARES Act in 2020, which was the response to the pandemic. And what that means is that when the Fed prints money, and the Fed has printed about $9 trillion or so over the last 10 years, which at a run rate, if you just take an even run rate of how much the Fed used to print, it's about 900 years of money. What that does is it fundamentally distorted the economy over the last 10 years or so, so that we have garbage things like crypto. We have the dramatic expansion of private equity. You have nonsense speculation like GameStop

and things like that. It's really reshaped our economy in incredibly dangerous ways. And the Fed is pulling back on that and starting to reverse that. And what we're seeing is the speculative hot air is coming out of the economy. A lot of the bad sectors that shouldn't

exist, like crypto, are falling apart. Private equity is having real trouble financing mergers, which they use for arson. You're seeing fewer stock buybacks. This is good. This is getting rid of the financialization of the economy. Now, there is a serious danger. There is a risk of unemployment because what the Fed has done is it effectively has the working person in a hostage situation saying the only way that we can affect the economy is to give money to Wall Street or take money from Wall Street. And if we take money from Wall Street, then working people are going to get hurt. But that's a fundamental hostage situation. We now have a situation where we have runaway inflation. The only way to address it is to actually start pulling money out of Wall Street. That's what the Fed has been doing. It's a good thing. The problem is, and this gets to your question, the way the left thinks about monetary

policy, they don't think about the distortions of the economy up there. They just think, oh, well, you know, if the Fed gives money to Wall Street, which is not the way that they think about it, but they say if the Fed lowers interest rates, which is a much more antiseptic way of saying the same thing, then that's good for housing. It's good for working people. It's good for wages. And it's really not. What it's good for is the people who are getting the money, and it's good for warping our economy in really problematic ways.

However, and this is to your point, if the Fed continues to pull money out of Wall Street, it will break the fragile financial arrangements that have been set up that are fundamentally toxic, but that are still what our economy relies on. It'll break those arrangements and that will cause serious bankruptcies, unemployment, things like that, that it will cause real suffering.

But that was sort of inevitable anyway. That's a result of the last 10 to 15 years of bad monetary policy and fiscal policy. So we are gonna have to pay for what has happened over the last 10 years. And I think we should pay now. What we are seeing as the Fed tightens monetary policy is a lot of the speculative hot air is coming out of the market. And that is fundamentally a good thing.

So that's my argument. What is Matt getting wrong from your perspective, David? Well, let me just say that I think Matt's brilliant, and I always learn a lot. I always learn a lot from him. You know, increase in interest rates was actually bringing down inflation, then then then maybe this would be something that was, you know, there would be a relationship where it would be positive. I see no evidence that the increase in interest rates is having much of an effect on inflation. Interest rates can't deal with the situation in Ukraine. Interest rates can't deal with continued waves of covid in China. We're still seeing very high interest rates right now. It's not due to wage increases. Real wages are down. But inflation continues to be very high despite this continued ratcheting up.

And as Matt says, it is going to have a cost eventually on the labor market. That is the explicit goal. That is what Jerome Powell has said he wants is a softening of the labor market and the ability. Essentially, he's not saying it in these words, but the ability to throw people out of work and to increase interest rate. Some people like Larry Summers are saying it explicitly that the unemployment rate needs to be 5% or more, which translates into millions of people losing their jobs. The idea that Matt has is that, well, we're going to have to pay the piper at some point, and this is taking money and power away from Wall Street. I question that to a certain extent. 2021 was a real outlier in terms of mergers and acquisitions.

Let's just focus on that. It was the highest levels that we have ever seen, pretty much. But according to a report from D.C. Advisory, deal activity, at least in the private equity space, is going to hit the levels of 2018 to 2020 this year, which were the three previous highest yearly activity levels on record. It's not going to hit 2021 levels, but it's not like it's coming back to some impoverished level. There's still about $3 trillion of what we call dry powder in the private equity markets, which is money that has not been deployed to buy companies. There's still plenty of room to run there.

And the private equity industry is pretty skilled in figuring out ways to get out of trouble even in an unfavorable environment for them. I would point you to this failing Citrix deal, which is a merger which is now going to cost banks a ton of money because they made the deal in a certain interest rate environment. Now interest rates have gone up and they're going to have to spend a lot more to make this deal. The way that deal was structured, the private equity companies that were creating this merger with Citrix invested no new cash into the deal. And there were these preferred shareholders who were other private equity firms who allegedly made investments, but they have the right to claim all proceeds for the sale of one

of the companies in the deal. Private equity is very skilled at figuring out ways to wriggle off the hook. And they're doing so with things like what are called continuation funds, which is they just sell companies to themselves so they don't have to realize the losses that they have on their various portfolio companies. So my point is that the idea that this is punishing Wall Street, I think, is a little bit dubious. I think there are ways in which Wall Street is relatively unaffected. And of course, when interest rates go up, banks do pretty well.

They get to increase the interest rate that they charge on consumer loans. What we do know is that while housing prices are falling a little bit, the cost of housing, at least for mortgages, you know, buying a mortgage has gone way up. I mean, mortgage rates are at 7% right now. So the monthly payment, which is what matters here, is going way up. And that's why we're seeing activity in housing markets at levels that we haven't seen since everybody was sitting in their homes at the very beginning of the pandemic. So this is not good necessarily for housing. And the other thing that it does is it makes home builders say, this is not a good time to build. This is not a good time to create housing. And of course, the reason that we have distorted and unaffordable housing markets

is there's simply not enough housing out there. And a situation like this creates less housing being built. This is the problem that we had directly after the financial crisis when we had a decade basically of flat home building. So I don't think that's a positive necessarily for individuals either, because over time, this is going to create this continued gap in the amount of housing we need, the amount of housing demand that there is. It argues for a need for social housing or some other way to get out of this cyclical rut that you get when you rely housing on the public market. So those are some of my points. And David, on that point, I'm curious for your response on this. You talked about a lot of kind

of other policy levers outside of monetary policy that could improve these situations. And I guess from my perspective, I agree. Definancializing the system is something that is necessary to be done. And if this accomplishes it without destroying the labor market, that's great. From my perspective, what I would have liked to see, and maybe we'll still get to see it, is what can a tight labor market do to our politics and to our political economy if it's allowed to persist for several years? In other words, if you have workers who are empowered and becoming militant in the workplace, which you're seeing now, what does that look like? How does that

change our politics? What do they start demanding? Do those workers then start demanding that the private equity be basically taxed out of existence? Because private equity absolutely benefits from this loose monetary policy, but they're also a regulatory creation of basically the Carter and Reagan era. They benefit either way, basically. Right. So just like they were created by policy, they could be uncreated by policy and also by marginal tax rates that make speculation in crypto and make all of the bubble financialization stuff that you're talking about that makes that impossible. Right now, there's no way we're getting marginal rates up there.

But what if a tight labor market persists, creates a labor movement, and then is able to fix that? What they start demanding is a Republican Congress. That's what they're demanding. Like what people want is to deal with inflation. That's just what people want. And I know it sounds callous that Larry Summers says, we need to get rid, you know, we need the labor, we need fewer jobs out there. And, but like, that's what people want. And like, we just sound like idiots pretending that inflation isn't this massive problem and that we don't want millions of people thrown out of work because it sounds mean. People are saying their main problem is inflation. And like, we just sound like morons by being like, oh, this is this is good for labor.

And like working people are saying, we don't like this situation. That's just the reality. What about what about the Fed is the Fed is not, you know, the Fed is not helping the inflation situation. Well, I mean, okay. First of all, I think there's a difference between raising interest rates and shrinking the balance sheet. So I want to talk a little bit about that because increasing the balance sheet, right,

was explicitly about the Fed going in and buying financial assets, particularly risky financial assets like the risky loans that private equity firms would need to finance their takeovers and other sort of stuff out there. And because they were kind of going out to the edges and sort of pushing and forcing investors to go down the yield curve and buy riskier stuff, it incentivized much, much, much more speculation. So we're not just talking about raising or lowering interest rates.

We're talking about financial operations where Federal Reserve traders would go in and buy specific assets. And I think that's really dangerous because it is actually having the fed sort of doing fiscal policy, which is the purview of democratic institutions. So I just wanna put that on, I wanna distinguish between those two things. The other point is the Citrix deal was negotiated in March

when we were still in this like crazy moment when all there was basically free capital. You would not see banks negotiating a Citrix deal or PE firms doing a Citrix deal today. So I just want to point that out. I think Elon Musk's purchase of Twitter is like a Citrix deal. He's trying to get out of it for that reason. He sought to buy it when the market was frothy and now he's trying to get out of it. And the banks are going to lose a lot of money on that debt too. But that's because they committed to it in March, April, May.

I forgot exactly when he said he was going to buy it. There's no way that that acquisition would be – he wouldn't put forward that acquisition today. I mean that's possible. I mean literally this morning, Kroger and Albertsons are combining. I mean, the idea that there's this trough of activity in M&A and in PE, I just don't think it's true. Look, there absolutely is. You said there is, that 2021, first of all, it was not an anomaly, right? It was a record, but it was a record because we passed a law in 2020 called the CARES Act, which said the Fed is going to buy risky assets. And this is my organization came out and said, you wrote about this.

And Elizabeth Warren talked about this. This is going to fuel a merger boom. And it indeed did that. And it did. And now the thing is about projections, right? When they say, oh, private equity is going to go back to 2019 numbers, which of course is too high. These are projections, right? And one of the things that's happened is that the projections have been consistently wrong and overestimated activity. Now, look, I think we can all agree that we would prefer to go back to a world where we

had a competent government that was managing markets in a much more deliberate way, that we could push money and actually build more housing, that we could get rid of this financialized economy without having to kind of crush the labor market. We could have, you know, we could organize things the way that we did in the depression in World War II and in the 1950s, where you just had a lot more analysis and understanding of our markets and we wouldn't have semiconductor shortages and all these different things. But that's not the world we live in. Like fundamentally, we've been making the argument, I say kind of collectively for the last 10, 15 years, that we need more government

competence and more deliberate management of markets. And we're starting to have some impacts, but we have not succeeded in building that infrastructure yet. All we have is the Fed. And that sucks, okay? It's a bad situation, but it is reality. That's all we got. And we got inflation now, and we all know that it takes a while for the Fed to – it takes a for like monetary policy to hit the economy. I would have preferred a lot of other stuff. I was talking about shortages in February of 2020. We didn't

do any of the things that we needed to do. So this is all we got, right? And inflation is a huge problem. Unemployment just isn't. We have got to be serious about where we are. And you also have to look at Wall Street, the stock market, the bond markets have collapsed. You cannot tell me that this has not had an impact on billionaires in Wall Street. The ability to finance deals is much lower. And yes, you can point to deals, important deals. We definitely need a revamp of antitrust policy. You guys know I care about that and want that. I mean, it's sort of in process. But the reality is this is all we got right now. This is the only lever we got. So we got bad choices on both sides. And I'm saying it is a better choice to say, let us stop the party on Wall Street. Let us stop the carnival. Let us stop amplifying asset prices,

which includes housing prices, and start to take them down. And that is what is happening. And it's causing a lot of pain. Obviously, 7% mortgage rates, it's terrible if you're trying to buy a house. But the reality is, the reason for that is housing prices skyrocketed because of Fed policy. And when you start to fix things, it's really painful. But the alternative would be housing prices continuing to go up at 10, 20 percent a year, which is not sustainable and is much worse. So we've got to be serious here about and look at the world from the perspective of the billionaires and not just say, oh, well, people are getting wages, wage increases here

and there when real wages are actually going down and have been for the last year or so. Last word to you, David, quickly. I mean, I agree that it's a bad situation. I'm glad you agree with me that it's a bad situation, what the Fed is doing. And it does take time to move through monetary policy through the economy. And that's why the labor market is still, you know, unemployment is still at three point five percent. But nobody believes that what the Fed is doing is is is going to leave the labor market unaffected. I mean, we already saw in the last job, the Joltz report. What's your alternative?, we saw that open positions fell by 1.1 million jobs in the last month. So we're heading in that direction. We are heading toward a recession. It is true that the loss of, say, five million jobs relative to 300 million people experiencing inflation, it's always going to be the case that more people look at that inflation

and say, I don't want this. But that doesn't mean that for those five million people who are going to experience a depression and for the millions of people who are going to experience a depression and for the millions of people who are going to experience a recession and have all of the attendant problems associated with that, that doesn't mean that there's this sort of John Stuart Mill greatest good for the greatest number situation going on. Well, David and Matt, there's a ton more to say on this and we want to have you guys back. We'll give you 30 seconds, but we're not going to get the show out on time. So we got to do this quickly. What's your alternative?

Like, should the Fed continue the speculative boom? Or what's the alternative here? I think the alternative is dealing with this in a more holistic way with, you know, using the power of Congress to deal with the real drivers of inflation. I don't I'm not convinced that the Fed is dealing with the real drivers of inflation just by crushing demand. There are supply side issues. There are corporate profits issues that you've written about. And I don't think that what the Fed is doing gets to that. And the Fed can't make it rain in California. So we'll talk more about this next week, week after. I want to have you guys back on to continue this conversation. I'll come in and talk about the gold standard. There you go. Excellent. Perfect.

So Matt Soller, American Economic Liberties Project. What's your sub stack? It's big. Big. And you're also a contributor here at the Breaking Points channel, Dave Dayen, editor at the American Prospect. Thank you guys so much for joining us. Programming note for next week. That's right. Oh, big programming note. We'll be here on Monday and Tuesday. Crystal and Sagar are going to be out. They'll be back after

that, and then we'll be back again on Friday. If you were very confused, our CounterPoints Friday airing on Wednesday was a unique thing for a holiday weekend but we'll be here Monday and Tuesday filling in for Crystal and Sagar we're excited we already have like half of Monday's show planned

stuff that got bumped from today good interesting stuff and it'll get bumped probably probably so pessimistic and reasonably so everybody have a great weekend see you soon we'll see you Monday Probably. You're so pessimistic. And reasonably so. All right.

Everybody have a great weekend. See you soon. We'll see you Monday.