Breaking Points with Krystal and Saagar - Mini Show #30: BlackRock, Nuclear Power, Corporate Profits, Media Influence, Twitter, Kamala, Corporate Mergers, & More!

Episode Date: April 9, 2022

Krystal and Saagar discuss BlackRock's climate profiteering, MSNBC shakeup, corporate profits, nuclear energy, Tucker's influence, NYT audience, Kamala's incoherent answers, Elon's Twitter play, and corporate mergers with Matt Stoller!To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/To listen to Breaking Points as a podcast, check them out on Apple and SpotifyApple: https://podcasts.apple.com/us/podcast/breaking-points-with-krystal-and-saagar/id1570045623 Spotify: https://open.spotify.com/show/4Kbsy61zJSzPxNZZ3PKbXl Merch: https://breaking-points.myshopify.com/The Lever: https://www.levernews.com/Matt Stoller Links: https://secure.everyaction.com/FNcO8Kqp_kGsVUT1sYEC1g2https://www.ftc.gov/news-events/news/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergershttps://mattstoller.substack.com/Meredith Angwin: https://meredithangwin.com/ Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

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go ahead and leave us a five-star rating on Apple Podcasts or wherever you get your podcasts. Really helps other people find the show. As always, special thank you to Supercast for powering our premium membership. If you want to find out more, go to crystalandsauger.com. All right, guys, time now for our weekly partnership segment with The Lever. Joining us for the first time this week, we have Adam Lowenstein. He has written a great piece for The Lever. He also writes Reframe Your Inbox, which is an email newsletter of essays and interviews about corporate power, capitalism, and politics. Definitely sounds like something

I would be into. Great to see you, Adam. Welcome. Good to see you, man. Thanks for having me. Yeah, absolutely. So let's go ahead and put up this piece that you wrote for The Lever, which I think is really interesting and very relevant about BlackRock. You say here, for BlackRock, the climate crisis is a win-win-win. No matter how or whether governments tackle climate change, the world's biggest asset manager has positioned itself to cash in. So just break down here for us your reporting. Absolutely. So let's start with the first win, which is the status quo. And we know right now BlackRock is investing a ton of money in oil, gas and coal and other dirty assets and industries and technologies by their own calculations. They're making money off some $260 billion worth of fossil fuel investments as of last summer. So that could have increased since then. But BlackRock is also making a ton of money off sustainable investments by their own calculations. They manage more than $500 billion worth of assets and investment products that have been deemed or marketed as sustainable and environmentally friendly. So

these are two big cash cows for BlackRock. And that's just the status quo. The second win, you know, if governments do decide to take more meaningful action on climate change, because of all of the rhetoric and all of the PR that BlackRock has done, you know, Larry Fink's annual letters are always a hot topic in the business world. And he makes these big sweeping claims about how BlackRock is going to be tackling climate change and that because governments have failed, businesses need to step in and step up, neglecting to mention, of course, that some of the reasons that governments have been unable to tackle global challenges like climate change is because of really effective business lobbying against solutions. But even having said that, if governments do take more meaningful action,

BlackRock has been so effective at positioning itself as a responsible and serious and good faith actor in the climate discussion that when the negotiating table is set up, BlackRock is probably going to have a seat at it. And what that means is that BlackRock might be advocating for solutions to climate change that benefit the company as well as society, but BlackRock is never going to sign off on any solution that is good for society, but bad for the company, which right off the bat limits the number of possible solutions to the small number that are good for companies like BlackRock. And then the third win is that because of all this talk in this PR and all this rhetoric about, you know, being a good faith actor and taking climate change

seriously and working together, BlackRock is already winning. No matter what governments do or don't do, the company has secured a reputation as this effective climate partner, which means that all of the money from sustainable and ESG investments, which are growing astronomically, a lot of that's going to keep flowing to BlackRock. So Adam, at the heart of this is ESG, which you mentioned. Explain that a little bit to the audience and why it's a scam. Sure. So ESG stands for environmental, social, and governance. And it's often you hear it in the context of ESG investing. Although ESG, you know, like a lot of acronyms has kind of just come to symbolize everything about

businesses taking meaningful action to save the world, basically. And you have seen by some estimates, there's $35 trillion of assets that are labeled ESG. You know, some estimates say that this could grow up to $50 trillion in the next few years. And basically what ESG investing says is that you can use your money and you can make money and you can also save the world at the same time. And a lot of times there's a few problems with it. Number one, there's no real standardization for what ESG means. And there's an announcement from the SEC a few weeks ago that they're going to start rolling out some proposed climate disclosure rules, which actually might start to standardize what some of these ESG labels

mean. But for the most part, what it means is that different asset managers and institutional investors like BlackRock can offer products that they claim are good for society, good for human rights, good for diversity and inclusion, good for the climate, and basically imply to investors, which could be individual investors, it could be pension funds, it could be other companies. Basically, what they're saying is that you put your money into these ESG funds, and you don't really need to do anything else because your money is going to make the world a better place. And that's a very seductive idea. It's very comforting. It would be nice if we could just let companies and capitalism solve, you know, the world's problems for us. But because there is this implied and sometimes very

explicit claim that ESG investments will also be better for the bottom line than traditional investments, then once again, similar to BlackRock saying, we're going to be at the table and so we're going to rule out all the solutions that aren't good for our business. If you have an ESG product that maybe is good for society, but isn't making as much money as a traditional mutual fund, which could be invested in all sorts of companies like Exxon and Chevron and, you know, all, you know, Facebook and all of these companies that, you know, you could make a pretty compelling argument are not good for society. If these ESG funds don't make as much money as the other ones, then they're just

not going to gain traction. And so on top of that, you have a lot of ESG funds that are just labeled environmental or sustainable or green, and they're full of stocks like Exxon and Chevron oil and gas companies. And we've seen this a lot over the last six weeks or so following Russia's invasion of Ukraine. You have a lot of ESG funds that hold shares in Russian companies, including Russian oil and gas. Based on what we know BlackRock's holdings, what are some of the climate solutions that they might find acceptable? Like, okay, we're going to make money off of that one. And what do you think are some of the things they would push out of the bounds of conversation? Yeah. So in the piece, I talk about this speech that Larry Fink gave at Larry Fink,

the CEO of BlackRock, gave at the G20 last summer in Italy. And he outlined a few of the solutions that he wants to see. One of those is that he wants to see more scrutiny for state-run and privately held companies. There's a lot of scrutiny for publicly traded companies about what they're doing on the environment or what they're not doing, what they're doing on human rights or what they're not doing. And Larry Fink wants to see more scrutiny for privately held companies and for state-run companies, which is legit. There are a lot of public companies that are offloading dirty assets to private companies. They're just selling them or to state-run companies. And that doesn't, as Larry Fink himself has said, that doesn't actually make the world any greener or more

sustainable. It just shifts who holds those assets to less heavily scrutinized entities. But it's also a very convenient argument for BlackRock because if you have less scrutiny on public companies like BlackRock and more scrutiny on other firms, well, that means less scrutiny for BlackRock. It's right there in the statement. But what it also hides is the fact that BlackRock itself, while calling for more scrutiny for privately held and state-run companies, BlackRock is continuing to partner with and invest in privately held and state-run companies. They just announced a big investment coalition with a bunch of investors who invested in a $15 billion pipeline project

with Saudi Aramco, obviously a massive company and a state-run company out of Saudi Arabia. BlackRock, I mentioned a couple of places in the piece. BlackRock is investing in pipelines in Texas with privately held energy and infrastructure companies. So that's one argument that they make, where there's some truth to it, but it's also a very convenient argument for the company. Another solution that BlackRock would like to see is governments investing trillions and trillions of dollars in lowering what Larry Fink calls the green premium. The fact that a lot of green industries and technologies and products are more expensive than traditional ones, non-green ones. And again, there's a kernel of truth to

that. There is definitely a role to play for governments to help spark the initial upfront investment. There's a lot of private capital is not necessarily going to move into these spaces without governments bearing some of the upfront risk. But once again, this is a very, very convenient argument for BlackRock to make because, as Larry Fink has said, you know, there's a long-term investment possibility of $50 trillion worth of green investments. And that's a pretty lucrative pot of money for the world's biggest long-term investor, BlackRock, to be eyeing. Right. So. Yes. So we see how these all roads lead to good for BlackRock. And since they get to have such a critical voice in shaping what even the solutions might look like,

that very much constrains the possibilities of how governments act. I think it's a really important piece. I really urge people to take a look at it. It's great to talk with you this morning, Adam. Great to meet you. Thank you, Adam. Thanks so much for having me. I appreciate it. Yeah, our pleasure. We've been talking a lot about nuclear energy here on the program since the Russian invasion of Ukraine. So we thought we'd bring in an expert, Meredith Engwin. She's the author of Shorting the Grid, The Hidden Fragility of Our Electric Grid, and an all-around very interesting person. Meredith, thank you so much for joining us. We really appreciate it. I'm very happy to be here. Thank you.

Absolutely. Meredith, you know, I've been very intrigued on nuclear power. I've been trying to read as much as I could, and almost everybody I respect told me to talk to you. And so that's what we're doing here. I thought we would do it in the context of the New York closure of the Indian Point nuclear power plant. Let's put this up there on the screen. This is from Eric Levitz. He's actually a progressive writer. What he talks about there is that environmentalist groups pressured the Cuomo government to close this nuclear power plant, Meredith. And now the city of New York and New York State is much more reliant on natural gas and on fossil fuels, which is also causing price spikes for consumers in the city of New York. What does this tell you about the broader environmental movement and maybe some

misconceptions about nuclear power? Well, it's something that I've been sad about for a while because, you know, I hear environmentalists saying this and saying that. And then when I say, well, you know, nuclear plants are very helpful about not putting out CO2. They have a very small footprint. I've worked around them for years. They're very safe. And they say, no, no, no, no, not nuclear. Anything but nuclear.

And I'm like, wait a minute. Anything but nuclear, global warming, but not nuclear? And that seems to be, it has made me sad many times. I fought very hard to keep the Vermont Yankee plant going. I led demonstrations and letter campaigns and so forth. And sure enough, when the Vermont Yanique Plant closed, we had a spike in emissions because no matter what people say, it gets substituted by fossil fuels. Of course, you have a different situation here where you're hoping to have it substituted by a hydropower from Quebec. But if it's substituted by something in the neighborhood, it's going to be fossil fuels. Can you speak to some of those concerns?

Because I think there are a lot of well-meaning people who, you know, want to be part of a solution to the climate crisis, but who are very worried about, you know, incidents like Chernobyl have been sort of like seared into their brain. And in fact, what's going on in Ukraine right now is reminding people of some of those fears they have about the dangers of nuclear power. Could you just speak to those concerns? Chernobyl was a power plant built in the Soviet era. It was built for dual purposes. It was built to make weapon-grade plutonium, and it was built to make power. And it was run by people who did not have the kind of safety culture that plants in the West have. And so Chernobyl was a big problem. I mean, it's actually the only power plant, nuclear plant, commercial one, that ever killed anybody.

I mean, people say, oh, Three Mile Island. Well, there was a release of some radiation which quickly dissipated, which gave people in the area less than an x-ray's worth. Anyway, I guess what I'm trying to say is that the Western plants are very, very well designed. Chernobyl didn't even have a containment structure around it. It was very Soviet. Right. Absolutely.

Meredith, in the context of where we're at right now, some of the things that you have talked about, and I did not even know, was that many people in the natural gas industry actually have secret campaigns in order to push wind and solar power, specifically because of their low amount of capacity, which then makes it so that natural gas-powered plants are then needed in order to back them up and for reliability of the full grid. Why is nuclear a superior solution in wanting to actually move away from fossil fuels? Well, you see, when you say, okay, we're going to build a wind turbine here, well, the wind turbine has a 20 to 30% capacity factor. Maybe if it's offshore,

it has a 40% capacity factor. That means that it can make power 40% of the time if it's offshore, it has a 40% capacity factor. That means that it can make power 40% of the time if it's offshore, 30% if it's onshore. So what about the rest of the time? And of course, the wind turbine makes power when the wind blows, as opposed to when a operator in the control room says, the grid needs power, gets them going over their wind turbine. Nobody can turn the wind on. So that doesn't happen. So what happens is that every wind turbine needs what's called a fast-acting resource to back it up. And the fast-acting resource, which is readily available,

is natural gas. Now, if you're in an area with a lot of hydropower, hydropower can be fast-acting too. But mainly, you don't get to build a lot of hydropower quickly, while a natural gas plant can be built within a year or two. So guess what? You get more natural gas on the grid. Nuclear, on the other hand, will run all the 100% of the time. And so you won't need to back it up with a natural gas on the grid. Nuclear, on the other hand, will run all the 100% of the time. And so you won't need to back it up with a natural gas plant. Obviously, any solution to the climate

crisis is going to have to be global. And with that in mind, are there concerns about allowing peaceful development of nuclear energy around the globe, leading potentially to the proliferation of nuclear weapons? Of course, people are concerned with that. In general, countries that want nuclear power plants really want the power. That's what they want. And to dual use the nuclear power plants for uh weapons development is it's pretty close to impossible i mean it's not strictly impossible but it's pretty close and so most most countries that set up a nuclear system they buy the fuel and then when the fuel is spent they ship it

somewhere they're not involved in processing the fuel and of course when the fuel is spent, they ship it somewhere. They're not involved in processing the fuel. And of course, that means they aren't involved in trying to make a weapon with the fuel. Not that they could, but what I'm saying is that they're not. They're just running the power plant. That's what they want. And let's look at an example, okay? North Korea, South Korea. South Korea has a lot of nuclear power plants and no nuclear weapons. North Korea, unfortunately, has a lot of nuclear weapons and doesn't care much about its people. So it doesn't have a steady grid and it doesn't have nuclear power plants. Meredith, what about cost? Some of the things that I've seen in terms of the critics of nuclear power who will at least acknowledge it as a CO2 solution are saying it's outrageously and too expensive.

Vis-a-vis solar and wind and nuclear, why is nuclear a superior solution? Nuclear is a superior solution because we control it, because we build it, we can turn it on, we can turn it off. Solar panels, a nuclear plant can last 40 years, maybe 60 years. They're getting license extensions to 60 years. It has to have a big inspection and a lot of work done on it at 40 years. But what I'm saying is it lasts a long time. Wind turbines, people are claiming they're lasting 25 years, but I don't know. So if you begin looking at the wind turbine only makes power 30% of the time and only lasts 25 years,

and you begin putting that into the mix, then the nuclear doesn't look so expensive. That said, for a long time, the West wasn't building nuclear. And because the West wasn't building nuclear, we lost the knacks for it. We lost the supply chains, the skilled workers, and so forth. And so all of a sudden we're building nuclear and from the point of view of the planning and the building, it's like a first of a kind. Even if we built a whole

bunch of nuclear in the 80s, it's first of a kind when we're building it in 2000. Because they're not the same workers. Anyway, I guess that causes overruns for sure. I wouldn't deny that. The nuclear was built in the 2000s in the West were much more expensive than the nuclear was built in earlier eras when we were building a lot of them. Got it. And what about nuclear waste? Because that's another concern that I've heard from people about nuclear power is that we still don't have a strategy or a way to really deal with or dispose of nuclear waste. I'm afraid I comment this from the point of view of a chemist. I've worked with a lot of dangerous stuff in my time and so the idea that nuclear waste is

somehow extraordinarily dangerous i i mean i i acknowledge that people are fearful i do not mean to downgrade that but coming at it from a chemist like uh are you kidding i mean look at it look at it this way nuclear waste what they call nuclear waste, is spent nuclear fuel. It is a ceramic. It is put into a cask, which of it. And I can give it to you as a liquid. I can give it to you as a gas. I can give it to you as a saw, a slurry, or I can give it to you as ceramic. What do you want? You want the ceramic, of course. And there's all kinds of processes making all kinds of stuff.

Anyway, I guess my feeling is it is just not a huge problem. One other thing is compared to the amount of power that a nuclear plant puts out, the amount of waste is very small. Let me give you a personal kind of example of that. Our local nuclear plant, Vermont Yankee, refueled every 18 months. The fuel was delivered in a single or sometimes two semis. And that fuel would become eventually nuclear waste. One or two semis would. Meanwhile, we had a coal plant, Merrimack Station, which I also visited with the group.

I led a group to visit different kinds of plants. And it made less power than Vermont EIT, and it needed 40 coal cars of coal each day to make that power. And of course, the ash from that coal was about 10% of it. So that's four coal cars of ash a day. I mean, what I'm trying to say is the amount of waste in nuclear is so small. And I mean, coal ash has been such a problem area. I mean, you know, they put it in ponds and keep it wet. And sometimes they're able to recycle it.

Good, good, good if they can do that. But meanwhile, you understand that it contains zinc, it contains cadmium, it contains lead, it contains uranium. I mean, it contains everything that came along with the coal. And so I guess the thing is that I'm not, I understand that people are fearful of it because they're not used to the idea of something like uranium. They're just like, we don't use uranium. I use acids and bases and stuff and cooking vinegar. I mean, I use pretty heavy duty cleaning solutions on occasion. But at home, I don't use uranium, so I have no experience with it. That makes sense, Meredith. Look, it's been very, very helpful. I encourage people to go and to read your book

and to consume some more of the podcasts and others that you've put out there. And we really appreciate you joining us and helping educate us in the audience. So thanks very much for joining us. Thank you so much, Meredith. It's great to meet you. Thank you.

Our pleasure. Thank you, Meredith. Some interesting news by Puck News, a new outlet which has a lot of ears in the entertainment industry. They have possibly found Rachel Maddow's replacement crystal, and it is Alex Wagner. So here's what they say. Again, this is a possibility. It's not 100%. They say, quote, looks like Alex Wagner is now the internal frontrunner to score the Rachel Maddow 9 p.m. slot. Caveat is far from final. Wagner used to

have a noontime show at the network, returned right around the time that Maddow announced she's scaling back. Wagner is currently on Showtime's The Circus. We all know that that's a personal hit show. Now, what's interesting about this is that we both have had personal experiences with Wagner. You know her much better than I do. So I'm curious first for your thoughts. So it's interesting because she was actually fired from MSNBC the same time I was. But she didn't piss them off on the way out. No. And so she gots a job. Yeah. So I think she's a very well-connected person, has always been my impression. Her show previously at MSNBC, it was like a noontime show and she'd have on all these like sort of insider Washington types on the panel.

They like doing it because you would be on the panel the whole show so they would get their face on TV more. And so she kind of was going for a vibe of like morning joe at noon yes um so she uh gets fired about the same time i did because you have a new president come in who's like we're just doing straight news now and so that then that didn't really work um and they went back and leaned into like more partisan liberal programming um listen i think it's gonna be be very hard to fill Rachel Maddow's shoes. She's obviously not my ideological cup of tea, but she's one of the few cable news hosts who has an audience that actually shows up for her. When she was out on, like, doing whatever she was doing, vacation or working on another project or whatever, her ratings dropped off.

I can't remember if it was a fourth or a third. I think it was one third. Dramatic, massive decline in audience like that the minute it wasn't Rachel there at 9 p.m. Alex Wagner is well known in D.C. political circles. Yes, that's right. Does she have a large established brand and audience? No. Not at all. Right. I mean, she has, I think, very low name recognition and hasn't even been hosting a show at MSNBC for a long time for people to have, like, for the MSNBC audience to really know what she is. In terms of her ideology, she's just kind of like totally standard issue.

I can't think of a particular, like, cause or anything that, or anything that she's really put her sort of imprimatur on. So if this is the direction they go in, which I would buy because they hired her at about the same time that Rachel Maddow decided to scale back her presence, I think it's going to be tough. But on the other hand, I can't see that there's anyone else in the stable that would really be a better fit. So I'm perusing her Twitter feed. The last couple of things that she's reported on or tweeted about are January 6th. Okay. That fits.

And then she did a story. MSNBC speaks to New York Times photography fellow about her instantly iconic photo of a 17-year-old Layla Jackson admiring her mother, Judge Katanji Brown Jackson, during her Supreme Court confirmation hearing. She's doing a whole story about a photographer who took a photo of a teenager while her mom was getting confirmed. It was a beautiful photo. Yeah, sure, okay. Great story. I don't know. Here's what I'll say with Wagner. I had a very unpleasant interaction with her. Here's why. When I was in the White House press corps,

obviously I was a nobody at the time, where I did not even have a seat, which means that I had to line up in the aisle. And because I wanted to get a question, you have to get there really early. So I knew the briefing was happening. It would take like two hours. So I would get there two and a half hours before and I would just sit there and it sucked.

It was terrible. But that's what you had to do if you didn't have a seat. Well, Showtime's The Circus decided that they were gonna film part of the briefing or whatever, even though they obviously weren't gonna get called on because barely anybody knew who they were. And so she comes and tries to stand in front of me. And I was like, hey, that's not how it works.

It's first come, first serve. And there was some version of, do you know who I am? And I have this TV show to happen. And I was like, I don't care. That's not how it works. You can stand behind me if you want. And then all this negotiation around where her cameraman could stand. Also, they could have a little bit of B-roll of her raising her hand during a question.

There's a little bit of insight into how some of these people think and how they act whenever they're on the job for their very important Showtime show, The Circus, which I'm sure a lot of people watch. And it's definitely not a vanity project propped up by CBS and Showtime Network. So just a bit of an insight into who this person is. I don't think it's going to work for all variety of business reasons. And it's not because I have anything ideological or personal against her. It's more that for all the reasons that you just laid out, very unlikely to succeed. Yeah. I mean, they don't really have anyone that has a particular brand or following that they can plug into that spot. So I think it's going to be very tough to fill those shoes.

I'm just looking because I'm like, well, listen, maybe I'm just not plugged into the circles where she has a big fan base. But I'm looking at her Twitter following and engagement. I mean, she's very low engagement on any of the things she's putting out here. I do see that they recently had her fill in at the 10 p.m. slot, Lawrence O'Donnell, which again would sort of indicate that, you know, she's they're trying her out and seeing does she hold an audience? How does she conduct herself? All that stuff. So not set in stone, but very interesting little conjecture here. We'll see. Well, guys, we have some wonderful news for you. If you happen to be a corporate CEO or large shareholder in one of America's great monopolistic enterprises.

Let's go ahead and put this tear sheet up on the screen from Axios. Corporate profits hit a new record high in 2021. And you know what is so funny about this, Sagar, is that these companies loudly complained about how they were being squeezed by the high prices and they really regretted it, but they were just going to have to pass them the costs on to consumer. Oh, really? Well, the American consumer was getting screwed and squeezed. These people were raking in more money than literally ever before. So for the full year, 2021, pre-tax profits rose 25%. Meanwhile, consumer prices rose 7%. So that shows you that the price increase,

the raw materials that they were so complaining about that they were using to justify their escalation in prices, they were raking it in way above what inflation was necessitating. But as if that's not enough, I got some more details for you here. Let's put CBS up on the screen. So non-financial companies are the ones that were counted in this metric. They say in every quarter of 2021, the overall profit margin remained above 13%. That is an altitude hit in only one other quarter during the last seven decades. Seven decades. Every single quarter, they outperformed what they had ever done in the last seven decades. And by the way, they put some numbers on what I

was saying earlier about inflation. They say food companies in particular blame pandemic disruptions, inflation, and strong consumer demand for higher prices, with pork and beef up 14% and 20% respectively versus a year ago. Those prices in turn have often fueled a jump in earnings. Tyson's Foods, the nation's biggest meat processor, posted more than a billion dollars in profit in the first quarter of 2022, up 48% from the year earlier period. So they're crying about costs and disruptions and all of this. Meanwhile, posted more than a billion in profit, up 48% from last year. I think what's crazy is when they just put the sheer percentage there, Crystal. I can't help but just reiterate it, which is that pre-tax profits are up 25%, outpacing 7% rise in consumer

price. So that means there's 18% to be made up here of what the actual profit is being reaped. And let's put this up there on the screen in terms of how exactly CEOs are then compensating. Oh, heading for a record as the pandemic recedes. So all of the hallmarks of a scam are being run on the American people. We're being told that it's one thing, inflation. Nobody is downplaying the effect of inflation exactly on how it affects normal people's lives. The companies then are using it as an excuse in order to jack up the price as high as they possibly can in order to get away with it, and then they blame it all on inflation. Then as you get upset and we blame the politicians, rightfully in some cases, and we look at that, they reap record profit and pay themselves

extra high salaries. What do you call that? It's a scam. It's a complete scam. It's a lie. It's a fraud. And we've caught them, we've reported before on how some of their earnings calls, they'll actually admit. Oh, yeah, they just say it. They're like, yeah, we raised the price, and consumers have a high sensitivity to price increase right now, and that's contributing to record profits. Like, whoa, whoa, whoa. Hold on a second. What did you just say?

What did you just say? to jack up your prices way more than is necessary so that you can reap record profits and be rewarded with even higher multimillion dollar annual salaries. On the other hand, how's the American consumer doing? Oh, let's check in on that. Put the CNBC tariff sheet up on the screen. As inflation soars, one in five workers say they can't make it from paycheck to paycheck. Roughly 20% of employees regularly run out of money completely between paychecks. That is up from 15% last year, according to a survey of more than 3,000 working adults in February. As a result, about one quarter of those polled

said it is harder to afford necessary expenses and one third are unable to build savings, issues that are particularly problematic for low to moderate income workers. If you want to know why workers are thinking about joining unions, why they're going out on strike, why they're leaving their jobs, why they're engaging in other forms of protest, this says it all because they see what's happening. I mean, they see the way that money was just shot at the top end of the spectrum by the billions, the way that they are reaping profits that they have never seen before. And then they try to come to their workers and say, oh, we can't possibly give you a 50 cent raise or a dollar raise or give you a little bit more time off or make your scheduling more predictable. They're calling bullshit and good on them because it's very clear what's going on here.

Yeah, look, all we can do is just tell you the truth. Look at the actual numbers. Look at whatever they're asking for. That's what it's all about. And you take away exactly what you will when it comes to that. We talk a lot here on the show about how cable news is influential, but it may not be as influential as a lot of people think, especially whenever it comes to Tucker Carlson.

Let's put this up there on the screen. There's a lot being made, Crystal, about Tucker and his coverage. I'm not going to say it's not important. But if you actually look at this new Pew Research polling, what they find is that the Tucker Carlson view, especially on Ukraine amongst the GOP base and even on the broader US population, hasn't had a whole lot of effect. And I think that one of the problems that people have is that they look at Trump's influence on the GOP base, and then they try and analogize that to Tucker or to anybody really, Hannity on Fox News. It's just really not the same level of transferable power. And I've watched this actually happen in the GOP primary, which is another useful test, which is that look at the candidates that Tucker most prefers, J.D. Vance and Blake Masters, clearly who have been on his show.

Neither are actually first place in the polls. J.D. appears to possibly be getting there but was trailing behind despite being on Tucker's program repeatedly. Masters, the polling is all over the map, but at one point the guy was like in fourth place. And I just think it's interesting, again, Trump's endorsement means a lot. It may not mean as much as it once did, but people try and look at them as exactly the same. And I just don't think that's the case whatsoever. And this pairs with, I just sent actually you last night polling about which political media figures are most trusted by Republicans, who's most trusted by Democrats, who's most trusted by the nation at

large. First, you will not be surprised to learn that like none of these figures has over 50% support among the broad public. But Tucker does rank as the most trusted media figure that they tested for Republicans. So it shows you, even with the person who has, you know, by the polling, the most sway with the Republican base, it ultimately only goes so far. And I also think it pushes back against the idea that this is just like a mindless mass of automatons who are just going to do what their leadership tells them to do. And even though in some ways it contradicts the study that we showed earlier about how people who are religious Fox News viewers, they can have their opinions influence and their minds changed if they're

like forced onto a CNN diet. I think it pairs in this particular way, which is that both show that people are not just locked into one view and hardened in and it doesn't change and that's that. They are open to evaluating other evidence when it is presented to them. So you can see that, you know, on the actually put the element back up on the screen because I want to take a look at this graph again. What they ask here is whether or not you have confidence Vladimir Putin will do the right thing regarding world affairs. And you can, in fact, see when Trump is elected and you're like at the height of Russiagate and all of this stuff. And he's very friendly towards Putin, at least rhetorically, even though his policy was actually quite hawkish, you see that there's a high of somewhere around 37 percent of Republicans who have confidence in Putin, and it is divergent from the rest of the population. Well, now there's almost no partisan divide whatsoever. That support or confidence has completely fallen off a cliff. And those who

are saying they have no confidence, you know, Democrats are at 94 and Republicans are at 92. So there's almost no difference. The only rhetorical difference is in these sort of very narrow corridors of elite Republican opinions. And clearly the base has a mind of their own on these issues. So it is interesting to see. I think why it's important is that as even as much as we talk about how much cable influences people, from my experience, most people who love Tucker and who watch Fox, their only uniting view is on the culture war. Whenever it comes to foreign policy and stuff, they're much more willing to depart and to have their own, not necessarily have their own assumptions not challenged, but to maybe tune it out or not go as along. That's just purely from whenever I used to appear on Fox. I can tell you

that the only thing that really gets ratings and that really works well is culture. And obviously that's 99% of what he does. But whenever it does come to foreign policy and more, as you can see from that graph, it doesn't necessarily have the impact that a lot of people has. And it doesn't politically translate in the way that a lot of people think. So it's good and it's bad, depending on your perspective. But I do think it challenges a lot of the way the mainstream media talks about it. Yeah. It's just good to have the information and understanding of how people process information because it matters a lot. A lot of people think that the New York Times is doing well right now. And in a sense,

that is true. But in another sense, they face the exact same problem that sports news website, is specifically because they have a old white Democrat problem. Basically, the vast majority of their subscribers are old, they are white, and they are liberals. And well, there is just a certain point where you reach a ceiling of old white rich libs across America before whenever you have to fulfill your stock price and have growth targets that it's going to be difficult. And so they're in a very difficult bind here, Crystal. What they point to is that they're trying to expand into areas which they're not traditionally have. Gaming, the cooking recipes, crossword. Actually, for the very first time just this year, the New York Times makes more money off of non-news products than it does off of the news. That's why they're also buying sports,

younger demographic, more diverse. But they have the same issue at the end of the day that all the cable news companies do. And he even points to the fact that 20 years ago or 15 years ago, a lot of people in the cable business said, ah, we'll figure it out. Yeah, old people watch us, but don't worry. The youngins will come. We're spending all this money on millennial marketing, but how did that work out? It didn't work out at all. So I think the Times, very much in the same problem. The millennials who do subscribe to the Times, probably rich white libs, just like normal. And that's just not really a replacement rate that you can count on in the current market. I mean, I think from a business perspective, they're fine and they're going to be fine for a long time. But the thing that really

matters for all of us is they're subject to the same audience capture phenomenon of any other news outlet. They know who their audience is and they have a very particular sort of ideological bubble mindset. And so you shouldn't be surprised when the bulk of their coverage is driven to like satiating a particular ideological worldview of that audience. And that's really, I mean, I think that's the way that this manifests in terms of like the information ecosystem that exists for all of us. Remember, we were having a conversation a while back about the lack of accountability from the media when they got some of these big stories wrong, like when they dismissed LabLeak out of hand right at the beginning. And we were saying like, you know, we find with our audience, when we just fess up, when we screw up, they actually really appreciate it because they feel like, oh, okay, well, of course, everybody's going to get things wrong at times. But if you're willing

to admit it, then I can trust you that you're going to be up front with me when you get things wrong at times. But if you're willing to admit it, then I can trust you that you're going to be up front with me when you get things wrong. And so we were saying, like, how come that never happens here? How come there's, in this world, like, there's no acknowledgement that the most maximalist claims of Russiagate were completely ridiculous or that they shouldn't have just dispensed with lab leak out of hand? Well, it's because they're in this ideological bubble where to acknowledge those things would not be rewarded. You would be really punished by this specific base by just acknowledging, you know, the reported facts that have come out at this point or, you know, on Hunter's laptop or some of these other stories that are uncomfortable for this worldview. So it not only, you know, it creates some like business risks for them in terms of their aging demographic profile, but more importantly, it creates some

real problems for us in terms of trying to sort through what's happening in our country and our world, especially when the New York Times continues to be the paper of record, so influential, have the type of resources that can put reporters on the ground anywhere in the world and bring you those stories. So we're still very reliant on them for information and understanding what's going on around us. Yeah, I think the biggest issue is that they continue to be regarded with the reverence of the paper record, but they're just a blog for rich white liberals that, yes, occasionally has great reporting and all that. But that's not what most people there are paying for. They're paying for the Michelle Goldberg op-eds and some of the other just absolute insanity that they have over

on the opinion page. That's the main driver. And same with the Russiagate coverage, unfortunately. So you put those things together. Yeah, but because they have the resources, I mean, even we have to depend on them. Of course. That's part of the issue, right? Where's the truth in what they're reporting out here? That's always the problem, which is that you have to then color it and try and wade through and that makes the job incredibly difficult. And you just see exactly how these all places have become so, so captured by their audiences and what they demand and what they can't do.

Imagine if they were to do some serious reporting on Hunter Biden. They would have cancellations. I know it would happen. And yet, that's part of the reason why then they have the best reporters, but then they direct them exactly in terms of where their resources will be best applied in terms of how their audience wants it to be, which then, as I always say, you know, what they choose not to show you is frankly more important than what they choose to actually show you. Yeah. Well said. Hey guys, our friend Marshall Kosloff,

he's going to be conducting interviews with experts and newsmakers for us here on the Breaking Points channel. We're really excited. Yep, here it is. Hey, Breaking Points. Marshall here. Sagar's co-host at The Realignment, also doing weekly interviews for Breaking Points, where we go a little deeper into a topic that's in the news. If there's any topics that are of interest to you, be sure to hit me up on Twitter, and I'll be sure to cover them in the weeks going forward.

Today, we're obviously going to talk about Elon Musk, Twitter, all those bits. That's why I'm really pumped that we're joined by a friend of both the Realignment and Breaking Points, Alex Keturitz. Alex is the writer of the Big Technology Substack and the host of the Big Technology Podcast. His work really is about looking inside tech companies and seeing what's actually happening, which makes you perfectly suited to tell us what the hell is going on with Twitter this week. Oh, man. Well, it's been one of the crazier weeks in Twitter history. And, you know, I think for a time we thought that we were done with most of the nuttiness with Twitter,

but clearly we haven't gotten started. It's about to get much crazier. And this beat is about as fun as it could possibly be. Man, I just want to say firstly, what do you mean by nuttier? It seems like, so what are the other previous examples of how crazy Twitter has been? And why did people think that with Jack Dorsey leaving, things were going to chill down? Then we'll get into Elon, of course. Yes, of course. So yeah, this week's big news is that Elon's joined the board. But I mean, in the past, there's been like two really absurd eras of Twitter history. And by the way,

Twitter's lived in an absurd era since it was started. So this is kind of, we kind of thought we might be getting out of it. The first absurd era is the infighting among Twitter, Twitter's founders and inside the organizational dysfunction inside the company that has been so difficult for Twitter to get through and actually get anything done. You talk about having Jack Dorsey in as multiple times a CEO. You talk about the fact that the company had a product every year for like five straight years, never built anything because they couldn't get their ducks in a line. The place has been about as dysfunctional as any company that exists.

And then like Jack Dorsey came in as CEO in 2015 after Dick Costolo left. And, you know, he said, listen, we're going to actually ship products. Now we're going to like rethink the fundamentals of the product. He introduced an algorithm. He made tweets longer. He created a, you know, centralized place first called moments, not called discover inside the app to find out what's going on. And he really solidified the company's identity as news platform, more than like a catch-all platform for celebrity stuff and sports stuff. No, he said, we're all about news. We're all about what's happening today. And it seemed like finally Twitter was on its way to some normalcy and direction under Jack.

And then Donald Trump enters the 2016 election primary, you know, for the Republicans. And listen, whether you like Donald Trump or you don't like Donald Trump, he turned Twitter into a madhouse, you know, both the platform itself and the, you know, inside the company. The company had no idea what to do with him. He was making these like, you know, extremely consequential tweets, challenging, like, you know, almost challenging the Kim Jong-un from North Korea to a nuclear rocket match, calling him like little rocket man. And there seemed to be and that was just like a normal, you know, one of the normal weeks while Trump was president. We never had a world leader use the platform in the way Trump did. And so, no, there was no saying that Twitter was going to be a normal place while he was president. Okay, he loses the election to Joe Biden. January 6 happens, Twitter decides after the inauguration or a few days after that to suspend Trump permanently, which is important. I'm sure we're going to get back to this at a certain point.

And by and large, the platform exits the Trump era, and it soon exits the Jack era. And Joe Biden's tweets are pretty benign to the point of being completely non-noticeable. I cannot think of a single Joe Biden tweet. But to your point, I could think of 10 Trump tweets and the audience can't see it right now. Exactly. So you would think that like, you know, whether you like the decision that Twitter made to suspend Trump permanently or not, the company was not a turbulent company. It became something of a boring company when it came to the drama surrounding it. That was until this week when Elon Musk first bought enough shares to get him 9.2% of ownership inside the company, and then joined the board Tuesday morning. And we are now firmly in the Elon era of Twitter history.

And Elon isn't just going to sit there and be quiet. He's promised that there's going to be significant change coming to the company during his era. And I wouldn't doubt that promise for a second. Yeah, it's funny. We had to give that history that you just described there because it really is important that people understand that Elon is jumping into a very volatile news personality situation but here's the bit that i think is also interesting and it speaks to the challenges the yuan's going to have there despite how relevant twitter has been traditionally the company hasn't actually performed that well relative to other companies so for example people say facebook twitter google as if these are all companies in the same category but twitter is is much, much, much lower.

It's not exactly putting the big in big tech. So can you talk about the business side of Twitter and how Ewan's actually going to interact with that side? Then we'll get into the speech stuff. Oh, well, I think the two are totally intertwined. So I might just jump right in if you don't mind. Yeah, please do. So Twitter has always struggled to generate the type of advertising revenue that a

company like Facebook or a company like Google might. And you're saying, well, why is that? They have hundreds of millions of people on the service or a hundred plus million people on the service every day using it with like a fair addiction, like someone like an Elon has, for instance. The biggest reason advertisers have stayed away from Twitter is because the platform doesn't really lend itself to contextual ads that make sense. So for instance, if you have two people in the middle of a flame war that just gets worse and worse and worse, and I'm giving a benign example of something that exists on Twitter, you don't want to be tied or Jack Daniels showing up in the middle of a fight where someone's calling the other person's mother terrible names. It's just not a good place for an advertiser to show up.

They'd much rather show up on, you know, Facebook or like a network television show where they know that the content's been vetted. You know, Twitter is an angry place powered by outrage. And it has long been a really tough sell inside the offices in Madison Avenue, where the big advertising deals get done in order to advertise on Twitter. Now, that being said, it's somewhat of a miracle that Twitter still brought in $5 billion in advertising revenue last year. And there's an argument to be made that that's largely because the company has moderated its content to the point that advertisers now feel that their ad for and they don't want to get anywhere close to some of these, quote unquote, brand safety issues. So I'll just wrap it up here and let you ask the next question. But, you know, if Elon's going to come in and he's going to have significant influence over the company, there's no doubt about it. If he's going to come in and say, we actually want to moderate less, it's going to be interesting because it's almost going to put his ideological interests at odds with the interests of the company's business and some of the company's employees. And so let's say Elon, because he has come out and said that he wants less, you know, more free speech on Twitter. So it's one of the weirdest cases of an investment

ever, where, you know, you could end up seeing Elon, you know, accomplish his goals, harm the business, and, you know, potentially wrinkle the employees, but also be seen, you know, by many as someone who restored Twitter to what it used to be, where the company wanted to be, in the words of its executives, the free speech wing of the free speech party. And you start putting that all in your head and it starts to explode because it doesn't make sense in any normal business analysis. But again, we're dealing with Elon Musk here, and it's not going to make sense as it would in the normal business analysis. Yeah. And you're not a lawyer. So I'm not expecting a perfect answer to this.

But aren't there implications when it comes to shareholder value and those ideas? Let's say if Elon's decisions don't actually lead to the company performing better, are there any implications for how that plays out legally or any bits of that? Because I want to make this very clear for the audience. What you are saying is old Twitter, free speech, libertarian Twitter was not that great of a business space. Once again, people have to understand there's a difference between public square, relevant Twitter, and let's say hyper profitable Twitter. There's not quite the perfect lineup between those two things. So yeah, you're right. Traditionally, CEOs are leaders of

public companies. And I would even put right now Elon as one of the leaders of Twitter. It's clear. You know, so let me just say how important Elon is to the company already. Jack Dorsey tweeted that he says, I'm really happy Elon is joining the Twitter already. Jack Dorsey tweeted that, he said, I'm really happy Elon is joining the Twitter board. He cares deeply about our world and Twitter's role in it. Harag, who's the current CEO, and Elon both lead with their hearts, and they will be an incredible team. I have never, ever seen anyone who joins the board being put on equal footing with the CEO and be referenced as a teammate, as opposed to someone who will give guidance, as in the way that Jack, who's also on the board,

put Elon into context. So I think Elon will have a tremendous amount of influence on the company's direction. Now, ultimately, it's up to the CEO, Parag, to be able to maximize shareholder value, which is sort of the core of the question that you asked, right? And so what happens if Elon influences their speech policies, and now they're making less money, can he get in trouble with the SEC or something like that? I think that it's possible, but I think it's highly unlikely. I think that Elon has shown that he can taunt the SEC to his heart's delight, saying that it stands for, and this is in his words, what does he say? Blank Elon's blank. That's what SEC stands for.

And get away with it. And he's had some penalties, but nothing meaningful, really, in the grand scheme of things. And so ultimately, I don't think there's going to be an issue there in terms of legal problems there. And the corollary to that is, and I think Elon could make a fair argument to say that public company values today are detached from the revenue that they bring in and the earnings report that they deliver. And all you have to do is look at a GameStop and look at an AMC and understand that

their stock prices were totally tied to the vibes of the moment. And no one brings better vibes when it comes to his support and his influence and his money than Elon Musk, if you're a public company. And so he could say, listen, shut up about the damage that you say I'm causing to the revenue. This stock is to the moon, and it's completely my doing. So if you've got a problem with that SEC, I think you should focus on looking at bigger problems. That's a potentially legitimate argument that Elon could make. When you said to the moon, I thought of the Peter Griffin family guy sketch. He said it, and you said it.

So I'm glad we could get that in. So, okay, so let's really sum up here. What are the actual, let's say, changes or beefs that Elon has with what's happening at Twitter right now? Because you could say he's dissatisfied with the general vibe of the company going into last week. That's what drives this decision. But does he think that Donald Trump should be back on the platform? Does he think that the company isn't shipping products fast enough? Does he think that Twitter shouldn't be, to your

point, a news platform as opposed to something different? What are the specific tangible things that he either has solutions to already or has indicated he specifically wants to change? Well, yeah, look, there's a couple of things that he's already kind of into that minor things. Someone talked to him about crypto spam bots that appear under every tweet. And he said, that's one of the most annoying things about Twitter. So I expect the development team to be the less online listeners. Yeah. Sorry, sometimes I have to bring it back to the real world. Yeah.

So look, so when you're on Twitter, if you look at a high profile person's tweets, if you look under the replies, there will generally be a bunch of bots that will try to get you to buy some shit coin and say, okay, like, you know, you can, if you give us this money, we'll give you that amount of money and you better do it now. You're getting quick. These appear like every, every tweet, or like if you tweet about Bitcoin in general, there will be like nine bots

who will just be like Bitcoin, blah, blah, blah. Here's a, some, you know, wallet that you should transfer money to. And then it's extremely annoying part about Twitter. So Elon pointed that out as something that's annoying. And so I imagine that the Twitter development team is already getting working on a solution to that. He also has like, you know, kind of taken a flick at the bringing in an edit button and seem to be going back and forth in the comments about how it could be done. So maybe we start to see editing take place on Twitter. There's probably lots of different product ideas that he has. I mean, he might be in the top 1% of people in terms of use on the product. The dude uses Twitter like a maniac, both in terms of the money tweets and in terms of how often he's on it,

which is amazing for a guy running two companies at the moment or three, if you count Boring Company. And so I think that he probably has some product ideas. And I really think that there's a good chance that he does get into these speech things. Now, whether he can do that as someone on the board is a question mark. But he has indicated in the past that he doesn't think Twitter has, is doing a good job being a forum for free speech, given that it's serving at the de facto town square. So could he push the company to be more lenient or at least to, to, you know, rationalize some of the speech rules that's possible. And then, you know, the Donald Trump question is so interesting.

Here's my perspective on it. And we just talked about it on Big Technology Podcast, the one that's actually going up this week. But can Donald Trump, can Elon Musk have any credibility if he's coming in talking about how Twitter is pulling back speech, the ability to speak? Can you have any credibility if within six months Donald Trump is not back speech, the ability to speak. Can you have any credibility? If within six months, Donald Trump is not back on the platform, you know, he'll be, he'll be looked at as either powerless or someone who's empty with his words. And, you know, again, like I'm not, I'm not going

to stay, stand here and say, I'm a fan of what Donald Trump did on, on January 6th. I am not. And I do think there should have been recourse for that. And I think that Twitter might have had, probably had a good rationale to kick them off the platform after that. Although then there are arguments, well, why can the tally ban be on Twitter? Or why can the Russian foreign ministry?

And I think those are legitimate arguments to discuss. But ultimately, the guy was the president of the United States. He's banned off of Twitter. And so if you're a trailblazing guy coming in, investing billions of dollars and talking about how Twitter is not a forum for free speech, and under your like tandem leadership with the CEO, Donald Trump remains suspended, then what were you actually talking about? Because it wasn't free speech. It was forms of speech. And we can have a discussion about that. But you can't hide behind this label of being a free speech crusader if Donald Trump remains suspended. And that will bring him at odds with the Twitter employee base in a real way. And

that could be another interesting battle to watch. So to sum up then, it seems as if the metric we should be looking at, it's not particularly gonna be the number of products they're shipping because that's already improved, right? Like who would have thought three years ago that Twitter spaces would get turned up so quickly to compete and frankly defeat Clubhouse.

So like that speaks to something. It would really be how are they going to deal or how Elon deal with this very symbolic, but also deeply important example. So here's the last question I'll wrap with. It speaks to like your bigger work at big technology. So you've spent years just in the industry, looking at these companies, you actually even wrote a book about this. And here's the question. The book's called Always Day One, obviously. How much do individuals, even big shareholders, such as Elon Musk, CEOs ultimately matter in the face of these massive companies? So like to your point earlier, we started the podcast by pointing out there's been a big personality re-interjecting itself into Twitter consistently every few years. So

we're keeping up tradition here, if anything. How much do you think this has tended to matter in the tech industry as a whole? Oh, I think with someone like Elon, it can matter a lot. And let me give a little bit of evidence to the point. So you mentioned right before that Twitter shipped Spaces and seemingly, which is its Clubhouse copycat, although who knows what Clubhouse is anymore, right? It's now become Spaces. Spaces is what Clubhouse used to be. And they shipped it at lightning speed.

Why did that happen so quickly? From my understanding, in 2020, an activist investor named Elliott Management bought a 4% stake in Twitter and said it wanted better product development and put all these specifications. Otherwise, Jack had to leave the company. And Elon bought more than double that percent of the company. And he has promised significant changes are going to come to the company just on Tuesday. So given that context, I think Elon can make a big difference. Now, is it going to be necessarily they'll build the products that Elon wants them to build? There might be some of that. Is it going to be that they'll enforce the speech, content moderation policies that Elon wants? That's going to be tougher, but there might be

some of that. Is it going to be that the product teams there know that Elon Musk, the guy who built, you know, the world's, you know, most popular electric car, you know, when it comes to brand, ships that go to outer space, right, and can land on reentry, that this is the guy who is the largest independent shareholder in the company, and he wants them shipping. You think that's going to light a fire under their butts? Absolutely, it will. And so we'll see what happens now. And I'll note that a company like Twitter does serve an important function. I wouldn't mess with it too much. But we're about to see a series of changes come to the company, maybe unlike we've seen before.

And we already recently thought we were shipping fast. And it just makes the, you know, the world of following and covering this company, you know, so interesting as it's been from the outset. You know, the first week I was on the beat, there was a CEO change, and it hasn't really slowed down since then. And so here we go. It's going to be a fascinating new era under Elon Musk. And the one thing that I can promise is that it will not be boring. Well, I can guarantee you we will have you on at some point in the next two or three years to have this exact same conversation all over again. Alex, I'd love for you to just shout out where folks should take a look at your work if they're interested in learning more. Awesome. Thanks, Marshall. So you can find

Big Technology Podcast on your podcast app of choice. Just type in Big Technology Podcast. We have a long discussion with Chris Mims from the Wall Street Journal about Elon's entry into Twitter as an investor and the board. You won't want to miss it. And then my newsletter is called Big Technology. It's on Substack. And deeply aware of breaking points. Listeners will remember Chris Bims came on last week to do this version on supply chain. So the world is incredibly small as always. Alex, thank you for joining us on Breaking Points. Hey guys, Kyle Kalinsky is letting us post some of the clips from his channel that we think you guys will really love in the Breaking Points community on our channel. Yep. Let's get to it. Okay, next.

So Kamala Harris gave a two-minute non-answer when asked a question directly about Vladimir Putin and him staying in power. Let's take a look and then I'll react. And when the president was there, he gave a speech in Warsaw. It was well received by many. But he also said something that I think was received well by some, but kind of surprised others. He said that Vladimir Putin should no longer be the leader of Russia. Do you agree? Listen, I think that you framed the point quite accurately and well, which is America's policy has been and will continue to be focused on the real issue at hand, which is one,

the needs of the Ukrainian people people which we will continue to support through humanitarian assistance through security assistance but also ensuring that there's going to be serious consequence for Vladimir Putin and Russian aggression as it relates to Ukraine which is why our policy from the beginning has been about ensuring that there are going to be real costs exacted against Russia in the form of severe sanctions, which we know are having a real impact and an immediate impact, not to mention the longer term impact, which is about saying there's going to be consequence and accountability when you commit the kinds of atrocities that he is committing. And I think the president has been an extraordinary leader.

To your point, Joy, I've been to Poland. I was in Romania. I've been to Europe, I think, probably at least three times in the last four months. I was in Munich, Germany, where I gave a speech at the Munich Security Conference. I was in France before that, speaking with heads of state about this issue, among many other issues, but most recently about this issue. And I will tell you, in sitting down with prime ministers and presidents, often the first thing they would say to me is, thank you to the United states and this administration for bringing

us together for building the coalition for reinvigorating the relationship between the united states and its nato allies reinvigorating reinvigorating the relationship and the importance of the relationship to the eu in terms of an issue like ukraine which is ultimately about one of the Wow. So the question was, in case you forgot it after that long, rambling, babbling answer, should Putin no longer be the leader of Russia? Her first response is, you know, you framed that point quite well. What point? She's asking a question. Should Putin no longer be the leader of Russia? You know, you framed that point quite well. Then she goes on to talk about, I've been to Poland and Romania and Munich and France

and other world leaders always say to us, thank you, US and this administration, for bringing us together. So you're not going to give an answer. That's what you're going to do, is you're not going to give an answer to the most direct question of all time. Should Putin no longer be the leader of Russia?

You couldn't give a direct answer to that. Look, she is... What's astonishing about Kamala is that she seems incapable of giving a direct answer on any question. She doesn't have the ability to go like, yes or no, and then explain it. And look, this leads to the issue of you come across as inauthentic. You come across as not trustworthy.

Because a more artful politician, even if they're dodging the question, they would dodge it in a smoother way, where you're not even sure if they did dodge it. Where you're walking away going, was that an answer? With her, you're going, oh, that definitely was not an answer. There was not even close to an answer in there. So how should she have answered the question? It's very simple. Should Putin no longer be the leader of Russia?

The response to that is, President Biden was correct in saying, our goal is not regime change. And then you go on to explain that further. And by the way, the reason why you say that is because you don't want to heighten tensions with a nuclear armed power when we're in the situation that we're currently in, where there's a hot war in Ukraine,

where Russia invaded Ukraine, and we have NATO troops just outside of Ukraine, and every sanction of the sun has been unleashed on Russia, not just hurting the government, but also hurting the people of Russia. You want to make sure you don't say anything or do anything that raises the stakes even further when we're already on, like, nuclear alert that's higher than what the normal is it's you know probably the u.s is too not just russia you have to give that answer you have no choice but to give that answer but you can't do it and that's why biden shoved his foot in his mouth when he said man this guy can no longer be the leader of russia and when he came out and clarified he said look we're not changing our policy. Our policy is not regime change.

But I was just expressing my emotional outrage. Guys, you're playing with fire, man. It's really, really bad. It's really dangerous to act as you're acting. And even after Biden clarified, she couldn't come out there and say, no, our goal is not regime change. You have to say that. You have to say that. You have to say that, even if at your highest aspiration, you're sanctioning Putin and the oligarchs with the

hope that the oligarchs and or the military might squeeze him out. You still should be like, our goal is not regime change. Because then also you give him a massive propaganda win, he gets to turn around to his own population and say, see, big bad evil America, this is always what it was about. This is always what it was about. They hate you, they hate me, they hate Russia, and they're the aggressor. See, they're talking about overthrowing me. Look at what they're doing.

So it's just, it's such a bad answer. It's so bad. By the way, there is no captain of the ship. Nobody's steering the ship. I mean, Biden has repeatedly stated no U.S. boots on the ground. That's good. But I certainly think that with all the sanctions that have been unleashed, that it's gone too far because now it's hurting Russian civilians.

So I think he's gone too far even on the sanctions front. And it's just a scary situation when you feel like everybody's just sort of reacting in a very reflexive way. And that's how you sleepwalk into World War III. It is. And, uh, you don't hear, you don't hear direct answers. You don't hear clear answers. You don't hear direct answers. You don't hear clear answers. You don't hear leadership.

You hear both Biden and Kamala Harris tripping over themselves and being like spineless, mushy politicians at the last moment that you would want them to be spinely, spinely? This is spineless, mushy politicians. So guys, for the love of God, just say no. The goal is not regime change. Just say no. It should have been

the most obvious political layup ever, but instead you get babbling about, here are all the things we should have done, and you frame the point quite well, and I've been to Poland and Romania and Munich and France. Remind me of when Sarah Palin was like, I could see Russia from Alaska. Like, what? Thank you for bringing us together. Thank you for bringing together the EU and NATO and all that stuff. You can give the response about, here's all the actions we have taken, but you have to lead with.

Our policy, our goal, is not regime change. She couldn't do it. She couldn't do it. I'm perpetually amazed at how bad she is at this. I mean, she's not even in the spotlight that often,

and her approval rating is still hovering around like 28%, which means every time she opens her mouth, people are rolling their eyes. And I'm sure that there's jockeying for position behind the scenes where, you know, her and Mayor Pete and many others are angling to be the next president. But if this is all you got for public appearances, well, it's no wonder you're doing as bad as you are. Remember when she called herself a top tier candidate? Remember that? She went from like one of the leaders of the Democratic primary to the second she started talking, immediately tanking. It's very similar to Hillary in that respect.

But at least Hillary got through the primary. Kamala Harris didn't even make it to Iowa, didn't even make it to the first contest. And you can see why with answers like this. Today, I'm going to tell you a story. It's a story about why the economy is screwed up, why America is screwed up, and in particular, screwed up by businesses that are frankly kind of lawless. And it starts with a question. Who killed the laws that used to control big business?

Now, I'll have some documents that have never been seen before publicly explaining what happened. It's something of a secret plot, a real conspiracy. But there's also a happy ending to this story, sort of, and one in which you can actually play a part. Now, I'm Matt Stoller, and this is another big breakdown. So what is the problem exactly with our economy, with our society? Well, there are many. Wages don't rise with profits. People are afraid of their boss. Medicine costs way too much and is full of really annoying and harmful bureaucracy. Corporations like Boeing can't even do the things that they are supposed to do, like build airplanes that don't crash. There's even mass censorship, which often we don't see.

So, for instance, Sager and Crystal have pointed out that YouTube sometimes downgrades breaking points videos, depending on the content. This is true for other firms like TikTok as well. Now, there's a thread connecting all or most of these problems. Monopoly power. And monopoly power is undergirded by a specific technique used by Wall Street, mergers. Corporate mergers create monopolies. Now, over the last four years, waves of these corporate mergers have consolidated economic power into the hands of a small group of people that basically control all the money in the world and put you and me into automated phone trees whenever we need to get a hold of someone to help us.

So let's talk about mergers. What is a merger? A corporate merger is what happens when two corporations combine into one corporation. Here's a clip from a slick video that was made by one of these corporations. A merger occurs when two companies combine to create one organization. For example, Exxon and Mobil merged in 1999 to form a new company, Exxon Mobil. Ah, that's your friendly neighborhood giant multinational oil company recreating Standard Oil of the early 1900s.

Now, there are some good reasons that corporations merge. Like, let's say you have an owner who wants to retire and sell his pool maintenance business or small software firm. Or if a company is about to go bankrupt, it needs a lifeline. It's really not a problem when this happens, when small firms merge. But when bigger ones buy one another, like when Exxon buys Mobil, it's very different. When big firms combine, the goal is often to corner a market and raise prices, or lower wages, or often both. Big firms that combine, when they combine, when they merge, raise prices on average by 7%. And anyone who has tried to rent a car knows this,

since Hertz and Dollar Thrifty merged in 2012 and immediately jacked up what it costs to rent a car. So prices, higher prices, that's not all. Big corporations that merge usually lay people off. They reduce wages. They do more lobbying to corrupt politicians. And they pay their CEOs a lot of money. Now, you might remember that AT&T and Time Warner merger a few years ago. It was sort of a disaster for the two companies. There were big layoffs, AT&T, Time Warner. It's now splitting up. They fired a bunch of people and destroyed a lot of shareholder wealth. But the merger worked out for Time Warner CEO Jeff Bukes, who made $400 million with his golden parachute payoff when he sold Time Warner to AT&T. So that's an unsuccessful merger, and many mergers are unsuccessful, and they're a waste of time. They cause a lot of

problems. But mergers that succeed are almost worse, because mergers, when they succeed, of big companies, more importantly than screwing things up, they create monopolies. They consolidate economic power. So, for instance, Google, which is the company that sometimes censors this channel, has bought hundreds of firms since 2002, including, yes, YouTube. Facebook is another one that controls how we can communicate and think, bought Instagram and WhatsApp. Amazon, control over books, but also online commerce, has made hundreds of acquisitions to expand its business and wipe out potential competitors. It's not just big tech, the music events producer, just to pick one at random. Live Nation bought Ticketmaster over 10 years ago. And that's one reason ticket fees have been

going up and up and up. And musicians and event producers routinely get bullied. There were 24 major airlines in 1980. Because of mergers, and there's some mergers listed on this chart, today there are basically four major airlines. The result is flight cancellations. There was a bunch of flight cancellations this weekend or last weekend on Southwest, but there have been hundreds of thousands over the course of the last few years. Ticket fees that we all love, poor service for those flying from big cities, and more importantly, the end of access to flights to and from most smaller and many mid-sized cities. A big chunk of the country just can't get access to the air grid anymore. Now, behind so many problems in our economy and in our society, you can find a merger

or two or five. Take the 737 MAX. Yep, that is a result of Boeing merging with McDonnell Douglas. Drug and medical supply shortages? Yep, that's a result of mergers in an obscure space called group purchasing organizations. High ammunition prices? Yep, that's because a corporate raider bought and ruined Remington about 10 years ago. There are a lot of details in my newsletter on all of these case studies if you want to know more. I don't want to get too much into details on any particular one because that will get in the way of what I'm really trying to convey today. But you can look all of these up. They're really interesting. And the point, overall point here is that there are mergers that have consolidated everything from cheerleading to mail sorting software to prison phone services, pretty much every nook

and cranny of our society. So for instance, in 2019, two large Nevada gold mines merged, and the merged entity ended up controlling 75% of Nevada gold production. And so what did this new firm do? Immediately, it broke the union and reduced compensation because workers no longer had a choice of where to work. Okay, so mergers between big firms are almost always bad. So why do we allow them? As it turns out, we didn't used to. And there's still a law against most of these big bad mergers. And it's called the Clayton Act.

It was passed in 1914. It is, however, a law that for the last 40 years has largely gone unenforced. Why? There aren't that many actual conspiracies in politics, but this is a real one. In 1980, the incoming Reagan administration hatched a plot. They were trying to figure out how to get rid of antitrust law, how to release unfettered big business on the land. But they realized that repealing the law outright would be unpopular. So here's what they did instead. This is a memo that a researcher at my organization found in the Reagan Library. It's titled, Throttling Back on Antitrust, A Practical Proposal

for Deregulation. Now, in it, George Stigler and Richard Posner, who were two famous antitrust thinkers, unveiled a plan to get rid of the Clayton Act without having to go to Congress. And remember, the Clayton Act is the law against these big bad mergers that have ruined a lot of the American economy. Now, the honest way to repeal a law is to make your case publicly to go to Congress and get them to vote to repeal a law. And the Reagan administration, to be fair, did try that with the Clayton Act in 1986. But Congress refused to go along because people don't like big bad mergers. So instead, the Reagan administration effectively repealed the Clayton Act secretly. And here's how. There are instructions to courts and enforcers how the antitrust division thinks merger laws

should work. These are called merger guidelines. And judges basically trust enforcers and have trusted enforcers to tell them how to think about mergers and the Clayton Act. The law is a little bit vague, so these guidelines kind of fill in some of the blanks. The Reagan administration antitrustors took advantage of this, and they quietly rewrote merger laws. That's what that memo is about. Now, getting rid of the law without repealing it, but just not enforcing it, was an intentional strategy. Reagan's key antitrust enforcer was a guy named Bill Baxter. That's this guy. Baxter followed the secret plan and simply refused to enforce laws he didn't like. This included a bunch of the antitrust laws. He called, for instance, Supreme Court decisions

that mandated strong antitrust rules, quote-unquote, rubbish and wacko and idiocy. It's what he called one precedent. He just refused to follow the law. Now, the plan that Stigler and Posner outlined and that Baxter carried through worked. The antitrust laws basically went away without being repealed. Now, here's a chart. The formatting of this chart is very old-timey because it's an old chart from the 1980s, and it's on just what happened with corporate acquisitions after the new guidelines in 1982 kicked in. Now, on Wall Street in the 1980s, and then every decade since, it's been all about mergers and acquisitions, in which dealmakers make millions selling companies to one another, and corporate raiders, who are now called private equity, make billions, often by buying companies, monopolizing markets, and laying off workers.

Now, the culture on Wall Street and beyond basically became, in the 1980s, greed is good. In fact, one could argue that that was the motto of the 1980s. It was in a famous Oliver Stone 1987 movie called Wall Street. The thing is, greed is always with us. It's not like greed is new. What has changed wasn't human nature. We didn't become greedier. What changed was the law, and specifically, the merger guidelines. Now, this legal change was so important that it literally rebuilt corporate America. Over the next 40 years, nearly every major firm was either acquired or it became an acquirer. And Bill Clinton, who is arguably the worst man alive, maybe in competition with Henry Kissinger for that title, actually made the problem worse. So did George Bush, Barack Obama, Donald Trump. And thus,

Boeing 737 MAX, Ticketmaster, airline fees, lower wages, and so on and so forth. But here's the thing, and this is where there's sort of some good news. The era of greed is good is ending. Both parties, increasingly, and the American people writ large, have had it. That's the good news. So let me introduce you to a new law enforcer named Lena Kahn. Kahn is the chair of the Federal Trade Commission, which is the agency that is supposed to police fairness in our markets, including some parts of the Clayton Act. She's the youngest chair in history, and she is something of an ass-kicker. Both Google and Amazon lobbied heavily against her nomination.

They lost. She's a regular topic of conversation on CNBC, which is the news channel of Capital, because Khan wants to revive how we do antitrust, how the government, how our democracy relates to big business. So let's take a listen about how she thinks about big business and the law. Historically, there have been various moments in which there's been a recognition across jurisdictions that if you allow unfettered monopoly power to concentrate, its power can rival that of the state, right? And historically, the antitrust laws have a rich tradition and rich history. And a key goal was to ensure that our commercial sphere was characterized

by the same types of checks and balances and protections against concentration of economic power that we had set up in our political and governance sphere. And so the desire to kind of check those types of concentrations of power, I think, is deep in the American tradition. So that's Lena Kahn talking about how she thinks. That's her philosophy. And it's an old philosophy, but not agreed as good philosophy. Now, powerful firms like Google and Amazon also lobbied to prevent the other main antitrust enforcer in the Biden administration from being nominated. And his name is Jonathan Cantor. Less famous than Khan, he runs the Department of Justice Antitrust Division. But don't be fooled.

Cantor is a longtime antitrust lawyer, but he is also bringing an aggressive new philosophy into the division. He has actually called for bringing back handcuffs, aka criminal charges, for executives who illegally monopolize. And that raised a lot of eyebrows. Now, Lena Kahn and Jonathan Cantor are Democrats. They were picked by the Biden administration. But the right is also very angry about corporate power as well. Here's Laura Ingram last week on Fox News talking about the social power and economic power of Disney and Apple. The antitrust division at Justice needs to begin the process of considering which American companies need to be broken up once and for all for competition's sake and ultimately

for the good of the consumers who pay the bills. So you've got Kahn and you've got Cantor, and they're Democrats, but they actually had around 67, 68 votes in the Senate, so a lot of Republicans voted for them. And then you have regular anti-monopoly arguments on Fox News. Now, of course, there are deep divides about social questions underpinning anti-monopolism on both sides. But both sides are increasingly realizing that dominant firms shouldn't be making key decisions over how society works, even if they disagree with each other about what they want those decisions to be. Now, Kahn and Cantor have decided to take a playbook from Reagan and are rewriting the merger guidelines. But this time they're doing it in reverse. They want to enforce the law,

not quietly repeal it. And here's where you come in. They want your help. Kahn and Cantor have opened up a process for the government to solicit comments from the public on mergers. Essentially, they want you to email the government and say what you think. The reason this matters, the reason your comments matter, is because the new guidelines will be attacked in the courts. And judges are going to want to make sure that these merger guidelines are based on real input. And I've looked into the docket where there are a bunch of comments. There are a lot of nerdy and annoying economists and corrupt lobbyists who are organized, who are paid by dominant firms, and they have submitted their views saying everything is going great, we don't need any changes.

Kahn and Cantor need to hear from ordinary people, like you and me. Here's Cantor a couple of months ago talking about the need for such feedback. The views of consumers, workers, innovators, farmers, and others on the ground feeling the harms of market concentration present an incredibly valuable perspective for our efforts. And so here is our message to the entire American people.

Please share your views. We need your input, and we absolutely care what you think. You haven't seen any of this on the media, but this is what's actually going in the government. All the money and power in the world is being debated right now by these people with economists and lobbyists submitting comments in an obscure docket. And this is how politics actually changes. And I want to invite you in. So help out Khan and Kanter. If you have thoughts on mergers, if you've been through a merger, or if you've bought products from a company that merged, or if you just want to say no more power to big business,

go ahead and do that. How? Well, I've put a link in the video description that you can use. The deadline is April 21st, and that's in about a week and a half. You can submit anonymously as well. So if you're worried about retaliation, just do it without your name attached. So use that link.

There are instructions on how to do it. You can read as much as you want about it, but go ahead and get in there so that we can get a counterforce against the lobbyists. Now, a bunch of people have actually already submitted comments from doctors to video gamers to pharmaceutical producers. The doctors' ones are amazing, talking about private equity coming in and reducing wages and causing them to harm their patients. Really amazing. The video gamers are concerned about Microsoft Activision. But, you know, come in, chime in on whatever you're concerned about. Now, on one of the links below, you can also look at the docket like I have and read the comments that other people have put in

there. Now, what Khan and Cantor are asking for, what I'm asking you to do, may not seem like a big deal. You might think that your voice just doesn't matter, but here's the thing. In this case, it does. There are a bunch of comments, but only 300 right now in the docket. So that's not very many. And having one more or two more does actually matter. Your voice really can make a difference. It's a really bad time right now. It feels very divided. The media is constantly talking about doom, doom, doom. But if you look at antitrust, corporate power questions, we really are making progress. And it's not covered by the media. These kinds of obscure procedural issues that involve all the money and power in the world,

you don't see them on Fox News or MSNBC. You see them on breaking points, but not in the mainstream media. But we are making progress. Two and a half years ago, antitrust was just kind of an interesting idea. But today, there are five different government antitrust suits just against Google, and many more that are going to be filed against a lot of dominant firms. So I'm asking you to submit a comment because it will have an impact. Let's reverse what our leaders have done to this country and free ourselves from the monopolies ruining our society. Thanks for watching this big breakdown on the Breaking Points channel. If you'd like to know more about big business and how our economy really works, you could sign up below for my market power focus newsletter, Big. Have a good one. Camp Shane, one of America's longest running weight loss

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