Breaking Points with Krystal and Saagar - Mini Show #52: Political Labels, Dark Money, Stock Buybacks, Airline Dysfunction, UPS Workers, & More!

Episode Date: August 27, 2022

Krystal, Saagar, & Friends break down Kamala's unpopularity, political labels, George W. Bush on Masterclass, DeSantis' ad, GOP dark money, primary elections, airline dysfunction, UPS workers, stock buybacks, podcasting & more!To become a Breaking Points Premium Member and watch/listen to the show uncut and 1 hour early visit: https://breakingpoints.supercast.com/To listen to Breaking Points as a podcast, check them out on Apple and SpotifyApple: https://podcasts.apple.com/us/podcast/breaking-points-with-krystal-and-saagar/id1570045623 Spotify: https://open.spotify.com/show/4Kbsy61zJSzPxNZZ3PKbXl Merch: https://breaking-points.myshopify.com/Tickets: https://www.ticketmaster.com/event/0E005CD6DBFF6D47 The Lever: https://www.levernews.com/Dan Marans: https://www.huffpost.com/author/daniel-maransMatt Stoller: https://mattstoller.substack.com/Max Alvarez: https://therealnews.com/James Li: https://www.youtube.com/c/5149withJamesLiMarshall Kosloff: https://www.youtube.com/channel/UC3O3P7AsOC17INXR5L2APHQ Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

This is an iHeart Podcast. They're revealing new poll out of the state of California about exactly how they feel, not only about President Biden, but about California native Kamala Harris, current vice president. Let's go and put this up on the screen. So this poll finds that Kamala Harris, if Biden doesn't run for president, she would trail in the polls in California behind both current Governor Gavin Newsom and Bernie Sanders for the 2024 nomination. And Bernie is ruled out running if Biden is running, but has left the door open if he's not running. Gavin Newsom is obviously

chomping at the bit to run for president and positioning himself to do that. I think, you know, also if Biden doesn't run, the numbers specifically are Newsom would get 25% in terms of first choice. Bernie Sanders would get 18%. Kamala would be 18% as well. And then Pete at 13%. They say that Harris trails fellow California Newsom 54 and Sanders 80, the two-time presidential candidate. Newsom and Sanders each ranked as the top choice of 13 percent of respondents. So I think what they're doing here is they combine a first and second choice. And that's where Bernie and Kamala are tied with first and second choice. But if you're just looking at first choice, Newsom and Sanders are actually tied at 13 percent.

So that's why that's a little bit confusing. Also in this poll, though, Californians not feeling another Biden term. Six in 10 respondents are against Biden trying for a second term in 2024. So pretty damning of both Biden and Harris here, ultimately. Yeah, I just think it's absolutely hilarious because when you see how she is losing by seven points in her own home state to the governor, as she is the actual chosen successor of the president of the United States, who is the leader of the democratic party, and she can't even come in first, let alone tied for third. It's humiliating. Yeah. I mean, this just takes us

back to the primary. She couldn't even win her own home state. That's why she dropped out of the race and then plucked from obscurity. A failed politician, as failed as what, a Cory Booker or any of these other, you know, Kirsten Gillibrands or whomever, and becomes vice president for no reason. And let's be honest, I think we all know why, because she's a woman and because she's a person of color. I mean, Clyburn made a hard pitch for her. That's literally it, right? It's just a box check. Well, I mean, this is what happens.

She was never even all that popular in the state in the first place. So this is one of just the most obvious examples of, like, someone foisted on us regardless of their job performance, regardless of, like, whether they're qualified for the job or not. And this is one of the main reasons I still have faith somewhat in democracy is people are like, yeah, no, they're like, it's not going to work. Well, you know, I mean, the interesting thing here is too, like these types of numbers are why I'm so convinced that Biden is just going to run again. Yeah. Whether he's. He has to, He's got no choice. Because they will be, they're sort of, you know, the establishment's backed into a corner of having to get behind Kamala Harris. And, you know, you look at her losing to both Newsom and Bernie in her own home

state and you're like, this is a disaster. Certainly she would not clear the field whatsoever. I mean, if Biden doesn't run, you're going to have Newsom get in. You could have Bernie get in. I don't know. You're going to have J.B. Pritzker probably get in. You're going to have, what is it, the governor of North Carolina is making sounds like he wants to run Roy Cooper. Roy Cooper, yes. Yes, Roy.

Cooper. I know I always want to say Roy Morris. Roy Cooper is the North Carolina governor. Pete Buttigieg obviously wants to run Roy Morris. Roy Cooper is the North Carolina governor. Pete Buttigieg obviously wants to run for president. So you've got this whole group that are chomping at the bit should Biden step aside. Now, I don't think that any of the people I just mentioned will actually challenge Biden directly in a primary, which is unfortunate because I think people deserve other choices. Not that I think that any of the ones I mentioned are particularly amazing, but they might be a little bit better than Joe Biden. But this is exactly why I think

that the establishment is going to decide after exhausting all other possibilities to stick with Joe simply because Kamala is such a weak candidate ultimately. And it just throws the whole set. They don't want to have like actual democracy. That to them is chaos. They want to be able to control the outcome. And with Joe, they feel like they can do that. Yeah, I completely agree with you. I mean, I just think it's insane. I do actually think Newsom might have an outsized decent shot.

Just because aren't they going to rig the primary system so that California won't be as late this time around? It would be one of those things where he'd have a tremendous delicate advantage. They did that last time. Right. So I just, it's interesting to consider. Like if they move it up on Super Tuesday, because people remember,

you know, Iowa's definitely not going to be first. We don't know which one will come. But New Hampshire, whoever is there, obviously will have the advantage. But if they move and make it Super Tuesday

more of a defining one, it is definitely more of a gift to anybody's more establishment with a lot of money. So yeah, fascinating. Yeah. So she only gets 10% of Californians who say she's their first choice. Complete joke. Think of how that's so sad. Cool. Some fascinating new data on how people consider themselves on the political scale. And this one in particular caught my eye. Let's put this up there on the screen. So a new morning consult study specifically of Americans and drilling down into Hispanic voters finds that Americans are less liberal than they were five years ago.

And that shift is driven almost entirely by minorities. So here is liberal identification by racial group. Hispanic, 50 to 34 percent, minus 16 in a period of five years. Amongst blacks, 49% to 34, minus 15. Other, 40 to 29, minus 11. And even amongst whites, 31% to 25%. So this may not necessarily be that they are conservative, but the fact that nobody wants to identify as, quote, liberal anymore in the period of five years perhaps reveals a lot, Crystal. I don't know what you think. To me, it just seems that it's incredibly cringe in order to do so. Right. Well, I mean, I don't want to be called a liberal.

Yeah, nobody does. I look at that and I'm like, is none of the above an option? Liberal? Very liberal? No. I mean, I guess, you know, people would probably put me in the, like, very liberal category, I guess. But I don't want to be called a liberal either. So I did.

There was another poll that came out that I thought was really interesting that in some ways shows that, yeah, there's like a liberal. Like that word has just become cringe and has a major branding issue, which is there was a YouGov poll that showed the way people's views on issues were shifting. And for people who changed their mind on different issues, on most of them, they moved to the left. So on same-sex marriage, 68% said they became more liberal versus 13%. This is of the people who said they changed their mind. On abortion, 50% said they became more liberal. 34% said more conservative. On the death penalty, 49% became more liberal

versus 21%. Drug policy, 48 to 26. Healthcare, 43 to 34. Climate change, 38 to 31. Free speech was the only one that was basically tied, 35, 36. So it's like at the same time that people are eschewing the label, their actual positioning on at least a bunch of social issues plus health care, they're telling pollsters if they changed their mind on it, they tended to move to the left on it. Yeah, I completely—that's why what these things mean don't mean anything. Like right, left. I've said it before.

Even think about the word progressive. What does that mean? Back in 2016. Well, that was different. It was like edgy to say you were progressive. It meant a thing. It meant sort of like not part of the corporate wing of the Democratic Party. Hillary Clinton was famously very sort of uncomfortable calling herself a progressive,

but recognized she needed to say it in the Democratic primary because of Bernie. So she said she was like a progressive who likes to get things done. Now the word is, has been completely co-opted

by a bunch of like super corporate, terrible, centrist Democrats. And so now it's just become utterly meaningless. Like I certainly don't identify as a, I don't feel like that word applies to me anymore either. So it is interesting the way that these labels and what they mean and the connotation that they have in American politics shifts over time in a way that might be disconnected from what people's actual issue positions and how they view the world.

I'll give you another example, America first. I probably took longer than most, but right after Trump was elected, I was like, okay. I mean, he really caused me to reassess everything. And I was like, you know what? I believe in this. I've had these type of inclinations. I'm abandoning this ideology.

I believe in America first. And specifically as an American nationalist, the primacy of the American nation, which translate to a policy level about trade, immigration, and also in terms of our general orientation to like the global environment. Foreign policy. Guess what? They don't believe any of that. Right. When they say American.

Right? It's like then they were like, Elise Stefanik is an American. And I'm like, well, but she supported this and Afghanistan and didn't vote for this. And everyone's like, no, no, no, that's not what it means. It just means to be with Trump. I'm like, wait, so being America first is just being aligned with Trump because I thought it was like a real thing. So again, if somebody today was like Sagar, I'd be like, no, I'm not identifying with a label that immediately somebody's like, oh, you're like some Trump moron. And I mean that very much in the like imbibing anything Trump says completely uncritically. I'll tell you what I think

if you ask me like issue by issue. Right. But any of these labels. I don't want to associate. I don't want to associate myself with what people think of this label anymore. Exactly. Exactly right. So look, labels are going away. I actually think it's probably a good thing. Not in the way that the corporate people like to think. And most people should just think for themselves instead of like imbibing whatever, whatever they're like, here's what my person thinks. So I'm just going to align myself. Right. The minute that you try to say like, my ideology is X and therefore I'm going to just try to figure out what I think about issues based on what I think that X means that, that can, or you feel like you have to represent

that faction in a certain way, you're going to end up twisting yourself into all sorts of intellectual knots versus coming from a place of like, these are my principles, these are my values, these are my goals. Let me individually assess each of these pieces to see whether they further those goals, whether they're in line with those principles and values, you're going to end up in a much more honest place. Absolutely. So we previously brought you the news of Hillary Clinton's masterclass. And now we've got a new one for you.

Let's go ahead and throw this up on the screen. Former President George W. Bush is teaching a masterclass in authentic leadership, Sagar. I know you're going to want to hurry and sign up for that one. Yeah, I do. They say, learn to listen and sign up for that one. Yeah, I do. They say, learn to listen and inspire

a culture of teamwork. The 43rd U.S. President teaches leadership skills from his career, opens up about painting, step inside the Oval Office with the newest instructor in our White House series,

President George W. Bush, with insight from former First Lady Laura Bush. The former Commander-in-Chief opens up about the tough calls and life lessons that shaped his career. Develop and own a leadership style that's true to you and learn to lead by connecting personally with everyone in the room. Yeah.

Okay. Interesting. You know, I really encourage people to not take this master class and to actually read a book about George W. Bush. He genuinely might be one of the most mediocre, terrible presidents that we have ever had in American history. And it's difficult because so much of his image has been overshadowed by what happened with Trump and even Obama. Like people honestly just wanted to move on. I do not blame them for doing so. But this is the person who, you know, not only came in on strange auspices in 2000, it's not like the country was doing so well,

squandered probably one of the best moments to actually try to come together post 9-11 after this horrific disaster. Not only that, invades Iraq on false pretenses, refuses to abandon course, lies to the American people, abandons bedrock civil liberties at the same time the global financial system is all becoming precarious. And then it just completely explodes and he just leaves and takes up painting. And then five years later, it's like, it's all good, whatever. He's a nice guy. He's appearing with Ellen it's so shocking like when you read his

mediocrity as a child um all the way working up you know to becoming the Texas governor I mean what did he do before that like he was the owner of the Texas Rangers not even a real owner the part owner I mean that's that's yeah it begins there with like, yeah, he was the Bush family fail son. Yes. Totally mediocre in every way. Would never, ever have come anywhere close to the presidency, if not for the famous last name. Just total, like, political legacy admission, right? So you start with that. And then you end up with, you know, however much you want to say he was steering the ship or he was just being controlled by Cheney and the neocons.

It really doesn't matter because ultimately it happens on his watch. I mean, imagine you're an Iraqi who had your life and, like, people in your family, like, killed in war seeing this. And this, like, this celebration of George W. Bush and total rehabbing of his image and total erasure of what happened not very long ago in our past and the history of the world, it is wild. And, you know, and it's not just a, like, think about the failed response with Katrina as well. That was absolutely devastating. Think of the way that, you know, his actions in office lead up to financial collapse, the reverberations of which we are still dealing with and which shaped our politics for decades. Like, this man, through his mediocrity and through, you know, his allowing himself to

be a vessel for these, like, powerful and extremely ideological interests, he did so much damage to America at a really, really critical moment when it was, like, time for us to sort of, like, reset for the new era and, you know, reform some of the excesses of capitalism. And, you know, instead he squanders so much of our wealth, attention, and treasure. Contributes to this total sense of like nihilism and the fact that like you can't imagine that our government could accomplish anything forever. We could go on it forever. Like with this guy. Yes, and then it also says everything

about the liberal media, how shallow they are and how desperate just to go after Trump that they feel it necessary to rehab this dude in order to make their point. It's just so, so bad. Anyway, best W bio I read was by Gene Edward Smith. I think it is literally called W.

And W refused to speak to him because Gene Edward Smith, he wrote a is literally called W. And W refused to speak to him because Gene Edward Smith, he wrote a real biography. He was like, hey, this is how it actually all went down. And some of the other ones written about W are a little bit more sympathetic. There's the only redeeming quality about him.

He's incredibly fit for his age, which I do think is cool. I think on the morning of 9-11, this is actually shocking, he ran a seven-minute mile pace for three miles. And he was like 60 years old. He was in the 99th percentile of his health. So I guess props. And he did get sober, which is, you know, that's a good thing. I mean, here's the thing about him is I have zero doubt that he's one of these people, if you meet him on a personal level, you're like, what a nice guy. I bet I've heard the same thing from everybody.

And it's the difference. I mean, but that can be true, and it can also be true that he did things and made decisions that were absolutely, completely immoral, devastating, and had horrifying consequences for our nation, the world, and hundreds of thousands of Iraqi citizens. Very well said. As promised, Ron DeSantis has a new interesting ad out. I said Crystal needs to watch it, so we're going to watch it together. Yeah, I tried to avoid seeing it until

this moment. We saw a little bit of it, so you will all see her live reaction. Let's take a listen. Good morning, ladies and gentlemen. This is your governor speaking. Today's training evolution, dogfighting, taking on the corporate media. The rules of engagement are as follows. Number one, don't fire unless fired upon. But when they fire, you fire back with overwhelming force. Does it say that in the bill?

I'm asking you to tell me what's in the bill. Number two, never ever back down from a fight. If I could complete the question though. So you're going to give a speech or ask a question? Number three, don't accept their narrative. Wrong. It's a fake narrative. I just disabused you of the narrative and you don't care about the facts. It's why people don't trust people like you because you peddle false narratives. All right, ladies and gentlemen. Let's turn the page. Wow.

That was terrible. Number one seems to have taken a page out of Crenshaw's book. Oh yeah, oh, that's a great reference. This page out of Crenshaw's book. Oh, yeah. Oh, that's a great reference. This is a major Crenshaw move. Yeah, I don't know. I mean.

You know what? Actually, I got it more. To his credit, he did serve in the military. You know, got to say that. Like, he was a JAG officer, worked for the Navy SEALs. So, you know, whatever. I saw him saying, like, he said it was his wife's ID. She'd never say that. Don't say that. Yeah, yeah you can't blame her also i think she's suffering she has like breast cancer oh really yeah i wish

her all the best yeah um i had actually a more throwback reaction to it than crinshaw do you remember when tim palenti who was like the most boring generic person who's ever walked the face of the earth. His, I don't know if you remember this, he ran for president. He was the first person to announce. His opening video, it was like, it was produced by Michael Bay.

It was like explosions. And clearly they were like trying really hard to make it like Tim Pawlenty was T-Paw, was super excited and cool and a badass and whatever. And meanwhile, he's like the most meek, mild-mannered person that you possibly can imagine. I think it also speaks to, I mean, the whole thing there, there's no policy position. It's just like, I'm a fighter. I'm going to yell at the press and take on the corporate media. Which kind of does get to the heart of, like,

the Republican Party at its core now is more about an aesthetic than it is about anything else. So even that, I don't even mind. I just don't think the aesthetic was very good. And that's really my problem with it is I'm like, dude, this is just cringe. Like, you're just not this guy. I also feel like, yeah, you're not this guy, number one. Number two, it definitely reeks of, like, you're not this guy, number one. Number two,

it definitely reeks of drinking your own Kool-Aid. You know, you've kind of convinced yourself that you're this cool, badass character, but that's not how you actually are. I think they would have been better off letting supporters make a meme video like that, right? Because DeSantis

his problem is- Like the dark brand and stuff. Exactly. Yeah. It's just a little bit too much of still an old school politician. It comes through in the way that he speaks. It even comes through whenever he's like

owning the corporate media. It's not Trump-esque in the way that it's done it. And this is part of the reason why I like him, because people, why people like him. Because they're like, oh, well, he's like a mix between like a Trumpist figure and like an older school politician. But then he tries to he's like a mix between like a trumpist figure and like an older school politician but then he tries to make himself like a celeb or something it's just not

it just doesn't work this is also why and we're getting like way too many layers deep on this stupid ass thing but this actually does kind of encapsulate why i'm so skeptical that he could beat trump because he's just like a pale carbon copy of Trump. Kyle always points out he's clearly like studied Trump's mannerisms and tries to replicate, you know, the Trumpian, like whatever things he does. You see it very studied and very coached in kind of the same way. I mean, you see this whole crop of Democratic candidates who have emulated Obama, Pete Buttigieg, Cory Booker, Beto O'Rourke. They all studied his cadence and his way of delivering speeches and some of his mannerisms. And they just look like, you know, they're just, they're an imitation.

They're not the original. They'll never do it as well or with as great effect as Barack Obama did. So it has some of those vibes too. I completely agree. You know, this just happened right before we were filming yesterday. DeSantis gave me a speech and he's like, I'm sick of seeing him on Fauci. He says, I think he's going to retire. Someone needs to grab that little elf and chuck him across the Potomac. Now, I am not going to defend the honor of Dr. Fauci. I do think he is elfish in nature and, you know, chucking him across the Potomac. Wouldn't mind

seeing it. That being said, this doesn't work. Like, it's not him. You know, he doesn't speak that way. He's trying to play a part, you know, and it's all, I just think for DeSantis, he could just say, good riddance, and people would have cheered, right? It's like, why the histrionics? Like, it's just not you. If Trump said that, I'd be like, oh, that's funny. But with DeSantis, it's just. I mean, Trump is a legitimately funny person. Yeah, that's right. Like, he's actually comedic and funny. And that is very, it's very hard to be funny.

It's very unusual to be funny. Right. And so things that he can pull off and the sort of like, you know, he does a lot of physical comedy and stuff like that. I mean, it just like Ron DeSantis is not that guy. So yeah. Everyone, you're learning a very clear lesson in the it factor. So you know it when you see it. That's all I'm going to say. So sorry, Ron. Don't do it again. Yeah. This ain't it. All right. All right, everyone. It is time for our weekly partnership segment with our great friends. Over at the lever and joining us today is the man himself, David Sirota.

Great to see you, David. Good to see you. You all got a gigantic, major, massive scoop this week about the largest that we know of single donation to a big Republican organization. Just break down what we what you found there. Sure. So it was the largest political donation that we know of in American history. One point six billion dollars was transferred into a trust that is singularly controlled by a man named Leonard Leo. Leonard Leo is the Republican operative who has for years been spearheading the conservatives campaign to reshape the federal judiciary. What happened was a reclusive

billionaire named Barry Side, who owns a sort of family owned electronics company, effectively transferred the business itself into the Leonard Leo's trust, a secretive trust, a trust that, by the way, you can't find if you look in public databases, state databases. It's kind of off the map. So this company gets transferred into the trust, and then the trust sells the company to a larger corporate conglomerate for $1.6 billion, leaving Leonard Leo on top of $1.6 billion. And I should mention, the financial maneuver meant that Side likely saved up to $400 million in taxes that he otherwise would have had to pay had he simply sold the company under his own ownership. So here we are with Leonard Leo

having successfully spearheaded the campaign most recently to put those three conservative justices on the court. And now moving into this next era, he is sitting on top of $1.6 billion. This guy, I've never heard of him before. I've heard of Leonard Leo, certainly. And do we know anything about his ideology, what he hopes this money will ultimately accomplish? Has he been a big Republican donor in the past? So one of the most secretive billionaires out there, very few even photos of him. He has donated money to places like George Mason University, to the Heartland Institute, which is a very right-wing kind of climate science denying organization. So he looks like,

from what you can tell, a kind of standard Republican billionaire. Nothing really stands out other than that he has given money to right-wing organizations. But $1.6 billion transferring an entire company into a trust controlled by Leonard Leo is something so different than really what we've seen from anyone in American politics across the line. And I think it's, I want to go back to the secrecy here, that had documents not been obtained, that this might not have ever come to light because using a trust, trusts, again, are not, their existence is not a public matter. So without this kind of reporting, we would not have known, the American public would not have known, even about the existence of this mountain of money.

And it really speaks to the idea of what we've now allowed to be undisclosed in our politics, that the Watergate era, the original dark money scandal, birthed the original FEC laws, disclosure laws. We're now 50 years later, and more and more of the political system is hidden behind more and more secretive arrangements like this. And so if not for this leak, this would have happened, we would have had no idea, even though it's obviously extraordinarily consequential for what the future political landscape looks like. When you say you gave to George Mason University, that's very interesting because that's kind of, you know, it's the heart of a lot of radical libertarian thought.

Sort of a lot of the intellectual and ideological groundwork and sort of activist organizing started there. realize about the effort to put these justices on the court is, yes, the most prominent issue that a lot of the media attention, a lot of the sort of activist energy is focused on is abortion, which can sort of just, you know, notched a massive win. But what these justices are really vetted for extremely as well is a very radical sort of pro-corporate, like return to the Lochner era type of judicial philosophy. Absolutely. And I think Syed, a lot of his giving is about that. I mean, he comes out of the Chicago School of Economics. And I think that's when we talk about not just sort of Leonard Leo using dark money to run campaigns for Supreme Court justices, which he has done that. But that's at kind of the top

of the pyramid. What you're talking about is at the bottom, sort of the grassroots, long-term part of the conservative movement to recreate, and that's what I said, recreate the sort of the entire federal judiciary from the bottom up. So to create a kind of legal theory, legal doctrines, get future jurists, whether at the Supreme Court level or at the mid-level of the courts, get them sort of on board with those theories. And I should also mention Leonard Leo, of course, a big funder of his network, a big funder of the Republican Attorneys General. So to bring cases, specific cases to a reshaped federal judiciary, cases designed to knock down different laws and to change the laws of the entire country. Very interesting. You know, what I saw in reaction from the right, you know, they said,

hey, listen, fair game. Democrats have their billionaires. You've got George Soros, you've got Reid Hoffman, you've got other tech giants who give a lot of money, sometimes billions of dollars to Democratic and sort of left of center causes. Is there a difference in scale and scope here? How do you look at that? Look, it's hard to know because it's hard to know how much money is going into any of these organizations on all sides. I think one takeaway that should be reiterated is the Disclose Act in the Senate is a bill that has been introduced and reintroduced for more than a decade. The idea being that dark money groups would have to start disclosing their major donors. That's the fundamental premise of that bill.

It is not a bipartisan bill. It has not passed. At the same time, more and more money has flowed through these dark money organizations. The fact that it is not a bipartisan bill, that it is not a nonpartisan bill, that the parties can't agree that at least this money should be disclosed, that is really, to me, when I hear Republicans saying, hey, you've got your billionaires, we've got ours, I would agree that there are billionaires on all sides of our politics. Why can't we agree that there should be disclosure laws to at least let us know the full scope

of what's going on? Senator Sheldon Whitehouse has spearheaded the Disclose Act. The fact that it is still sitting there bottled up really tells you everything about American politics and how arguably the people who run American politics in both parties just don't yet want this money to be disclosed in a full and comprehensive way. Yeah. Well, definitionally, those are people who have benefited from this as it exists now. And the whole way that say a Nancy Pelosi is able to keep so much power and so much control over the democratic caucus is because she's a gigantic

fundraiser. That's a big part of her power. And I mean, you see it actually kind of hilariously on the Republican side right now because Blake masters, who's their Senate nominee in Arizona, who was very critical of Mitch McConnell during the primary, said he was going to vote against him for leader. He's going to vote for Tom Cotton or Josh Hawley or something like that and going after him. Well, now that he's struggling in fundraising and doubt in the polls, he's sucking right back up to Mitch McConnell. So

it does show you, unfortunately, how much money is at the polls. He's sucking right back up to Mitch McConnell. So it does show you, unfortunately, how much money is at the core. And let's be clear, one point on that, because it's so important. Both parties' major Senate PACs, the party-aligned super PACs that will help people like Blake Masters, controlled by, effectively, the political machine of Mitch McConnell. A larger and larger sum of those organizations' money is dark money, that dark money groups put money into the PACs that are essentially the central affiliated PACs of the parties themselves. So we don't know, ultimately, if Blake Masters gets that help from Mitch McConnell's super PAC, there's going to be a lot of that money. We're going to have no idea where it came from.

Wow. Essential reporting. Congratulations on this massive scoop. Obviously, the work you guys are doing is absolutely indispensable. And I think our audience knows that you would be happy to report a large donation on the center side Absolutely. Center side of the aisle as well, because you're, you know, in favor of a people's agenda. And I think that's what really counts here. David, thank you. Great to see you. Thank you. Thanks for having me. Hey, guys, welcome to a special Wednesday primary election results breakdown edition

of Breaking Points. I, you know, we're normally off on Wednesday, but there was a lot going on in New York and Florida in particular, and we didn't want to wait to thirst till Thursday to break it down. So we invited our great friend, Dan Marans of the Huffington post. I guess it's just HuffPost now, right? I can, I'm so old. I can never get that out of my head. Yeah. You know, though, I will tell you that when I introduced myself to people I'm trying to interview, I often say Huffington post because if I just say HuffPost fast, they think it's the Washington Post. But is that a good thing or a bad thing? Depends, right?

I just don't like to engage in false advertising. Gotcha, gotcha. All right, so we've got Dan here to break down all of the races in Florida and New York. There were some really pretty, stunning, shocking, surprising, interesting results. Maybe the most interesting thing is that New York actually seemed to do a pretty decent job counting their ballots. So we have some results to talk about there. So that's exciting. But I wanted to start with the state of Florida. A couple races here that I had my eye on, at least. The first one was kind of the top of the ticket, the Democrats vying for the title of who gets to take on Ron DeSantis for the governor's race this fall.

Talk us through that one, Dan. Yeah, so you had two main contenders, Charlie Crist, obviously a former governor who at the time was a Republican, turned Democrat and Democratic House member from sort of the Tampa area. And Nikki Freed, who is the only current statewide elected official in Florida who is a Democrat. She's the agriculture commissioner. She won in 2018 on a platform of making it easier to obtain medical marijuana licenses and protecting the state's water resources more effectively. I think that that was viewed as a very smart, specific way of connecting her post with issues that Floridians care about. And I think that for whatever reason, she decided there was nowhere to go from there. But I think given Chris' name recognition, but also the fact that I think Freed was trying to

make an argument that she was a little bit more progressive, a little bit more credible. She started engaging in certainly some gimmicks on social media in terms of calling out Ron DeSantis, but really being a little bit too online, never seeming to quite develop a deeper following beyond sort of a narrow subset of people. Chris just has a higher name recognition. And again, in a place like Florida, given the direction of the state, given the fact that back in 2018, when Ron DeSantis won that sort of pole-defying victory over Andrew Gillum, there was a sense at that time that the state could be moving more back in a democratic direction, that this was very marginal.

That was more like a Democratic wave year. Four years later, obviously, I think we see that Ron DeSantis is very much entrenched. I don't think we can expect. Let me ask you about that. Do Democrats think they have any shot to defeat him? I did see a one-loan poll that showed Val Demings, who's the Democratic nominee for Senate, ahead of Marco Rubio, probably an outlier. I would not bet on Democrats being able to pick up that Senate seat,

but a lot of people got excited about that. Do they have any hope that they could beat DeSantis in the governor's race? It seems like they're very concerned about him, of course, potentially running for president and being a relatively formidable opponent. So I'm sure they would love the chance to knock him out right here and now. I've not seen any indication that the National Democratic Party is prepared to spend money to either oust Ron DeSantis or Marco Rubio because I think they don't think it's a good bet. And they have other states on the map that are more gettable and even then are kind of reaches like Wisconsin. I think Georgia is an optimistic hold for them

and Pennsylvania is an optimistic flip. They're playing defense in Nevada, Arizona, New Hampshire, a number of other places. I think Val Demings is an incredibly strong candidate. You see her triangulating in a uniquely Floridian way, sort of calling Marco Rubio soft on Hugo Chavez or Nicolas Maduro. Sorry. You know, I would think that that has some play there.

But yeah, look, DeSantis is very firmly entrenched at this point. I think that he's a polarizing figure. I think that there's 35 to 40 percent of the population that that that dislikes him. But I think overall, his his his approach to COVID and some of these other issues has been popular. The state's economy doing well, people moving in from other states. Well, in a midterm election, the fact that you energize your side matters a lot. And, you know, I haven't dug too far into these results, but I know you made a bunch of endorsements in school board races that were very successful

last night for the right. So it seems like he has a lot of pull with the base there for sure. Um, I want to move on to, uh, another Florida race, which is really something, uh, Laura Loomer, who is this sort of, you know, truly far right figure who has openly said she's good with the white ethno state, um she supports that idea and calls herself a proud Islamophobe. I mean, she really is like a far right extremist type character, came very close to ousting an incumbent Republican and won the villages that, you know, large sort of like senior community, which has a lot of political weight in Florida politics, but appears to have clearly lost, but went ahead and gave this whole speech saying,

no, really, I won and I'm refusing to concede. And guess what? The vote was rigged. Yeah, it's a really peculiar thing when it's so transparently selective, how how when these people call election fraud. Obviously, I talked about in Western Michigan, there was this guy, John Gibbs, who is sort of an election denier out there, who the DCCC, the House Democratic campaign arm elevated because they preferred to run against him. He didn't seem to dispute his own victory when when he won. It only seems to be when they're on the other side of the coin that they play this. And I guess there is such a distrust of institutions that this can at least help their personal brand, help them make money, maybe. But I don't think this is going anywhere. She's, it is very interesting. These are, that she was able to bring it this close against a guy named Daniel Webster, sort of a run of the

mill dime a dozen, but deeply conservative Central Florida Republican. It does say something. I think it also probably says something about, as you were talking about energizing the base in a midterm year, but also especially in a primary election. I mean, this is probably even a smaller universe of the total Republican and or conservative electorate. Yeah. So the most diehard came out and many of them voted for Laura Loomer. There was a little bit of a left wing or progressive or Bernie Sanders victory in one of these primaries as well. Maxwell Frost, 25 years old, I understand. I think he'd be the first Zoomer in Congress. Break that one down for us, Dan. Yeah, so that's Florida's 10th congressional district. That's also a central Florida seat, sort of in and around Orlando. That's Val Demings' seat that she's vacating in order to run for Senate. Maxwell Frost, who is an anti-gun violence activist, was up against a sitting state senator, Randolph Bracey. And Randolph Bracey got the backing of a pro-Israel group, the Democratic

majority for Israel. Looked like it could be stepping up to be kind of shaping up to be sort of one of these expensive proxy contests. But Frost sort of established himself by building a coalition beyond just the activist left. He had the support of the Congressional Hispanic Caucus. He had the support of a number of influential labor unions and environmental groups. is a super PAC funded by cryptocurrency billionaire Sam Bankman-Fried that has the professed policy goal of investing in pandemic preparedness. That's sort of their thing, that they will quote unquote back candidates who support funding for greater research and preparedness for the next pandemic. And actually, if you do look at their endorsements, it's not just centrist candidates.

There are a number of progressives. There was Jasmine Crockett in the Dallas area in Texas, for example. But and they spent close to a million dollars on his behalf. So if you're an outside spender looking at that and thinking, is this even competitive? You might want to stay out. And that's actually what the pro-Israel groups did. So he did have this base of progressive support. He had the support of Bernie and Elizabeth Warren, of the Congressional Progressive Caucus

PAC, but also the Congressional Hispanic Caucus, which spent like a quarter million on him and this sort of pandemic preparedness group. Moral of the story is, if you're capable of broadening that coalition without compromising your values, that is certainly something to consider. But he is under fire actually from a local pro-Palestinian group from abandoning some of his sort of policy positions on that. To be honest with you, I haven't borrowed into the details on that. But I think one of the dynamics here is if you're running and trying to build that coalition, that sort of bigger tent coalition, it's not always that you will take a stance that is further right or what have you, so much as sometimes you might not be the person sticking your neck out on that specific issue. I think Greg Kassar in

Austin, Texas, who sort of said, I'm not pro BDS, he kind of watered down his stance on, on, he basically made it sound like he doesn't really want to condition, put imposed tougher conditions on USAID to Israel, just sort of saying like, hey, nothing to see here, move along. And that I think is the dynamic that I'm going to be really interested in on this issue of cryptocurrency regulation, which is that even if Protect Our Future, their outright policy agenda is not about cryptocurrency, and it is about pandemic preparedness. And you have these guys like Bankman Freed, who are by all appearances, true believing, quote, effective altruists, right, who believe that

you have to do these sort of quantitative calculations to determine how to maximize good in the world and all that sort of stuff. Bankman Freed is still sort of a believing investor in cryptocurrency, and he supports another super PAC called Web3 that is more explicit in wanting lighter regulation. We know what this industry as a whole wants from Congress, which is to be treated more like a derivative, which has a lighter regulatory touch than let's say a stock or a bond or something of that nature that would be regulated by the SEC. And I think it's just hard for me to believe that a progressive who comes in on that, under that, you know, with the backing of one of these groups is going to sort of say to themselves, you know what I'm going to do? I'm going to be the next Elizabeth Warren.

Right. And really take them on. Yeah. If you benefited from a million dollars in your primary from a cryptocurrency billionaire, and he helped you get across the finish line, I'm going to be skeptical that when push comes to shove, you're not going to ultimately vote the way that they want you to vote, even if potentially you're not, you know not the one really driving the train of saying we got to deregulate in the crypto space and we got to make sure they want it to be lightly regulated. But they still want to benefit from like the sort of safety net, the banking safety net that we have set up for established institutions. So, yeah, that is an interesting dynamic that is definitely worth keeping an eye on as well. I want to move to New York. So a bunch of interesting races here. Big headline for Democrats is there was a special election in upstate New York, really seen as a bellwether race. And analysts have been looking towards this one for months

now because it's in a district Biden won by a point and a half. It is as swingy of a district as you can get. It's won sometimes by Republicans, sometimes by Democrats. True barometer of sort of the sentiment of the voting public. And you had two candidates, the Republican and the Democrat. Molinar is the Republican. Ryan is the Democrat, who are both sort of well-established politicians, well-known in the region, so fairly fair fight between them. And the Republican was running almost exclusively on a message about inflation in the economy. Democrat leaning very hard into the new post-Roe abortion messaging. So, Dan, what came out of this very closely watched race? Yeah, I mean, I think this race is interesting on a number of different levels. But one thing I did

point out in my reporting is that Pat Ryan, the Democrat, will only be serving there for four months. He's filling a vacancy created by Antonio Delgado, who was picked to replace a New York lieutenant governor who got indicted. And so Pat Ryan is going to be finishing out that term and then running in a different district in November because his home was drawn into those new boundaries. Molinaro is going to be running in that district once again. So that should be an interesting dynamic. This is not one where in terms of hard numbers, the math of the house was affected, but it gives Democrats an ability to basically say, look, not only did you guys try to make this a referendum on the economy and we tried to make it a referendum on abortion, but you actually poured in more money than we did.

I mean, I don't have the exact post-election figures because some of this stuff just gets sorted out in the end run there. But the National Republican Campaign Committee spent more than a million dollars propping up Molinaro. And congressional leadership fund, which is of course the Republican house Republican super PAC spent another $650,000 at last glance. And of course, Molinaro himself raised a million and a half though that was less than the 2 million Ryan raised. The DTRIP, all they would say was that they made a six figure buy, which usually means $100,000 or $200,000, and both vets spent another $500,000 for him. So we're really looking at something like a two-to-one Republican advantage in the outside spending at the very least. So there's no question that they felt that this had high stakes, the Republicans. And I think they felt that because

after Kansas, after a relatively narrow win in a Southern Minnesota special election, and a seat that Trump carried heavily, though one that has been a little bit closer in congressional races, that there's this narrative developing that the great red wave might have crested a little too early, that Democrats are offsetting that red wave with this excitement and appeal to independence that the threat to abortion rights has created. And though I was not on the ground during early voting and election day, what I can say is I actually think Democrats have a real case here that abortion rights was an issue, was an issue in exciting the base and potentially even in getting independents over to their side because Mark Molinaro is not actually a far right guy.

I mean, period, but especially on abortion rights, he said that it's up to the states. He would not support any kind of federal restrictions. At least that's what he has said. He has said that on a personal level, he supports exceptions for incest, rape in the life of the mother, and that he sort of believes that it should be limited, but in a reasonable way, somewhere in the middle. But that said, it's just up to the states. And Pat Ryan was still able to say, still effectively able to polarize the race and say, this guy all that matters because this is the party that has said that they're against abortion rights and we're the party that says we're for it. There's another dynamic here, which is that since the pandemic, a lot of especially wealthier

residents of New York City have moved out to the Hudson Valley, two hours, sometimes three hours north. It's a very beautiful region, homes either in the mountains, the Catskills, or in the valley itself. And I have to think that that has had an impact on the electorate up there in towns like Woodstock, Kingston, Rhinebeck, Hudson, New York, Kinderhook. These are places where there has been an influx of people from at least closer to the New York City metropolitan area. You've got people who are able to work from home now, so they have more flexibility. They can move out a little further, a little better quality of life, maybe cheaper housing, but probably still very expensive. So, I mean, that makes a lot of sense. And the other thing here, you were pointing to that there have been a few special elections now, in addition to that Kansas ballot initiative that obviously swung hard for Democrats or for the pro

choice position, I should say, because I think there were some significant number, minority of Republicans who voted for the pro choice position there as well. But you had Nebraska won post-Obs. That was a Trump plus 11 district that the Republicans only won by five. You had Minnesota's first district that was a Trump plus 10 district and Republicans only won by four. So their margin significantly diminished. You had this one, which was a Biden plus 1.5. It looks like Pat Ryan is going to exceed that just by a little bit, not a whole lot, but outperform a little bit there. And then there was actually another special election yesterday in a much redder part of the state that Trump won by 11 and the Republican only won by seven. So you have kind

of a consistent trend. And then the other thing that was very interesting to me, Dan, is we're used to pollsters underestimating the Republican side of the ledger. So Republicans sort of outperforming where the polls are. We've now had a couple instances where actually Democrats have been outperforming what the polls are predicting. And this was a really clear example of that this special election. So I'm looking at a tweet from Polling USA and the polls leading up to this special election, there was Triton polling, had Molinaro plus 10, Data for Progress, which is actually a progressive pollster, Molinaro plus eight, PPP, Molinaro plus three, DCCC targeting, Molinaro plus three. And then ultimately, so every single poll leading up to this election had the Republican winning, and then the Democrat ends up winning. And, you know, it was fairly

close, but it wasn't so close that it's like going to a recount and that the result is ultimately in doubt here. So that's an interesting dynamic as well. Yeah, it certainly is. And I think it speaks to this question of turnout. I mean, I looked at the turnout in this New York 19th special election. I mean, it looked like something like 130 or 140,000 people showed up to vote in a late August special election. I mean, I don't think that there were really competitive primaries at the top of the ballot that those same people might have been showing up to vote in otherwise. I think that they managed to get the message out pretty effectively. And in terms of the polling, the only caveat I have to offer on that is that I do know I was familiar with like one or two of those polling figures. It does sort of look like it tightened over time. And so I wonder if the

trend line itself was accurate. I mean, yeah. Although I mean, that data for progress one came out literally on election day is when I saw that and it had all in our plus eight. But well, let's turn to some of the city districts. There was a lot of Dem on Dem violence in these primaries because you had, you know, the whole map is being redrawn. So you had incumbents versus incumbents. You had the Sean Patrick Maloney, the head of the DCCC, the Democratic Campaign Congressional Committee, sort of big footing another incumbent and pushing him out of his district. Let's start with one that was, I was actually quite shocked at how lopsided the result was. Carolyn Maloney and Jerry Nadler, and also a third candidate named

Suraj Patel, who has challenged Carolyn Maloney in the past. They were drawn together into this district that put the Upper East Side and the Upper West Side in one district together. And they're both longtime incumbents, you know, both like have been there a long time and both, you know, colleagues for years and years. And I think they both chair committees, right? So they're, you know, relatively senior in terms of Democratic Party leadership. And they were pitted against each other in this primary. Nadler just dominated. I mean, it ended up not being close at all. What did you think of that one, Dan? It was pretty interesting. I spoke to Nadler and Patel yesterday, though Maloney didn't make herself available to the press. And I got a chance to talk to some voters as well.

When you look at the dynamics of the race and who Nadler is and who Maloney is, I think Nadler just has a very, very clear and strong brand as sort of this lawyerly liberal. He's the chairman of the House Judiciary Committee, much like in the New York's 10th congressional district just below it, where the winner was a guy who was seen as sort of a Democratic Party hero vis-a-vis Trump. Jerry Nadler obviously was heavily involved in investigations against Trump in sort of the impeachment process. I also think that the Upper West Side and generally the West Side of Manhattan tends to be, has a higher voting rate than the Upper East Side and tends to be extremely politically engaged. It's a bit more

left-leaning. The Upper East Side used to be sort of a moderate Republican redoubt. They called it the Silk Stocking District. But now it's sort of just regular rank-and-file Democrats. But it leans just a bit more affluent, a bit more traditional, a bit more conservative. I know the Breaking Points producer, James Lynch, is from there. I'm sure he could confirm what I'm saying. So I think that's one dynamic. Another dynamic is that she had basically already shown that she just wasn't great at running a campaign because Patel had run against her twice before. And he actually, in a crowded field, held her to just a four-point win last time. He had hammered her for her sort of history of vaccine skepticism. She was somebody who had

amplified sort of saying, I'm having a just asking questions approach to the link between childhood vaccines and autism. She used her position in hearings to sort of give a platform to some of these folks. Patel had really initiated that and put that on the map last cycle as COVID vaccine was coming online. And then Nadler really took it to a new height by red boxing it and sort of a red box, obviously being the way that candidates signal to super PACs without directly communicating with them, saying voters need to know that Carolyn Maloney is a vaccine skeptic. And a super PAC did come in, spend a couple hundred grand blasting that out there. And then I think I think Nadler's selling point was I'm a good liberal. I oppose the Iraq war. She supported it. I supported the Iran nuclear deal, even though I'm Jewish and she's not. She opposed it. And and and and essentially saying that that he you know, he wanted to continue the progress that he had made, that he's this sort of fierce, lawyerly kind of opponent. If you look at her messaging, it was all, you can't send a man to do a woman's job, say no to the old boys club. And in the very end, it was really nasty. It was

like that Nadler's senile. Now, he did have some sort of infirm moments. Having been around Carolyn Maloney, I'm not sure if she's really in a position to make this case. Maybe someone could, but I'm not sure she's the one. That's right. Somebody actually said to me, it's the pot calling the kettle black there. So yeah, I mean, these are both 30-year veterans of Congress in their mid-70s. I do think this does raise, again, once again, issues of Democratic Party gerontocracy. But ultimately, it was an interesting one. And though Jerry Nadler is not sort of a hardcore left guy, I think that the sort of institutional left had rallied around him,

seeing him as the best alternative. Okay, so let's talk about the one that you referenced that included parts of lower Manhattan and Brooklyn, which was this relatively wide open primary. You have this guy named Dan Goldman. He's wealthy heir to the Levi Strauss fortune, will be one of the wealthiest members of Congress. Very sort of like, you know, standard issue resistance, liberal type of Democrat came to prominence because he was a lawyer on the first Trump impeachment and won the backing kind of controversially of the New York Times because he's close with the Salzburg and they didn't disclose that they had a conflict of interest. So they put their finger on the scale heavily in favor of Dan Goldman. And then you had a number of, you know, more progressive candidates also vying for this seat, including notably Mondaire Jones,

who was a squad member who was kind of big footed and pushed out of his district by Sean Patrick Maloney. I would call him squad adjacent. didn't really want to go up against Sean Patrick Maloney, which could have been a more interesting primary. So he jumps into this race. There was another progressive candidate, Carlina Rivera, is her name correct? So ultimately, Yulene New, who represents a part of this lower Manhattan district already in the state legislature, the race has not been called to my knowledge, right? It's still very, very close. The Associated Press did call it. They did call it. Okay.

But yeah. So it ended up being very close, which, you know, calls into question if Mondaire Jones had run for a different seat, if the left had been able to consolidate behind a single candidate, what Dan Goldman was able to get 20 some percent of the vote or something like that in this district. It seems like there was an opportunity here for a more left candidate that didn't come together thanks to the New York Times and also thanks to the inability of the left to consolidate around one candidate. Yeah, we saw this most

prominently in last year's New York City mayor's race, where there were essentially three contenders of one left-leaning flavor or another who took a long time to consolidate. I think we saw a similar effect, though, in the end, that when the progressive segment of the electorate sort of got a very clear message in the final days that this is the person you need to turn to. In that case, it was Maya Wiley. In this case, it's Yulene New. There was some consolidation effect, but the mere fact that there were so many candidates sort of laying claim to that lane in one form or another is absolutely an indictment of the progressive ecosystem in New York City, which, as we'll talk about later, has matured considerably in just four or five years time,

but is still really not quite capable of sort of laying down the law and reading the Riot Act to individual candidates. This was obviously a very difficult circumstance. The state legislature Democrats map was thrown out in late April. There was like sort of an initial indication of what the new court ordered map would look like in mid-May and then finally in late May, about a week after that, that there was sort of the final maps. And in that period, just of a few days between when there was sort of a draft leaked and when the final maps were released, there was a ton of behind the scenes jockeying, especially on the part of Mondaire Jones, who was figuring out not just whether he wanted to run against Sean Patrick

Maloney, whose home was drawn into Mondaire's district and Mondaire's home was drawn into Jamal Bowman's district. So this is in terms of residency. These things are complicated, though. Mondaire did represent a much larger share of the district. uh, Biden only carried the new district by about, by just over 10 points. He's, he's not a, uh, sort of, he wasn't comporting himself like a frontline member. He was more of a, uh, I mean, yeah. Ready to run a safe blue seat. Right. And how pathetic is that though, that you're afraid of a Biden plus 10 district. Sorry, but, and this was, I mean, this was Sean Patrick Maloney, too. The district that would have been logical for him to run in, which contained more of his current district, was what, Biden plus seven? And he's like, oh, this is too hard for me. I got to run in the Biden plus 10 district. And this is the guy who's supposed to be in charge of helping the Democrats keep the

House. And he's not even confident enough to win in a Biden plus six or seven district himself. He's got to go and jump into the Biden plus 10 district. Yeah, very, very bizarre. And certainly in that brief one week period where there was this jostling, he took a ton of heat for that. I mean, Richie Torres from the Bronx, again, who is, you know, maybe a mainstream liberal, but does not really have a relationship with the organized left, was hitting him very hard because Richie Torres and Mondaire are the first two openly gay Black members. And Sean Patrick Maloney is gay, but he's white and wealthy and moderate. It's hard to think, you know, what a counterfactual would look like where Mondaire Jones stays in this, sort of a path-breaking Black progressive. And does Maloney even say to that,

eh, actually, I'll go to New York 18th, the one that I'm currently holding? That's a possibility we'll never be able to know. I think certainly Mondaire's legacy on the left would be less tarnished. And there would be... he would at least have everybody rallying to his side against Patrick Maloney. And then as a frontliner, I mean, look, Katie Porter manages to do it. I mean, she walks a more careful line out in Orange County, California, but it is not absolutely unheard of. Well, Mondaire Jones hasn't been, I mean,

to my chagrin, he hasn't been the real like bomb thrower. He's tried to, in a lot of ways, kind of walk a more establishment friendly line. he's the freshman represent, he's the representative for the freshman class to democratic house leadership. And,

and I think that really tells you that he saw himself as being the guy in the room with Pelosi. But, you know, now I happen to think that that works in the suburbs. But yeah, it works in the suburbs. So stick in the suburbs. Right. And it turns out that New York City people are pretty damn parochial. I mean, I heard it a lot.

Like he says he was, you know, he likes the village because he's gay and it was important to him as a young person. That doesn't mean, you know, the village, you know, that doesn't mean that. People felt like he was kind of a carpetbagger, which he kind of was. I mean, I'm sympathetic to I was very sympathetic to him when Sean Patrick Filoni did this and really did this to both him and J'Paul Bowman and put both of them potentially in a difficult situation. I know Jabal Bowman, ultimately, he had a primary challenge that he was able to easily dispatch with. But, yeah, I mean, now you like sort of sold out the left when you were in Congress and then you screwed over the left in terms of winning this this lower Manhattan and Brooklyn seat. So I think there are going to be some reflections and some hard feelings there. And then on the other hand, the district that Sean Patrick Maloney did run in, he was challenged by someone who's considered kind of a progressive rising star, Alessandra Biagi,

who had taken out a longtime incumbent state senator who was aligned with that like break off Democratic group that was caucusing with the Republicans and keeping their majority in session. She was able to beat that person, I think, in 2018. So she's kind of a rising star, but not able to even come close to getting it done against Sean Patrick Maloney in this very suburban district, which is, you know, sort of like Clinton territory. She beat Bernie in this district. She and Bill actually live in this district in Chappaqua. So too many hurdles for Alessandra Biaggi to overcome there. And I know that's a race you were covering carefully, too, Dan.

Yeah, absolutely. I mean, this is a person who was endorsed by AOC. I mean, when AOC won in June 2018, the state legislative primaries were a couple months later in September, and that's when Cynthia Nixon ran against Cuomo as well. And at that point, this breakaway faction of eight state Senate Democrats had actually disbanded. Cuomo did it to sort of protect his left flank. He sort of said, OK, guys, enough of this shtick. I don't need you there anymore, sort of blocking progressive legislation. Now I'm running against the left challenger, got to quit it. But the Working Families Party and a lot of other folks on the

left basically said, we're not forgetting. And they ran eight candidates against these sort of ex-independent Democratic conference members, this rogue faction, and won six of those races. Hers was the highest profile. I mean, because the guy that she took on was the former leader of that group. He'd also been accused of forcibly kissing a staffer. And she beat that person out. The person had a much higher fundraising haul. And Biagi has an interesting trajectory.

I mean, she worked for the Hillary Clinton campaign in 2016, and then she worked for the Cuomo administration, and she became disillusioned because she learned about the IDC and all that. And subsequent to that, she really did become part of this new crop of hardcore progressives. I don't think she identifies as a socialist, but I think that she worked very closely with people like Julia Salazar, who is a socialist, to do things like strengthen tenant protections. One of the things that I did look at, I mean, you can't talk about this race without noting that Biagi had to move in order to or she did move to run there. She bought a very nice house in Bedford, New York, which is, again, of that sort of Chappaqua ilk. By the way, that Clintonian sort of nice Westchester area, that's the most democratic part of the district. So there are other counties by the river, go further up Putnam and part of

Dutchess. You start getting into even some Trumpy territory there. But she so she had that issue that she didn't have these ready made relationships. There were a ton of progressives who were early, early opponents of this rogue Democratic faction in the state Senate and early supporters of Mondaire Jones, including people who told me they would have supported Mondaire against Maloney. People like sort of State Senator Elijah Reikland-Melnick, Croton Mayor Brian Pugh. These are people who were basically overall progressive. They might be called more of the soft progressives than the sort of the hardcore progressives. And they basically said, we don't know her. We don't have a relationship with her. And they were nervous about her general election prospects. And one of the And they were nervous about her general election prospects. And one of the reasons they were nervous about that is two tweets she put out in sort of the aftermath of George Floyd's killing in 2021, essentially saying, what do we mean by defund

the police? Well, read this article. It wasn't like the most outright endorsement of the defund slogan, but it's there on the record. And then the bigger deal was that she posted a video of Philly cops engaging in an act of brutality against a woman in front of her child and said, the police in this country are soulless. You could see how, frankly, look, what we've seen citywide in New York City, I think that message would have a really hard time playing at this point in time with the uptick in crime and the backlash and things like that. I think it would do well in sort of the it would be fine in sort of the socialist redoubts of Northwest Queens and Northwest Brooklyn. And we can get into that when we talk about the socialists. But that's, I cannot think of a single instance of somebody with that kind of baggage, winning a general election in what is sort of a suburban, light blue.

In a potentially tough year as well. Well, I do want to talk about I think this is the last piece I want to talk about some of the socialist or socialist aligned victories, because I think this was the biggest bright spot, at least for the left, who, you know, there were some missed opportunities at the federal level. But in terms of the state legislature, quite actually a dominant showing from the DSA left in New York here. Yeah, we saw some folks sort of take over new districts. That would be people like Kristen Gonzalez in Northwest Queens. She happens to be an employee of American Express, but she is a total democratic socialist. And I think we'll join this crop that I think we could see getting close to 10 people who identify as democratic socialists in the New York state legislature.

And prior to 2018, it was zero. So and other people held their spots, people like Jabari Brisport in Brooklyn, who had a challenger. There were other progressives. Well, and I think it's important to note, Dan, that a lot of these folks, I know Jabari Brisport's opponent in particular, were backed by Mayor Adams. Adams to put his stamp on the legislature and push out some of the further left factions that he disagrees with and did not work out well for him, a kind of also demonstration of his political weakness right now. I think it is. I think what we've seen is that the power of the machine has gotten and sort of just general traditional patronage politics, whether in New York City or places

like Pittsburgh, I've covered that a lot, it has gotten a lot weaker at the local and state level where the kind of organizing that DSA does very effectively, door knocking, changing margin, being able to move margins of votes in the hundreds, right, rather than the thousands, remains really powerful. And perhaps also because at the state and local level, when it comes to issues like housing and protecting renters, rental protections, those are easier cells and you don't sort of get into the kind of federal realm of, oh, what does this person think about Trump or even the policing issues as much, which tend to be more local. So I should say maybe just at the state legislative level. I think that there was a really interesting race as well in the Bronx where

Gustavo Rivera went up again. He's a progressive, not a socialist, but very firmly aligned with those folks, went up against sort of a Bronx machine candidate, also endorsed by Adriano Espaillat, so who's the congressman from upper Manhattan and part of the South Bronx. And he defeated her, including in a district that now has the community of Riverdale, which is more affluent, also has a lot of pro-Israel voters. I think you did start to see some some outside groups with those pro-Israel leanings intervening there. Yeah, I mean, without getting into a case by case and going into all of the details, I know it does look like in central and south Brooklyn. One of these more sort of centrist Democratic candidates was able to hold on, though that person was an incumbent, Kevin Parker, is still heavily neighborhood and region dependent. Oakland and Northwest Queens along the water there, where a lot of the young people who live

there are just very left-leaning, sometimes because they've been priced out of Manhattan and have created these communities there, sometimes just because that's their ideology. And that's sort of where these seats have come up and been created. Obviously, we know that in Northwest Queens, AOC is the member of Congress, so that fits. In Northwest Brooklyn, it's Nydia Velasquez. And she obviously went hard for city councilwoman Carlina Rivera in the New York 10th primary. She's sort of viewed as one of the older generation of progressive, but not going to really stick her neck out against party leadership, if she does ultimately decide to retire or to, or frankly, if she sticks around too long, I think that's where people will have their eye on for a new sort of truly left-wing

member of Congress. Yeah. Well, I saw Ross Barkin, who's another friend of the show and also great New York City political observer pointing out that, you know, just a few years ago, you wouldn't laugh down in the room if you said the DSA endorsement was going to matter. So even though, you know, it's it's very small steps forward, the fact of the matter is they're sort of brick by brick building out a real political operation and a real political bench with established legislators who can then go on and run for those congressional seats and run for higher office. So a lot of very interesting results here. It's never dull. And extremely grateful to you, Dan, for helping us understand all of it.

Always happy to be here, Crystal. This was super in-depth and yeah, great time. Well, hopefully people got everything they needed to know out of the Florida and New York primary landscape and also what it might mean for the fall. Dan, great to see you and everybody out there. Thank you for watching. We're going to have more for you later. Hey, I'm Matt Stoller, author of Monopoly-focused newsletter, Big, and an antitrust policy analyst. So for today's big breakdown, I'm going to follow up on an earlier story I did in July, which is about why this summer has been so bad if you're trying to fly somewhere. Now, this is a little new for me. I'm doing an interview. I'm going to bring on the

nation's foremost expert in airlines and consumer rights, Bill McGee, who is a registered air dispatcher and knows the dirty secrets of the industry. So we're going to get into things like why airlines lie about the weather, why flights are really canceled, and how airlines treat VIPs. We're also going to do all the standard stuff, the regulatory structure and, you know, the industry and talk about Pete Buttigieg and whatnot. Now, the reason for this segment is simple, aside from the fact that this has been the summer of hell for airlines. I just got back from a trip, and Delta Airlines, yes, canceled my flight. There was some good news in that and some bad news. Ended up working out sort of for me,

and I'm going to talk about that in the interview. But the reality is I'm not alone. This weekend, in fact, was pretty bad overall. About 1,500 U.S. flights were canceled. Nearly another 8,400 were delayed. American Southwest and United were the hardest hit. 40% of Americans' flights were delayed, 40% of Southwest's. Now, my flight was at a JFK airport. In New York, the New York region was particularly hard hit. But it's been a bad year. It complains to the Department of Transportation up over 300% in April, 200% in May. We don't know the numbers

for this summer because those haven't come out yet, but it's almost certainly the worst travel summer in our lifetimes. Despite the frustrations of passengers, the Secretary of Transportation, Pete Buttigieg, has issued a record low number of aviation enforcement orders this year, which is to say, you know, just three. He's not regulating the industry particularly hard, even though it's just been kind of a nightmare. Now, for context, under Obama, there were, you know, in the about 50 aviation orders a year in the early part of his term, and then, you know, about 10, 15 in the later part of his term under Trump, it was around 10 a year. But under Buttigieg, it was four last year and three this year. So that's really bad. And

airlines actually have so little respect for their main regulator, Pete Buttigieg, that earlier this summer when he went to New York to talk to the airline CEOs about their poor service, they actually canceled his flight. And we're going to talk to Bill about what that means. So to talk about the situation, I'd like to welcome Bill McGee, who is a senior fellow for aviation for the American Economic Liberties Project. Now, that's actually the think tank that I work for in my day job. And he is also the author of the excellent book, Attention All Passengers, The Truth About the Airline Industry. You can find a link to that book in the description. Bill is fantastic. He is, you know, he's just so trustworthy and knows this industry backwards and forwards. So with that, I'd like to bring on Bill to have a conversation about my experience, about, you know, many of your experiences,

and the airline industry in general. Hey, Bill, it is great to talk to you. So we know each other, and we're actually colleagues, and I've known you for quite a while. And there's no one I trust more on airlines than you. But the audience doesn't know you, and I'm wearing a jacket, which means people trust me. And you're not wearing a jacket, which means you're completely untrustworthy. So tell the people out there why they should believe what you have to say. What's your background in the industry? Who are you? Should I wait for Matt to come in after this guy in the jacket leaves? How are we doing this? Hello, Matt. It's great to see you, as always. I make the jokes here. Oh,

sorry about that. I forgot the rules. Okay. You want to know my background? Okay. So I have been around this airline industry, in it, writing about it, advocating about it, working in it for 37 years, which is kind of frightening, since 1985. So I spent seven years working in the belly of the beast. I didn't work in marketing or corporate communications. I worked in flight operations. So when your flight was canceled, there was a good chance I was the guy that did it to you. But I had good reasons, trust me. So I'm happy to walk you through what I used to do and how airlines work. And I think, you know, it was a great, it was great training for me. For first, I became a journalist writing about the industry. And then I became an advocate,

advocating for passengers. And I have been inside it, as I said. And I think I know pretty much when the airlines are lying. And I know when they're saying things that are half-truths. And I know when they're mistreating us. And unfortunately, these days, they're mistreating us quite a bit. Okay, so this summer's been really bad. So why are things like so bad? Is it unusual? Um, and just like, how bad is it? Just, just a quick context. Uh, there's no

question in my mind that this is the worst airline for customer service in the history of the U.S. airline industry. Oh, shit. Sorry. Worst airline. I said, I meant worst summer. Sorry. Um, there's no question in my mind that this is the worst summer for customer service in the history of the U.S. airline industry in the entire 108-year history since 1914. I've spoken to many old-timers who worked in the industry much longer than me, and I asked them all, have you ever seen anything like this? And they have said no. And I think it's not just opinion. I think it can be documented. We've never seen the level of flight cancellations and flight disruptions, as the industry calls it, extended delays that we've seen this summer. But worse than that, we've never seen so many cancellations that took place at the last minute. And that's the part that's absolutely unforgivable. And that's what's inexcusable on the part of the airlines. And that's what's inexcusable on the part of Secretary Buttigieg at the DOT for allowing it to happen. Okay, so now I've been – I write about this, talk about this, and one of the things that I hear is – and actually, I just had a flight canceled, as you know.

And one of the things you hear is weather, right? There are staffing shortages and weather. And a lot of times people are like, well, what do you expect? You know, the airlines can't control the weather and, you know, or Secretary Buttigieg can't control the weather. This is just a thing that happens. So is, you know, walk me through, walk us through how airlines interact with the weather, whether that's a real excuse and how that all works. Sure. So this is what I used to do for a living.

I'm licensed by the Federal Aviation Administration as an aircraft dispatcher. That meant I worked for an airline. I created the flight plans. And in real time, on a 10-hour shift, I would talk to the airplanes, get them through their flights, talk to air traffic control, make sure everything went well, and then troubleshoot when there were problems. And I can tell you, I know all about weather. I had to go through a six-month training course. I had more meteorology training than commercial pilots. That's how the FAA requires for dispatchers

because we have to flight plan through all the weather. I know about thunderstorms. I know about blizzards. And my nickname when I worked in airline flight operations was BC McGee. It didn't stand for Bill. It stood for Black Cloud McGee because I was notorious for bringing bad weather with me. If I had three days off, everything was golden. And then as soon as I came back, the thunderstorms would start or the blizzards would start. And people hated working with me. They would reassign themselves. So what I used to have to do was cancel flights at the last minute because of weather, because of air traffic control. And look, that's a factor. It's always been a factor. I don't know that technology will ever get to a point where commercial aviation will not be affected by

weather and air traffic control issues. We may someday. We're certainly not there now. But that is not what we're talking about in the big picture in 2022. I can't stress this enough. The airlines have been saying for months, every time they have reporters ask them about these massive cancellations, and we are talking tens of thousands of flights have been canceled just since Memorial Day. And they are saying weather and air traffic control, are those factors?

Sure, they're always going to be factors. I mean, here's a newsflash. There are thunderstorms in Texas in the summer, right, where there are several hubs in Dallas and Houston, right? There's snow in Chicago in January. Good airlines know how to deal with these situations and they work around them and they treat their customers well. What we are seeing is a complete meltdown. We're seeing that airlines are, A, not being truthful in blaming weather for conditions that obviously it's not about weather and it's not about air traffic control. I mean, let's talk about that.

So you're saying that when you hear your flight's canceled because of weather, the airline may not be telling the truth. Is that what you're saying? There's no question. There's no question. There is a problem here. You know, the Department of Transportation compiles statistics every month on airline flight delays, flight cancellations, all kinds of things. But let's remember, this is a self-reporting system. When I worked in the airlines, I can tell you for a fact that airlines fudge numbers on delays, and it's hard to fudge cancellations, but on delays. And they certainly fudge causes of

delays. Now, why is that important? It's not just a matter of truthfulness. You want to know why your flight was canceled. If you're told by an airline that it's due to weather in the United States, that is a big deal. Why is your flight delayed due to weather? Because if you look at what the airlines call a contract of carriage, what they will do for you in terms of compensation and in terms of accommodations is directly related to what the cause of the delay is. So in other words, a weather delay is what the airlines call a force majeure or an act of God. And therefore, they usually wipe their hands of any kind of meals or hotels or any kind of accommodations for you. Now, the one rule the DOT has is if the flight is canceled for any reason, then you're entitled to a refund. So what we have here- Well, that's what happened to me. I mean,

the flight, they said it was weather and therefore they were like, well, you have to stay overnight, but we don't have to take care of the hotel for you. And that was because it was a weather delay. And I don't know if it was a weather delay or not. My people I know in New York said the weather was basically fine, but I'm not a meteorologist or anything. But that was in the contract of carriage. It said, okay, you are entitled to a hotel voucher unless it's a weather issue. So you're saying that they're misleading people about the reason for the delay so that they don't have to pay for meals in hotels and things like that. So if you're a consumer, what should you do if you have a flight canceled? Should you complain

to the DOT? What can you do? You can't do much, but it is important to do what you can, because unfortunately, this is the Wild West in the United States. Unlike the European Union, where there are strict regulations on how passengers have to be treated during delays and cancellations, and if they're involuntarily bumped, here in the United States, we are dependent on the airlines themselves. So they have these contracts of carriage, which lawyers call contracts of adhesion, because they're one-sided. They're written by and for the airlines. And you're agreeing to them. And I've had people say to me, I didn't agree to it. Yeah, you did. When you swiped your credit card and you bought a ticket, you agreed to what could be a 200-page document. Contracts of carriage are a mess. They're one-sided. They are written in the airline's behalf and not in your behalf. They're

filled with legalese. And worst of all, they have what I call mushy language. They have terms in there. They'll say, well, we may do this. I mean, any lawyer will tell you a contract with the word may doesn't mean much. So it says, if your flight is delayed extensively for four hours or more, we may give you a hotel. What good is that? What does may mean? It's because the dirty little secret of the airline industry is this isn't America. We're not all created equal as far as the airlines go.

Each passenger on that plane has a different value based on all kinds of algorithms that we don't even know half of it probably, because they are tracking how we booked, when we booked, where we booked, how much we paid, how often we booked, how often we're on that airline. And then they have this computer-driven algorithm. So if you and I are sitting right next to each other in economy class and our flight is canceled, you might very well wind up with a meal in a hotel and I might sleep on the airport floor. I mean, so we go, you know, I want to tell you a little bit about what happened to me. And there's actually sort of some interesting good news here, like about, so where our flight was canceled and eventually we were able to get a new flight the next day.

And I complained to Delta directly. I said, you wouldn't cover a hotel voucher. And if you don't make this right, then, and I pointed to the contract of carriage, I said, I'm going to file a complaint with the Department of Transportation. And pretty quickly, like within four or five hours, I actually got an email back saying, okay, here's the, you know, I sent them a receipt with the hotel, you know, and they gave me a refund. And the other thing that happened is we sat on the tarmac for three hours or so, and they immediately, like, emailed afterwards and said, oh, here's $50 or something like that as an apology. And there's a tarmac rule, right, the DOT came out with. So when you complain, when you actually just say, we are going to file a complaint with the Department of Transportation,

it does seem like you can get some response, right? I mean, is that wrong? Or like, what happened there? I would say that you're very lucky. At times, it works. I'll be honest with you. I think the most effective way to ever get a response from an airline these days is to shame them on social media. Statistically, that's what I've seen moves the needle the most. If you were to have gone on Twitter and detailed what happened to you and had, you know, prior to contacting Delta directly, if you had done that and tagged Delta, you would very likely in a very short time, they monitor it all the time when they see their names tagged, you might have had a response from Delta saying, oh, we're sorry to hear about this.

Please contact us directly at such and such. You were lucky, quite frankly, because an awful lot of people have done the same thing that you have done, and they have not gotten their hotel bill compensated. Okay, so let's talk about the regulatory structure of the industry, because that's what's sort of interesting. So you've got Pete Buttigieg as the Secretary of Transportation. What authority does the DOT have, and how is Secretary Buttigieg doing? He's not doing well at all, And unfortunately, he's in a long line of very passive DOT secretaries. But to start with, what can the DOT do actually here?

Sure. The DOT has broader powers than it would have you assume if you hear Secretary Buttigieg's interviews with the media. The fact is there is something called an unfair and deceptive practices rule, which gives him very broad powers to act. Now, much of the grief that we've seen this summer with extensive delays, with cancellations, with refunds not being paid, that is either unfair or deceptive or both in most cases. So the secretary could be doing much more. Instead, he is choosing to start rulemakings, which are very lengthy, can take two to three years at minimum, and they are not retroactive in most cases. And it's kicking the can down the road is what it is. So we have been very critical of Secretary Buttigieg because he could be doing a lot more. This industry is in crisis and he keeps meeting with airlines and doing media interviews saying, well, I'm urging them

to do better. Urging isn't enough. So, you know, what's interesting is he met with the airlines, and then when he was trying to fly back from his meeting, his flight was canceled, right? Now, what does that say? I mean, do you think that the airlines knew that they were canceling, you know, the flight of the Secretary of Transportation, or do you think that the airlines knew that they were canceling, you know, the flight of the Secretary of Transportation, or do you think that was just random? There's no question they know when the Secretary of Transportation is on their flight. I can guarantee you that. I am speaking about technology that was 30 years old. When I worked in the industry, we had reservation systems that weren't nearly as sophisticated as they are now,

and we knew every time there was a VIP. And I worked for an airline that operated a shuttle between New York and Washington. So VIPs were a daily thing. I mean, I saw ex-presidents, ex-first ladies, you know, sitting congressmen, senators, you name it. And they got treated differently than like you and me. Well, let's say, yes, that is a fact. There's no question about that. But I'm going to take it in a different direction. Their flight got treated differently, okay? Okay.

And when we're talking about the Secretary of Transportation, there is no one in this country that will tell me that the airline that canceled his flight was not aware he was on that flight 24 hours after he spoke to them. Now, what does that mean? There is a flag on a flight. Now, when I worked in dispatch and when I was dispatching flights and I had to make tough decisions on bad weather days and cancel flights and consolidate flights, we knew, we were aware of what VIPs were on what flight. So let's say there was a VIP on gate number three and the plane on gate three had a mechanical issue and the mechanic said it's going to take four hours to fix. We would steal the plane from gate four and cancel that flight or delay that flight. And that's how we would operate it to protect the VIP. This goes on every day. Now, sometimes you can't protect the VIP and sometimes things are just so bad that, you know, it's overwhelming and you wind up canceling a whole bunch of flights. But I will guarantee you, in answer to your question, they were fully aware that the Secretary of State was booked on that flight.

That's interesting. So members of Congress, the political elites are kind of insulated a little bit from the chaos because of – it's a smart political strategy, I imagine, from the airlines to try to do that. But in this case, they were just – was this like a middle finger to Buttigieg? Or what does it mean to say, okay, we're just going to cancel your flight? I've spoken to people in the industry who have said that. Yes, I mean, I can't confirm it, but they have said to me that, you know,

is it coincidence that 24 hours after he asked them to do better, his own flight was canceled, of all people. Now, I will also say, you know, you mentioned isolation, like, you know, members of Congress, et cetera, may be a little isolated. I'll say this. I think this summer is extraordinary in a lot of ways. And one way is I've been seeing an awful lot of comments on social media from members of Congress who have had their flights extensively delayed and canceled. And that is something that you don't see in large numbers. I really think, quite frankly, it has to do with the arrogance of this industry. I think they believe, honestly,

that they are above reproach. I mean, they don't fear Secretary Buttigieg. They don't fear the DOT. Do they fear Congress? I don't know. But it certainly seems like they're just acting with impunity. Well, what's the sort of, okay, so last question, like what's the right policy solution? Like if you're going to, you know, this industry is not particularly profitable. I mean, it goes up and down, right? It's not, you know, it's consolidated. Like actually before we get to the sort of the right policy solution, like, you know, what you could do in a lot of other places is if you don't like one company's goods,

you can buy someone else's. But this industry, it's pretty consolidated. Can you talk about that? What happened to consolidate the industry? How bad is that? It's the worst it's ever been. We have fewer competitors in the airline industry in 2022 than we have had at any time since 1914 when the industry was founded. There are fewer airlines, there are fewer major airlines, that is, airlines that generate more than a billion dollars a year in revenues. And the consolidation has never been greater. The four largest airlines in this country, American, Delta, United, and Southwest,

collectively, with their partners, their regional partners, as they call them, command about 85% of the market share. Historically, all through the 20th century, no U.S. airline had more than 10, 11, 12% at most. So we have fewer competitors. We have greater concentration. We also have had the longest dearth of new entrant airlines. We just went through a 14-year spell from 2007 to 2021

without a single new entrant airline, which is the exact opposite of what deregulation was supposed to do in 1978. One of the central promises of deregulation was that the floodgates would open and there would be all these new entrants that would make life better for all of us. It happened for a while until most of them were driven into bankruptcy or consolidated. So we have a level of consolidation we've never seen. And there's no question anymore that the industry is too big to fail. Every time there's a problem and the bailouts are rolled out, we know that it is too big to fail.

Some of us were predicting this 10 and 12 years ago when we were testifying against mergers, United Continental, Delta Northwest. But we're already at that point. I would argue that we're not only at too big to fail, we're now at a too big to care attitude. Right. I mean, if you get canceling flights of political elites, then you really are just, you're like, okay, what are you going to do? That's what's happening at this point. And I have a pet theory about this. One of the problems about this industry in the United States is overwhelmingly, obviously, most lawmakers, most regulators, most media are concentrated in cities like Washington and New York, maybe Los Angeles, Chicago. And they're anomalies, actually.

Much of this country is actually has so little competition. There are no low fare carriers. There are no Spirit or Allegiant or Frontier in so many areas of this country. You may not like some of those airlines for their service, but they're helping you if you're flying on their routes, because even if you're flying on another airline, they bring fares down. And when they leave, fares go up, right? So you don't have low fare carriers. You don't have hubs. You don't have frequency of flights. And we're talking huge sections of this country. Deregulation has failed in many,

many ways. But, you know, when I speak to reporters and let's say they're in New York or Washington, they say, what are you talking about? I just got a $200 fare to Florida. Sure, on Spirit Airlines, because, you know, you're in a market that has that. Much of the country, they're paying three or four or five times as much. Right. And so, okay, so deregulation did a number of things. Before 1978, we had a government agency that just set prices and routes, right, and just said, if you want to fly from New York to LA, you also have to fly from Cleveland to Tampa, right, So they didn't have an incentive to undermine people's consumer experience because they were going to make a reasonable return regardless of what they did. But deregulation, among other things, it made it, like, it basically, you know, what did it actually do to the industry in terms of consumer protection, right, that makes airlines unusual vis-a-vis every other industry in the country? Well, part of the Deregulation Act in 1978, this is 44 years ago now, was a clause dealing with federal preemption.

And what that means simply is that only the federal government will have oversight over this industry. And I don't know if they anticipated in 78 how pervasive that would be, but for the last 44 years, it's been extremely pervasive. And what I mean by that is state courts have virtually no authority over airlines. And anytime you file a suit, as you do with any other industry, any other corporation,

you've been wronged and you file a suit in state court or a class action suit in state court, it will automatically, automatically rubber stamp be thrown out of court by a class action suit in state court, it will automatically, automatically rubber stamp be thrown out of court by a federal court because the airlines will cite federal preemption. Same with state AGs, same with state legislatures. So the only, the only recourse that you have is the Department of Transportation, which is institutionally promoting the airline industry. Whereas every other industry, you can actually sue individually or a state attorney general can bring a case. I mean, we have a huge monopoly

problem everywhere, so it's not like there's a lot of consumer rights in a lot of these other industries. But you actually literally can't sue if an airline wronged you. And even your state attorney general or state officials can't do anything about it. The only one that can is the Department of Transportation. Is that right? That's exactly right. And from a consumer perspective, it blows people's minds when I say to them, do you understand you have fewer rights dealing with an airline than you have with virtually any other company in America? So what's the short-term policy solution here and the long-term policy solution? Sure. The short-term policy solution

is to eliminate federal preemption because it's clear that the Department of Transportation, as you mentioned, it's baked into the DOT's DNA that they promote the industry. I know this for a fact. I have spoken to dozens and dozens of whistleblowers over the years at the DOT, at the DOT's subsidiary agency, the Federal Aviation Administration. I wrote a book, Attention All Passengers, and it details this. And they will tell me that, you know, an FAA inspector will go out, find a mechanical problem on an aircraft, ground the aircraft and tell them, you know, you can't fly this airplane until you fix it. And by the time that inspector gets back to their office,

their boss is waiting for them and says, hey, I got a call from the CEO of the airline. It's hard to even fathom how institutionally it's baked into the FAA and the DOT that the interests of airlines so often come before the interests of consumers. So it's a regulatory agency that does not work. It is the textbook captured agency. So I agree with that, but there's a broader problem here, which is that the industry is

structurally designed to become unprofitable at certain points. It's like a very boom-bust cyclical industry. It's not like Google, which makes a ton of money, or a lot of these other companies that just make a ton of money. The airlines, they make a lot of money in good times, but they lose a ton of money, or a lot of these other companies that just make a ton of money. Like the airlines, you know, they make a lot of money in good times, but they lose a ton of money in bad times because there are very high fixed costs. And so part of what's going on is, you know, the old system kind of guaranteed them a reasonable return on their capital. And the new system says, you have to squeeze to grab everything you can to prepare for the bad times. And then in bad times,

you know, get a bailout. But this is endemic to any sort of industry like this. It happens with railroads. It happens with shipping. It happens with trucking in some ways. Like, it's a characteristic of these industries. So, the consumer problem, the regulatory scheme that we have that squeezes consumers is actually driven by the characteristics of a deregulated industry. I mean, that's kind of my view of it. I don't know if that's something that you agree with or disagree with. But that's like why it's getting, you know, why the squeeze is happening. You know, it's being driven by the rules that we've written writ broadly.

No question. I mean, the bottom line is airlines are a utility. Okay. No question. I mean, the bottom line is airlines are a utility. No different than a cable company, than a phone company, than the other utilities that we all depend on. But the problem is it's a utility that is operated as a for-profit, free market industry. So therefore, the decisions that make sense to CEOs, they make sense to them. I'm not saying that they're nonsensical. If I'm an airline CEO, I'm saying, well, why fly that route? It's not as lucrative as flying this other route.

So we'll pull all our planes and our crews and we'll shut down there and we'll operate here where we can make more money. Well, that is not how you operate a transportation system. That is not how highways work. Because that like kills that other city, right? Absolutely. The effects are egregious. I mean, we are talking about, it's not just, you know, that, oh, you don't have as many flight frequencies to get to Disney World. We're saying that corporations will pack up and move out. Corporations can't have sales staff connecting two or three times a day on every flight. It's just, it's so wasteful. They have actually moved out of cities. I mean, you talk to St. Louis, Pittsburgh, Cleveland,

Cincinnati, Raleigh, cities that once had very robust hubs. What does a hub mean? It means that you're going to have a ton of flights all day long. You're going to have multiple non-stops to multiple destinations. You're going to have flight frequencies. In other words, there's five flights a day from Pittsburgh to wherever. And now it's down to one a day or two a day, or maybe no non-stops, and you have to go to Chicago or Atlanta. So this is contributing to a whole host of problems. It's not just like air flights are being canceled.

It's also killing entire regions economically. Okay, so the short-term solution, if I'm getting it sort of right, is to get rid of that shield, to a liability shield, like that subsidy for the airlines that lets them harm consumers and make some extra money that way. And let them compete like every other industry does. Right, so you get rights as a consumer you can sue, and state AGs can sue. But then long term, we have this problem where we actually have to find a way

to regulate the industry like a public utility as it was prior to 1978. Is that? No question. No question. That's my belief. I mean, I think that when you add up all the pluses and minuses, and I would not say that it's all minuses by any means, but when you add up all the pluses and minuses of deregulation, it has been a failure and it has failed all of us. It's failed labor. It's failed consumers. It's failed cities and regions. Okay. So I'm going to end it here, but in the description, I'm going to put a link to the Department of Transportation complaint page. If you have a problem, you should complain. This does embarrass the airlines and it may get you some help. And then also you should write your member of Congress and say you want investigation, something to do with the airlines. This is not an insolvable situation.

Flight is amazing as a technology, and it's incredible that we have it. So I'm optimistic because I think this summer is giving us the, you know, the impetus to actually start doing something about this. And I guess I'll leave it there. Bill, what do you think? I mean, in your 37 years in the industry, have you, do you think this is kind of like a turning point, this sort of summer of 2022, the summer of hell? Well, as you know, I've been busy since I got here.

I mean, since Memorial Day, I've barely been able to catch my breath. But I do think that there's an optimistic side to all this. I completely agree with you. I have never seen the level of anger and I've never seen anecdotally so many people, my phone blows up every day, people that have nothing to do with airlines or aviation that are texting me and saying, hey, guess what happened to my daughter? Hey, guess what happened to my husband? Whatever. And what can we do? We're stranded in Denver and all of this stuff and the cancellations. And I think that we really should step back and say, this is not an anomaly. 2022, we could have predicted this years ago. This is a convergence of a whole bunch of factors. The airlines have raised cost cutting

to a point where they are operating in a safe way. I don't mean in a safety way. In such a way that they're at peak capacity 24-7. And so when something goes wrong, it goes very wrong very quickly. When I was a dispatcher, if I canceled a flight, the loads were about 70% on average. So for every seven passengers, there were three empty seats. What did I do? We put those passengers on the next two or three flights, and then things got straightened out in a few hours. How do you do that when loads are what they are now? The highest they've been since World War II when airlines were troop carriers. They're in the high 90s now on many routes. So if something goes wrong, unfortunately, you're screwed. I mean, that's why people are sleeping on airport floors. There are no spare

aircraft. There are no spare crews. They can't even operate the flights they schedule. So the system itself is just, it's at breaking point all the time. So I hope that the lessons that we're learning this summer can really manifest themselves in lasting change. All right. Well, listen, thanks a lot for coming on and giving us your perspective. And yeah, I trust you. I believe what you're saying, even though you're not wearing a jacket. And that's how convincing you are. So thanks a lot, Bill. Thank you. Thanks for watching this big breakdown on the Breaking Points channel. That was fantastic, Bill. Really enjoyed it. If you'd like to know more about big business and how our economy really works, you can sign up below for my market power-focused

newsletter, Big, in the description. Thanks, and have a good one. Hi, I'm Maximilian Alvarez. I'm the editor-in-chief of The Real News Network and host of the podcast Working People, and this is the art of class war on breaking points. Esteban Chavez Jr., aka Lil Stevie, turned 24 on June 24th of this year. He was young. He worked hard. He was a diehard Dodgers fan, and his family, who looked like they could be part of my family, loved him dearly. One day after his birthday, on June 25th, in Pasadena, California, on a day when temperatures reached into the high 90s, Esteban died alone, his body cooking inside a metal hotbox on wheels with no air conditioning. Esteban was a UPS driver and package deliverer.

He died on the job. Esteban's family are still waiting for the official report on his cause of death, but they, along with Esteban's Teamster union siblings and fellow UPS workers, have clearly pointed the finger at the unbearable heat, the grueling workloads, and the lack of safety provisions for drivers working in that heat. Because the tragic loss of this young man's life was not some freak accident. The U.S. and most of the world have been pummeled by record-breaking heat waves, as climate catastrophe has us all watching life-sustaining waterways in Europe and China and the American Southwest literally drying up in real time. And UPS workers and all letter

carriers and package deliverers around the U.S. have continued raising the alarm about their dangerous working conditions and the hazards the heat inside and outside of their trucks poses to them, to others on the road, and to our economy, which simply cannot function without them and the vital work that they do. After Lil Stevie's death in June, I began working on putting together a panel discussion of fellow UPS drivers to address this very issue, which we actually just published this week on my podcast, Working People. And I was going to feature clips from that panel in a larger segment this week, focusing on the horrible heat conditions that workers across America are facing in the transportation and logistics industry, in the farming industry, in construction and elsewhere. However, as you guys know, earlier this week on Breaking Points, The Great Crystal Ball published an excellent and spot-on breakdown of the heating crisis that UPS workers specifically are dealing with right now. about their lives, jobs, dreams, and struggles, there are hardly any media organizations

where I would ever have to worry about a story like this being covered by me and a colleague at the same time. I think it's really a testament to what Breaking Points and Crystal are doing that I now have the opportunity to build on and compliment her crucial report with this segment. So here's what we're going to do. First things first, if you haven't already, go watch Crystal's segment

because it provides essential context for the clips that you're about to hear. Secondly, since we just released my conversation with three UPS workers on Working People, I'm going to spend the rest of this segment playing some clips from that episode. And lastly, I'm going to be back to record part two of this segment, where we'll talk in more depth about heat as a workplace hazard, the workers it's affecting in other industries, how it's affecting them, and what can be done about it. So for now, for all of us who depend on the people delivering stuff to our doors every day, if you want to know what they're going through right now, listen to UPS drivers and Teamsters Gabriella, Zach, and Steve.

Here's Gabriella from the Southwest. People need to understand that UPS, especially package delivery, is a different job than any job that you've probably ever done. I talked to some of my friends and they can stop working and look at their phone for five minutes, sometimes 20 minutes even like one minute at ups in package delivery you cannot stop for longer you like you really can't stop period um but no worker no no delivery driver is ever going to stop for longer than like one minute because we have over 200 sensors inside the engine of our truck that tracks us. We're starting to get cameras inside the cab of our trucks that track us. Management is sitting in their AC offices,

watching every single thing that you do. You're trained in the 340 methods, which is 340 different things to describe your job, exactly how you're supposed to do it. I mean, if we were in person, I could show you, we could all show you like exactly the methods for like how to pick up a box, how to walk up to the house, how to get in your truck, how to pull away from a curb. It's extreme, you know, like it's a very high stress job. And there are so many rules. And they if you uh you know if you start to you know care about your safety uh you know and like they will they they'll do like liability right like they'll act like they care about your safety they'll tell you to drink water they'll

tell you all this stuff blah blah blah um but at the end of the day like the way that this job functions does not work for human beings. Working in 107 degree heat does not work, like does not work for human beings. Working in a truck that does not have AC or ventilation in the back where it gets to over 130 degrees doesn't work for human beings. And not being able to stop. I mean, I know they will say like, you can stop if you're really hot, you know, like take a break. But like, you know, that the next day that they're going to harass you and ask you, um, you know, why did you stop? And you say like, Oh, you know, I was feeling really hot and you know, like you legally have the right to stop working in unsafe working conditions.

Um, so if you need to take a break from the heat, then you're allowed to do that. Um, but then they're going to try to push you to like clock out for your lunch or like clock out for your break so like that's what it's like working for ups and it's insane sometimes people go out with you know about 300 stops it's not uncommon to have that high amount of stops uh my route would go out with 200 uh after the pandemic they really slammed my route with even more stops than I could handle. And then that would have like 200 stops. That's not 200 packages total. It's like about 260 packages because some houses have multiple packages. And when you look inside the truck, if you ever have the great pleasure to look inside the inside of a UPS truck in the morning,

it is packed front to back don't do it there is no way to walk through it it is packed all the way to the ceiling it's bad um it's real bad and then um so when you're when you have that many packages inside of your truck naturally you're not going to be able to find them um immediately so you're actually going to spend a lot of time in the back of the truck. When it is 130 degrees in the back of the truck, there's no airflow. You're back there. You're trying really... There would be times where I was trying very hard to find the package. I would be back there for maybe 45 seconds. And I had to tell myself, I cannot be back here because if I pass out in the back of this truck, nobody's going to find me. Nobody's going to come up to me. No one's going to look inside my package car to find out if I'm okay. It's

probably going to take a few hours for management to even figure out if anything went wrong. My best hope would be that somebody wanted to rob the package car and came in and saw that I was back there. They just decided to walk in. It's really dangerous. So there's that. My best friend actually at work, he was trying to pass the probation period at UPS. And just the standard that they had him in, or the standards that they have them at to get past what we call packet, the probation period for new drivers. It's just ridiculous, especially in the summer heat. And he actually ended up throwing up outside of a hospital. And I believe his wife was outside of the hospital with him. He was on the job and he was feeling so sick.

Like there was something very, very wrong. In management, I came and met him outside of the hospital, outside of the ER. And he was like throwing up. And they told him, please, they're like, don't go in the ER. Don't go in the ER. Like, we'll take you to the, we'll take you to Conra the um the work doctor um i've been to that work doctor we all have stories about the work doctor it's uh a complete bullshit doctor that does not help you

um he's his wife like laid down the line and so he and he was like no we're gonna go in this hospital we think that he needs to go in this hospital um they went in there he was suffering from kidney failure um and he was hospitalized overnight. And here's Zach, a driver and union shop steward from Oklahoma, giving his perspective on working in the heat, on what you and others can do to help workers right now, and on the massive contract fight that's coming next year between UPS and the Teamsters. We've got to do something. We've got to do something all over this country because there

is a combination of the heat going up and the humidity going up. It's just, it's, people are getting heat cramps, they're getting heat exhaustion, they're getting heat stroke, and they're dying out there. And we're going to see more and more of it as the climate catastrophe gets worse. It's already happening. There are practical things that the company can do to invest in their workers, to invest in the infrastructure. They can put air conditioning in their buildings. They can put roof-mounted air conditioning or exhaust vents in the back of the package cars to draw that humid, hot air out. They're all RVs. They exist. People have a need for this stuff already and there are solutions for it

already. And the money is already there. So do we invest in stock buybacks? Or do we invest in the core thing that makes our company profitable? The company has a decision to make. Carol Tomey and the people who are on the board, they have a decision to make. And our customers, when they have a choice of who is shipping their stuff, they have a decision to make too. And I want them to make that decision with all of the information. And so that's why this podcast is really important because they may not have all the information. That's the assumption I'm going to make.

I'm going to tell you it's hot and people are dying and you can do something about it. So there's the information. Please do something about it. Please. We need you to. We're we're we're in your neighborhoods we're in your communities we're delivering to your schools we're delivering to your pharmacies we bring you your food we bring you your medicine we bring you your wine so you can have brunch

i love brunch you know there's nothing wrong with brunch so like um if if you were getting packages that are too hot to touch think about it that has been in the pack of a package car for maybe 10 hours so have i so as steve so as gabriella and you. And there are 330,000 teamsters at UPS. We're sick of it. We're done with this stuff. It's not okay. We're over it. And so we're looking for victory in 2023. Nothing works without your workers. None of this works. None of your stuff gets delivered. None of this happens without the workers. We do the work. And so you can choose to invest in stock buybacks,

or you can choose to invest in the infrastructure that brings all of this money, that really moves our economy forward. I think that Teamsters drive this economy through our trucking, through our rail, through our ports. Our folks work really hard at all this stuff. If you want to take care of your workers who are out, what our customers can do, like Gabriella said, is provide us water. Give us water. I've got a cooler out on my front porch right now with water and snacks and electrolytes. That stuff's important, but it is not enough. And so that's why if you are a customer, if you rely on these services to bring you your stuff, please reach out. Please send an email.

Please let the company know how important it is that they take care of the workers who deliver all your stuff. Let them know. And then let the Teamsters know, you know, reach out to our unions, to our international, to Sean O'Brien, to Fred Zuckerman, to the guys on our executive board. Reach out to your local

and ask what you can do to help out because your local, they have stuff. There are places that you can plug in right now to make a difference in your community. So reach out to your local. And if they don't seem to know what's going on yet, you do because you listen to this podcast. So make a plan and suggest it see what you can do to help out because this is something that affects every single person in this country and because we're a global system because we're a global economy it really affects everybody and because we're affected all by the current climate catastrophe it really does affect all of us.

So we have the largest private sector contract in the entire country. This company and this union have the opportunity to set the path going forward. Will they take it? I really hope they do. You think this was a hot labor summer? Just wait until 2023.

Workers like Zach and Gabriella and Steve and their union siblings aren't messing around. As new Teamsters president Sean O'Brien recently put it to a crowd at a workers rally in Boston. The message that I got today for all these scumbag CEOs, for all these corruptible politicians, these white collar crime syndicates, you fuck with us, we fuck with you. It's a full context point. Thank you for watching this segment with breaking points and be sure to subscribe to my news outlet, The Real News, with links in the description. See you soon for the next edition of The Art of Class War. Take care of yourselves. Take care of each other. Solidarity forever.

Hey there, my name is James Lee. Welcome to another segment of 5149 on Breaking Points, where we dive into different topics at the intersection of business, politics, and society. And today I want to talk about stock buybacks, otherwise known as share repurchases. We hear a lot about it, so I want to take a few minutes today to dive deep into what it is, the common talking points, separating fact from fiction, recent policy changes, and the prolonged impact stock buybacks have on not only the individual companies engaging in that practice, but also on the overall health of the economy and society in general. The debate around stock buybacks has to do with how companies use their cash.

They have access to quite a bit of it right now. The tax cuts in 2017, relatively high earnings, and low interest rates have all added to corporate cash stockpiles. When a company is flush, it has options for what to do with its money. It can buy other companies. It can spend on research and development. It can buy new equipment, buildings, or technologies. Or it can return money to shareholders. This can take the form of dividends or stock buybacks.

In the past 10 years, the top 20 companies on the S&P 500 bought back about $1.3 trillion in shares, with Apple leading the way by far. In a stock buyback, a company purchases its own shares from shareholders and it takes them off the market, leaving fewer shares outstanding. This changes the math on the remaining shares in a key way. It boosts a metric called earnings per share, or EPS. The most basic equation for EPS is the company's net income divided by the number of outstanding shares. So when this number shrinks, the EPS rises. So if a company has a net income of $1,000 and has 100 shares outstanding, its EPS is $10. But if it buys back 10 of those shares, the EPS rises to $11.11. Higher per share earnings make stocks look good.

Making stocks look good. That really is the only ubiquitous North Star that drives American businesses. According to Reuters reporting from earlier this year, U.S. buybacks are at record highs. New repurchase announcements by U.S. companies reached over $300 billion in the first quarter of 2022, meaning that companies are on pace to buy back more than a trillion dollars worth of their own shares this year. Compared to previous years, S&P 500 companies plowed around $880 billion into buying their own shares last year, up from $520 billion in 2020, according to S&P Dow Jones indices. Like the Wall Street Journal clip covered earlier, this is cash that companies could

have used to expand their operations, spend on R&D and CapEx, dare I say, invest in their workforce, but they chose it to artificially inflate their earnings per share. Now, what's the issue here? Why should we be the ones to tell corporations and corporate executives how to spend their money? They are, after all, the experts in capital allocation, are they not? Buybacks are an extremely important part of capital allocation across our economy. Buybacks are an extremely efficient way to reallocate capital. And nimble capital in America is what has driven our response to COVID.

It is what has driven growth over time in combination with nimble labor, in combination with tech, education, health care. It's made America what it is. OK, a lot to unpack there from Mr. Jay Clayton, former chairman of the SEC. He talks about nimble capital driving a response to COVID. What I observed was the Federal Reserve jumping in to save big business by injecting more than $1.5 trillion into the market in March of 2020. He also talks about nimble labor, which basically refers to a company's ability to adjust their workforce up and down based on market demands.

But what I saw was airlines and other businesses taking government bailout money, money that was supposed to go to preventing mass layoffs, and then exploiting a loophole to lay off the workers anyway. He talks about how buybacks are a, quote, extremely efficient way to reallocate capital. But if we look at what actually transpired in the days and months after the start of the COVID-19 pandemic, companies across many sectors, profitable companies, requested government bailouts because for years and years, they had spent all their cash buying back their own stocks. Here's the New York Times in April of 2020. Last month, the top executives of KFC, Wendy's, Papa John's, and other large restaurant chains

held an urgent call with President Trump about the coronavirus crisis. The companies needed billions of dollars in aid to avoid mass layoffs, the executive said. The next day, their trade group asked government leaders, including Mr. Trump, for $145 billion in relief. These companies had been highly profitable in recent years, yet they were seeking help from the federal government. Where had all their money gone? Like much of corporate America, the restaurant chains had spent a large chunk on buying back their own stock, a practice aimed at bolstering its price. I just want to say, if people like you and I did something like this, spent money with reckless abandon on luxuries, let's say a high end car or yacht to make us look richer than we are.

And then went bankrupt. We would be roasted to no end. But these folks, the corporate and political elites, have no problems bashing welfare for the people while at the same time fully supporting corporate welfare. Because it's exactly what this is. Companies misusing their cash to make them look more valuable than they are and then when the going gets tough, hoping to be saved by government handouts. So I completely reject the notion that stock buybacks and repurchases are an extremely efficient way to reallocate capital or even a great way to reward shareholders. Because let's say we were to entertain the shareholder primacy theory for a second, that corporations are to prioritize shareholder return above all other considerations.

Stock buybacks aren't even necessarily the best way to do it. The reality is, for share buybacks, you reward the people who are leaving and selling your stock instead of rewarding the people who are keeping your stock. Right. But that goes to the whole skin in the game thing. Right. Don't people want skin in the game? Don't we want them to have skin in the game? Yeah. The problem is that it's really easy to financial where financial engineer with stock buybacks. Right. There's just so many games that you can play and it just creates a whole different set of problems. I think the fundamental issue is, do you want to reward your shareholders for staying via dividends?

Wouldn't you want more people who are typically not shareholders to come in and own the shares of your stock? Right. Without getting too technical, the point Mark Cuban is trying to make here is that there are two primary ways to redistribute a company's earnings back to the shareholders. One via a stock buyback and the other via dividends. The former provides a short-term boost to the stock price, but can be manipulated easily by executives and company insiders. And the latter is usually a quarterly distribution to shareholders that reward, in theory, long-term investors for holding on to a company's shares. So if it's not the best way,

why are stock buybacks oftentimes the preferred method of earnings redistribution? Well, according to a 2019 paper published by the Roosevelt Institute that analyzed transactional data of non-financial corporations with publicly traded stock from 2005 to 2017, the researchers found that net insider sales of over $100,000 are more than twice as common in quarters when stock buybacks are also occurring than in non-buyback quarters, and that in quarters with net insider sales, buybacks are more than twice as common as in quarters without net insider sales. Meaning that senior corporate executives and other company insiders were personally enriching themselves above and beyond retail investors and other shareholders by timing

their stock trades based on when these buybacks were happening, which of course they decide with their gains coming at the expense of employees and other stakeholders. And more importantly, this paper also shows that this type of behavior isn't a one-off occurrence, but rather evidence of corporate cronyism at a systemic level. Another study conducted in 2017 by Robert Aries and Michael Olenek, professors at INSEAD, a top global business school, examined 1,839 public companies in the United States over a five-year timescale and found that the more money a firm spends on buybacks, the less likely it is to grow over the long term.

The chart on your screen shows that not only do stock buybacks not lead to a growth in a company's market value, they are actually strongly correlated to a declining market value. Those findings, to me, are not all that surprising. It's an indisputable fact that any money spent on a buyback, of course, can't be invested elsewhere in the company. But what makes this worse and far more dangerous for the overall health of the economy is that, fine, if you want to take on additional risk by using your company's free cash flow to buy back your own shares, okay, fine, that's up to you. But that's not what's actually happening in a majority of these cases.

This is an alarming headline from Fortune magazine. More than half of all stock buybacks are now financed by debt. So it's not just that corporations are spending their own money to financially engineer metrics that make them appear more valuable than they actually are. They are borrowing money to do so, which is extremely precarious given the scale and prevalence of buybacks like we talked about. On pays for over a trillion dollars this year, right? It's one thing if a company takes on debt to finance investments in potential future productive capabilities like new facilities or R&D, but taking on debt to finance buybacks, which gives you zero revenue generating contributions that can help pay off this debt in the future, means that companies engaging in this practice are exposing themselves to a lot more financial risk in the long run. From the Harvard Business Review,

quote, Whether it is corporate debt or government debt that funds additional buybacks, it is the underlying problem of the corporate obsession with stock price performance that makes U.S. households more vulnerable to the boom and bust economy. Debt finance buybacks reinforce financial fragility, but it is stock buybacks, however funded, that undermine the quest for equitable and stable economic growth. So yeah, buybacks have far reaching negative implications for economic and societal stability. So let's take a moment to

discuss recent policy changes addressing the issue of stock buybacks. Within the Inflation Reduction Act that has just been signed into law, there is a new 1% excise tax on corporate stock buybacks, presumably to rein in corporations and disincentivize them from engaging in this practice. Now, how does Wall Street feel about this? The future of stock buybacks in focus today on where Democrats appear poised to pass their Inflation Reduction Act, which includes a new 1% excise tax on that practice. The question is whether it will, in fact, have a material impact or not, what that might mean for stocks. I don't really think it's a big deal. 1% buyback tax is about

less than half of a percent to S&P 500 earnings, number one. I just don't think it's big enough for companies to change their strategy, and they're generating so much free cash flow. They do want to return it to shareholders. I think on the margin, maybe they shift incrementally to more dividends versus buybacks. But I don't think this is going to be material. Interesting. The 1% tax is immaterial. Doesn't matter.

You see, the thing we have to understand is that in this era of American politics, where there is an unlimited sum of money freely flowing back and forth between the government and the private sector, there are no laws on the books that aren't endorsed by the corporate elite. It may not be exactly what they want. In this instance, I'm certain that they would prefer no tax at all, but given the current climate and political sentiment, they can live with the 1%. In fact, it might even benefit them in the long run. David Dayen, in some great reporting, highlights this exact point in the American Prospect. The bigger problem is that the excise tax cuts the government in on the buyback scam. Not only will shareholders and executives continue to benefit over workers

and capital investment, but so will the U.S. Treasury. Henceforth, if you try to limit buybacks, which the Biden administration proposed in its 2023 budget, that will cost the government money. If you try to ban them, which the SEC could do simply by removing the safe harbor put in place in 1982 that effectively decriminalized the practice, that would cost the government even more. So I don't think it's an accident at all that the Inflation Reduction Act is riddled with corporate loopholes and handouts. It's corporate welfare in disguise. There is nothing in there that Wall Street can't live with. And if it's something they absolutely don't want to live with, it's 100% gone, a la the last minute removal of the carried interest tax provision.

The point I'm trying to make is, you know, don't be confused by the free market. There is always somebody making up the rules to the game. Senior corporate executives will forever be incentivized to enrich themselves and their shareholders without regard for their employees or society in general. And buybacks are a great example of this. Great for corporate insiders, but bad for everyone else. And if we acknowledge that there is maybe more to America than allowing a small group of people to make as much money as possible, then it's up to us, no matter how critical or skeptical we are of government power, to force our elected public servants to create rules and guardrails that decentralize power and put it back in the hands of the American people. That's it for me today. I hope you found this segment about stock buybacks

to be helpful and informative. If you enjoyed it, I would encourage you to head on over and subscribe to my YouTube channel, 5149 with James Lee, where I make videos on topics related to business, politics, society. The link will be in the description below. Thank you for tuning in to Breaking Points. And as always, I appreciate your time. Hey, Breaking Points, Marshall here. I'm with Derek Robertson of Politico. He wrote a funny but also important piece about how politicians are terrible podcasters. Now, Derek, I know that half of the audience is already rolling their eyes. This is superficial. This is vapid. Why is you listening to 10 hours of politicians' podcasts? Why is that important? There's bigger issues in the world.

Why do you think, jokes aside, this is an important topic we should be thinking about? Well, it evolved, you know, the reason I wrote this and the reason it evolved from just a funny observation about how every politician seems to feel the need to, you know, aspire to be the next Joe Rogan or something was because it is, you know, communication is a part of being a politician. You know, if politicians weren't communicators, they would be policy monks, they would be lawyers, they would be any number of other things. You know, it's an effective way. Politicians have historically used media to build followings, build support for their pet political causes. You think of FDR with radio, you think of, you know, Reagan being the kind of president of the TV and pop culture era,

and obviously Trump being literally a reality television star who became president. It is, you know, the way politicians choose to communicate with the public is important. And it just so happens that what I found after, as you said, listening to 10 straight hours of podcasts hosted by politicians is that it is a medium that is uniquely unsuited to who they are and sort of what their duties are and the way they are allowed to function as public figures. Yeah, the interesting kind of meta thing above all this is a lot of politicians are explicitly deciding that they no longer should engage with the press, with interviewers. There's nothing in it for them. Why should they give content to people who are trying to tear them down? So they see podcasting as a way to get

direct with people, to talk to the audience they actually want to speak to without having to actually, let's say, get not even gotcha questions, but tough questions that you don't really want to hit. What do you think about that theory before we get into actual podcasting? Is it possible that politicians will be able to go around outside gatekeepers whether they're left right or center it's funny this is an element that i i wanted to include in the piece that i wrote but ended up not including just for reasons of you know attempting to be concise for once uh but there's a similar phenomenon to this happening in sports uh i'm not sure uh if you're an n NBA fan or for the viewers.

Draymond Green and the Golden State Warriors has made a bit. He started his own podcast recently, and he's made a huge deal out of how NBA players and other athletes doing their own media is the, quote, new media, as opposed to the old media. You know, comprised of actual journalists, the idea that you can somehow get, you know, closer to the truth or get a more kind of an experience of more veracity or authenticity by foregoing any kind of media interlocutor and just bringing people content yourself. And sometimes with Draymond Green's podcast, that's very entertaining because he's a really entertaining guy. Also, he's pro athlete and is not beholden to the same kind of speech norms and incentives that politicians are. I think that with politicians sort of circumventing media and speaking directly to the faithful, as it were, through their own

platforms, I think that, you know, you can be very successful in building a niche audience with that. Ted Cruz's podcast, as I write about, is actually very popular. It's consistently in sort of the top 40, 50 on the podcast charts, if I'm remembering correctly. But the vast majority of people are not going to, you know, I think that the idea that you can build an entire media platform and be an effective politician based solely on your own sort of media stream is kind of a myopic one and it's kind of one that hems you into playing to the base of course there's any number of arguments that could be made that that is the most effective political strategy to take in the era we live in. But I don't think that, you know, I'm very skeptical

that that will be a totally viable media strategy because at some point, depending on how large your ambitions are, you need to reach people outside of your little echo chamber. And you can't really do that

when without interlocutors, without someone to kind of vouch for you, give you credibility with a different audience than who you're used to yeah and it's funny i'm glad you brought up dream on green because that gets to the core of the actual challenge here i think on one level politicians aren't your friend and you and you write about this but you know you know the podcasting medium someone's in your ear you're watching them it feels very directed, feels different. And if Dream on Green wants to interact with a very specific way, that's different than a

politician who has objectives, who's trying to win. I hope that listeners and audiences can understand that it's slightly cynical to think that we could just go around things, because look, we get it. We've all seen a bad faith media interview. Maybe some of us have given bad faith media interviews before, if I'm entirely honest with myself. But at the same time, you should remember that what a politician is saying when they say, let's just go around all the gatekeepers is, they're basically saying, I want to be able to say my talking points that me and my staff wrote to you without anyone asking for a follow-up question. That's what's actually being said here. So here's my question for you then.

What was the experience like actually listening to these shows? What shows were the best shows? Which formats were particularly effective? Was there any difference between whether Republicans or Democrats were good at the medium? What did you find? So there are two main points I want to make here. One of them is that I was very sort of pleasantly surprised by how, and again, maybe this was just by contrast, or maybe I was experiencing Stockholm syndrome. Dan Crenshaw's podcast was pretty enjoyable. It's really just kind of a chatty, you know, it doesn't really have a strong structure it feels the most like a normal podcast um he will just some some of them are it's it's an interview format this kind of ties into the

other point i was trying to make it is an interview format in that he is the host and he brings on various guests but frequently frequently these guests are simply friends of his like representative mike gallagher and it's really just two kind of like nerdy gen x politician guys chatting about like which batman is the best for uh 10 minutes or something it approximates the most closely of any of these that i listen to what the normal experience of listening to a podcast is like um so the second point is that most politicians fall on kind of a stock podcast format. That is the interview show. So many of these that I listen to are basically just politicians attempting to be like do the Ezra Klein show, basically.

And just do kind of a hand in hand with what you are describing, which is the fact that when you're doing the kind of new media bit, you have a captive audience and you have total control of the medium and the message that you are creating. By being the interviewer instead of the interviewee, it effectively allows politicians not only to not have to answer questions they don't want to answer, they set the terms of the interviewee, it effectively allows politicians not only to not have to answer questions they don't want to answer, they set the terms of the conversation and they kind of take the reflected, you know, you curate the guests to reflect your own, this is what I'm interested in, this is who I want to platform, this is who I am allied with. And it ends up being incredibly

boring because most politicians are not good interviewers. Good interviewing requires a level of confrontationalism. It requires a level of kind of willingness to prick under the superficial sort of surface of what it is that you are nominally talking about. And most politicians do not want to do that because they don't do not want to create friction because the podcast is essentially a vanity platform for their political project. A good example of this was, and I hate to say it because he is, as I write in the piece, a great broadcaster, literally a Grammy winning broadcaster for reading his audio books. But Al Franken's podcast could be a tough listen at times because he is plotting a

political comeback. You know that there are questions he wants to ask people that are sort of just bubbling up under the surface. You know, Al Franken is a guy with an active wit and active intelligence. And you can tell that there are things that are just off limits that he does not want to talk to people about. So it makes for a very dull, the interview format just makes for an incredibly dull program. Pete Buttigieg was guilty of this too. His podcast was just astonishingly dull in that way. You referenced this,

but whatever happened with President Obama's podcast? Renegades, yes, with Bruce Springsteen. I wrestled over whether to include this in the article and I ended up not including it because it is so it's such a strange you know I was saying that these these are vanity projects but that's a vanity project um it's really you know presumably I don't know what the the numbers were you know Spotify thought this was going to be a blockbuster podcast. It's I mean, it's Obama and Bruce, for viewers who don't know, Obama did a podcast with Bruce Springsteen, where they had kind of these like, sort of freewheeling conversations about various topics

like masculinity, race, politics, etc. It's actually pretty entertaining. I listened to a few episodes of it. It's not bad, but it's one of those things where you listen to it and you just go, I don't know who this is for. It doesn't, you know, Obama being the measured guy that he is, it's not, it's not, it doesn't have the kind of like crackle and pop that like really good conversational podcasts that talk about uh various controversial political issues too you know springsteen is good springs to anyone who's ever seen like live footage of a springsteen concert he's a master storyteller and it's just fun to listen to him talk to him he could he's to use a cliche he could read the phone book and it

would be entertaining but this this show got uh they they stopped making episodes of it. I actually I think it was part of the Obama's there. People will likely remember that Michelle Obama also had a big podcast deal with Spotify. I. So I wrestled with whether to include this because I think the Obama's deciding to basically become media influencers post-presidency is worthy of its own examination and that it didn't really tie into my premise of examining how sitting politicians use this as a platform to further their ambitions and their political projects. But yeah, the Obamas podcasts are done. So the last two questions here question one would be you noted there's actually like a they're far more like republican um podcasts than democratic podcasts and the republican ones tend to do

better i'm curious like what your theory of the case for why that would be true is i think there are a couple of things going on there there's i think there's just more of an appetite for them uh this is this predates uh podcasting you know in the you have the dominance of uh republicans and conservatives on talk radio for many many decades uh people you know someone it seemed like someone would write an article every two years going you know why can't the left why is there why isn't there a popular left broadcasting personality or service and uh you know there was was Air America, if viewers will remember, which was the attempt during the Bush era to compete with right-wing talk radio, which much more easily to creating the kind of closed epistemological garden that makes for good agitprop. You know, if you are having a podcast where, I'm trying to imagine, you know, the popular left podcasts tend to be ones

that are really angry and that kind of mimic the tone of right wing radio and rile people up, tell them, I know this is what you want to hear. None of those bastards want me to say it to you, but I'm going to say it anyway. And like, we are all going to get, we're going to have our moment of catharsis together. You think about the popular media approaches that left-wing politicians have had in that vein have been like, on one level, you have Tropo Trap House, which is like a total DIY thing. And then you have like Michael Moore, who's a populist documentarian who largely in a different medium, sort of does the same thing rhetorically that right-wing talk hosts are doing. So I think that the right-wing mode of rhetoric just lends itself better to the format. Second is, I mean, this is actually just part of the same point, but there's a huge legacy audience

built in. A lot of the, you know, a lot of the popular podcasts, political podcasts now are from old school, old school, right wing radio guys like Mark Levin, people like that. So you have, you just have a lot of fold over from people who are loyal radio listeners and now are doing, doing the podcast routine. So the last question would be, look, we can say that politicians are bad at podcasting. All we want, they're going to do it anyways. It's a new format. That's the reality. What would be your advice if you were a comms director for a Democrat or Republican?

What would be your advice for like, how do we make this as much of a win as possible relative to your point, the weaknesses that a politician is always going to have in the format? My advice would be to hire an incredibly good editor. My advice would be to, I don't care if you have to do it in a skiff or if you have to do, if you have to like make sure the tape self-destructs, put your candidate or your office holder, whoever you work for, in a room with someone they actually want to talk to that they personally think is interesting,

whether it's, you know, a policy person, a lawyer, like someone, a dietician, like literally anyone who they authentically think is interesting, put them in a room, have them just candidly speak to each other with, tell the politician, like, you can swear, you can say shit about your constituents that, like, you wouldn't want anyone to hear ever. Like, you can say shit about your constituents that like you wouldn't want anyone to hear ever. Like you can say anything and we will edit it to remove all instances of anything that you cannot say on the record by virtue of being a politician. Now, this is the reason I am not a comms director, because no professional comms director would ever allow or tell a politician to do this. But I think it is the only way to actually get to the authenticity of the medium that makes people like it so much i would also tell them to have a co-host

um so ted cruz does this exactly yeah the thing about cruz's podcast is like almost there like cruz has michael knolls uh from the daily wire and they have a little bit of like a rapport where you know kn Knowles will wind him up about something in the conservative media cycle, and then Ted Cruz will deliver one of his Ted Cruz speeches, and they come close to having an okay rapport. But it's you need I think there are limitations unless the people involved are very, very close friends to having just a two man room. I think if I were if I were playing fantasy comms director here, I would say, get one of your best friends on the hill, it doesn't have to be another office holder, although cool if it is, get one of

them to commit to hosting the show with you and do what I just said. And the two of you will just have kind of like a free floating conversation with a person you think is interesting. And we will edit it to pieces to make sure that you don't, you know, end up on my website, politico.com tomorrow saying something that you shouldn't have. Well, you heard it here. Any host staffers or future or current politicians are listening. Derek, thank you so much for joining us on Breaking Points. Yeah, thanks, Marshall. Great time as always. This is an iHeart Podcast.