Breaking Points with Krystal and Saagar - Mini Show #56: Dark Money, Herschel Walker, Lincoln Project, Adam Neumann, & More!

Episode Date: September 25, 2022

Krystal, Saagar, & friends look at dark money in politics, Herschel Walker's campaign, the Lincoln Project grift, Clintons returning to philanthropy, Southwest airlines, and Adam Neumann's new real estate venture!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/Chicago Tickets: https://www.axs.com/events/449151/breaking-points-live-tickets The Lever: https://www.levernews.com/James Li: https://www.youtube.com/c/5149withJamesLi Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

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Time now for our weekly partnership segment with The Lever. And joining us now is the man himself, David Sirota of That Outlet. Great to see you, sir. Good to see you. Thanks for having me. Of course. So this week, you guys are taking a look at a potential path to end dark money. Let's go ahead and put this up on the screen. This is from Andrew Perez. It says, How Democrats Could Actually End Dark Money. Senate Democrats will vote Thursday on a dark money disclosure bill known as the Disclose Act. They should do what's needed to let it succeed.

So first of all, just break down for us, David, what is actually in this bill? So the key part of this bill is to force 501c4 organizations to disclose their major donors. 501c4 organizations are technically, quote unquote, social welfare organizations. What they actually are, many of them in practice, are dark money groups. They're the groups that spend money in elections, anonymous money, slamming candidates, supporting candidates. Some of them say, you know, go tell this candidate this, go tell this candidate not to do this. But the point is, is that they are conduits for anonymous money to essentially influence and really buy elections. And by the way, not just elections,

but pushing for legislation, pushing for court appointments and the like. We don't know who is actually funding all of these groups, even though I think it was in 2020, a billion dollars of dark money was spent in the 2020 election. So point is a huge amount of unknown anonymous cash flooding into our elections to buy essentially our democracy. That is one of the threats to our democracy. And the bill would simply say, the big provision of it would simply say, these organizations have to tell us who their donors are. And the interesting thing is that 50 Democrats in the Senate are officially sponsoring this legislation. No Republicans are sponsoring it. And it's just a disclosure bill. Yeah. I mean, have you heard any good faith arguments against it or they just

don't really want to talk about it at all? Well, the Republicans have been saying, listen, we don't usually agree with organizations like the ACLU, but on this one we do. And the ACLU, as an example, has put forward an argument that 501c4 organizations should have the right to some level of privacy, that donors should have the right to some level of privacy. And so the Republicans, if you think they're making a good faith argument, I guess if you take them at their word, they are saying that, I guess, donors should have a right to privacy. I mean, my argument would be that if you're trying to influence public policy, public elections, the public space, and you're doing it at a level of, you know,

millions, if not billions of dollars, the public should have a right to know at least who effectively is talking to the public in that public square. So here's a potentially more difficult question answer, or maybe it's not, I don't know. Yes, you have 50 Democratic sponsors on this bill. Are they actually committed to the underlying principle? Because you guys covered that the DNC just had an opportunity to ban dark money just from within their own primaries. So you're not having this whole like, oh, we don't want to unilaterally disarm against the Republicans. You're just talking about Democratic primaries. They didn't even take it up.

So if this had an actual chance of really passing and it wasn't just like a virtue signaling effort, do you think you would still have this level of Democratic support? That's really hard to know. It's a great question. I think one thing we can take away from this is if Joe Biden is giving a speech at the White House calling on the Senate to pass this, if 50 Senate Democrats are officially sponsoring the bill, including Manchin and Sinema and the like. What it tells you, at least, is that the party recognizes that the politics around the issue of corruption is now salient. That's a good thing. What I'm trying to say is that I think if Joe Biden has a dark brand in power at all, his dark brand in power is to figure out where the center of the Democratic Party is and try to put himself there. And the center of the Democratic Party has clearly now feels the need to acknowledge and portray itself as against kind of unregulated money of corrupting our

democratic process. And that took years to kind of move the center there. That's the good news. The bad news is what you're talking about, which is they're bringing up this bill knowing that they're not going to kill the filibuster to allow the bill to actually pass. By the way, in the past, when the Democrats had a trifecta in 2010, they did the same thing. They essentially allowed the filibuster to not let this bill, the same kind of bill, pass. So it does raise the question, how much of this is theater? How much of the Democratic support would be there for the Disclose Act if they actually were serious about doing everything that's necessary to pass it? I don't know what those numbers are, but I think it's a fair question. Well, and it's become even more salient of a

question in certain ways because we've seen the way that dark money has been incredibly instrumental in establishment Democrats keeping their establishment allies. So massive amounts of money. Well, I'll let you lay it out because you probably know the numbers better than I have, but there's really been a war on the progressive left of the party and dark money has been an instrumental tool for the powers that be to keep their grip. Oh, for sure. I mean, millions and millions of dollars were spent just in the last few months through dark money groups in those primaries to essentially crush insurgent progressive candidates in their nominating contests. So yes, the Democratic Party has used dark money to essentially put the thumb on the scale and select nominees in local races that it wants.

Point being, there's a big, powerful part of the Democratic power elite that likes dark money, that actually relies on dark money. Also worth saying that in the last election, 2020, the Democrats benefited more from dark money, at least the dark money sources that we know of, than the Republicans did. There was a billion dollars of dark money spending, and most of that was there to help Democrats. Now, it's not to say the Republicans weren't helped by their own dark money, but the point is that you're absolutely right. And this goes back to what you raised before, that the Democratic Party just recently blocked even having a vote on a resolution from some of its own DNC members to simply say, let's not have dark money in our own primaries. So I think this is very, really important. But I come back to the idea that there really is good news here.

The bottom line is, if the president of the United States feels the need to come out to the public and say, look at me, look how much I am against dark money, and I'm demanding the Democratic Senate actually pass this, some of it can be seen as theater. But it is an acknowledgement that this issue of corruption is, and polls show this, is becoming a huge issue among voters. And the only way ultimately I think we're going to get something like the Disclose Act is if there's enough voters, enough of a critical mass, making it clear to politicians that this is a kind of line in the sand issue and people want action.

Yeah, I think that's all well said. And while transparency isn't obviously all the reforms we want in terms of campaign finance, it does give voters a greater understanding of the forces that are shaping the vote taking and the way these candidates are running campaigns. And that level of transparency enables reporters such as yourself to really help expose the game of what's actually going on here. And can I make one last point on this? Because there's one small point here also, which is to say that also transparency, I think, can provide some level of deterrent to some of the worst dark money behavior. What I'm saying is that part of the reason we've seen such an explosion in dark money is because the biggest of big donors know they can flood the system with money without having to take the kind of public heat, without having to face the kind of public scrutiny that they would

if there were transparency laws on the books. So transparency, in a way, is a way to say, listen, if you want to dump money into elections and try to buy the political process, you're going to have to actually be known to the world that you're doing that. And that can be something of a deterrent to some of the most egregious behavior here. I think that is a wonderful point. The Stock Act that discloses the trades that are being made by members has been an incredibly powerful tool, both for investigative journalists and also for grassroots efforts to try to hold these politicians to account and hopefully, eventually, maybe force a change in terms of what members of Congress are allowed to do. David, always great to have you. Everybody go and subscribe to Lever if you are able. They are doing work that no one else is doing, really pushing a people's agenda to get to the root of

all of this money in politics and corruption that is such an important force shaping our politics. Great to see you, David. Great to see you. Thanks for having me. So you guys know we've been keeping a close eye on that big Georgia Senate race, which could, again, determine control of the Senate, could even go to a runoff again for control of the Senate. Crazy stuff between Hershel Walker and incumbent Raphael Warnock. Several polls out this week have that race

as tight as it could possibly be. One has Warnock up by a couple. The other has Walker up by a couple. A big issue in this race

or at least a big point of media discussion has been sort of like negotiations around debating. Herschel Walker famously not, how would you put it,

Sagar? Not the most eloquent. Coagent. Yes. Sometimes struggles to put together exactly coherent thoughts and sentences in a way that really makes a lot of sense. So he did agree to a debate and seems to be kind of downplaying how he will ultimately perform at that debate. Let's take a listen to what he has to say. So I'm preparing.

I'm this country boy. I'm not that smart. And he's that preacher. He's a smart man. Wear these nice suits. So he's going to show up and embarrass me at the debate October the 14th. And I'm just waiting. You know, I'll show up and I'm going to do my best.

I'm going to do my best. Wow. In a way, I appreciate the honesty. But, you know, we talked about this in Atlanta at our live show. I don't think debates matter. I don't think they matter at all. The whole, like, Fetterman-Oss thing. I love them. Yeah, me too. I love covering them. I love the hell out of it. I'm a junkie and I'm not typical of the American public. There is vast arrays of evidence

to tell us statistically that presidential debates and especially down ballot debates have zero impact on the election almost every single time. And every time there's like some fake thing, they're like, so-and-so gets a bump out of the convention. But then the second convention happens, and then that person gets a bump. And then three weeks later, it's the same thing. You're like, so what is, so all these debates, listen, I think they're important.

I think it's good to get people on the record. I found the debates very helpful for me to go back and look at what Trump was saying in 2016 and later. But, like, let's just be all honest here about, like, whether it all matters or not. I sort of feel like, I mean, I could buy that maybe the presidential debates matter because there's so— But there's no statistical evidence on that either. I know, because there's so much media focus on it and whatever. But I tend to agree with you.

The national mythology around televised debates got built up after the, like, Nixon-Kennedy flop sweat thing. Yeah, Kennedy. It was 1960. And so ever since then, I think we just take it as an article of faith that these things really, really matter. Maybe you could say, like, in the 2016 Republican primary with Trump. So I was about to say, primary debates actually matter a hell of a lot. So the primary debates with Trump, Trump is also a unique figure. But at the same time, Newt Gingrich actually got a big bump out of his South Carolina primary.

I think he like won the state of South Carolina. He had this great moment where he like went after John King. I forget exactly what he did. Anyway, so he like went after him because he mentioned his wife. No, there was, remember there was that story about how Gingrich, while his wife was like sick with something in the hospital, cancer, when asked her for an open marriage and it's like broken the press. And John King opens the debate with this question. He's like, would you like to respond to these allegations? And Gingrich was like, no, but I will.

And then he just goes on a tirade. Yeah, he's like, the corrupt mainstream. And the crowd went just wild. I mean, it was really a preview of the way that Trump would like roll through his debates. Anyway, all this is a long way of saying I also wish the debates mattered because I enjoy watching them and I think they're interesting, but I don't actually think there's a lot of evidence that debates matter or that candidates refusing to debate matters. Again, something I wish mattered, but I don't think actually matters. And then the other thing we've been talking about with regards to

Walker and Warnock, which I think any fair-minded person would say, just in terms of candidate quality and being good at being a politician, regardless of ideology, Warnock is obviously vastly superior to Walker. I also don't think that matters that much. And we see it in the polls now. So in terms of Walker's comments here, I think it's kind of a clever strategy. What he's doing is trying to set the bar really low and say like, look, I'm not that smart. I'm a country boy.

He's a fancy guy with the suits and he's a preacher and he's going to come in and he's going to make me look foolish. And then if he even just sort of maintains and doesn't get embarrassed, then that's viewed as a win. And we've seen this too in terms of the media coverage of how these debates go. Joe Biden famously, like the bar was set so low for that guy in the debates that if he didn't just like drool on himself and fall over, the media was like, he did a good, it was amazing, Joe Biden was great.

I'm not buying the country boy thing having watched some of the videos of this guy's son who is genuinely one of the most obnoxious jackasses I've ever seen online. So, I'm just saying your son is like flaunting his wealth and all this other stuff. I'm like,

I don't think you've been a country boy for a long time. I mean, I don't know what his net worth is, but I'm going to guess it's like pretty high. Herschel Walker, a lot more charming in my opinion than his son. Oh, absolutely. I mean, look,

again, nothing against, you know, you look at him in a way, every time I'm heard him spoke, I feel bad for him. And I think that, because it's like a sympathetic thing. I man he's gonna knock that's kind of how i right i feel the same i'm like oh man like this is it's kind of how i feel with biden where you know sometimes you're like just get him out of here like this is so uncomfortable you just every sentence you're

like oh yeah exactly landing having a landing exactly you know you want you don't want people to do like i want to debate policy like all the, but you hear Walker speak, you're like, man, I feel kind of bad for you. So, at the same time, look, he's got a big name in Georgia. You know, pretty easily won the primary. Trump is 100% behind him. And national trends matter more than anything. He very easily could win. Oh, absolutely.

I think Georgia, to me, true coin flip. Yeah. True coin flick. I mean, if I had to pick, we picked when we were down in Georgia, and I actually would give the nod to Walker because I just think that the economic issues, I just don't think that the candidate quality matters all that much. So we'll see.

But it really is as close to a true toss-up as it could be. Absolutely. We'll see how it goes, guys. So some more cringe news out of Hollywood. There's a major announcement from Showtime. Let's put this up there on the screen. They are doing a five-part docuseries, yes, you heard me correctly, on the Lincoln Project. Let me read you the, Donald Trump, in the 2020 election. There has never been a super PAC that captured the imagination of the general public like the Lincoln Project. They showed us that you could use storytelling and the power of the internet to punch back

and that you could fight a bully by bringing the fight right to their doorsteps. Released by Fisher Stevens and Kareem Amir. So Fisher Stevens, I think this guy was in Friends or something like that. Anyway. Oh, for real? He's like a famous-ish actor. Yeah, this guy right here. I don't know.

Anyway, so I vaguely recall seeing his face on the television screen. Oh, yeah, he was in Succession, too. That's another reason I didn't notice him. Anyway, the point is that they are obsessed with these guys. And all statistical evidence that we have is that the are obsessed with these guys. And all statistical evidence that we have is that the Lincoln Project, which raised somewhat $100 million or so, had no impact on the election

and, in fact, had the inverse impact of driving down turnout, either amongst Democrats or convincing Republicans to vote for them. It was a pure grift operation. Not to mention their own cover-up of John Weaver, the alleged pedophile, at the very least, like, alleged sexual harasser who has admitted to this by grooming young men and actively was covered up by the organization. At the same time, they were all becoming stupendously rich. They were taking this super PAC money and then paying themselves

consulting fees, media projects, and more to have zero impact. Now, if you just want to say like, oh, these guys are like a business. Remember they had all their plans before the pedophile scandal about to launch a podcast network and a media company and all that. If you want to say like, this is what we're doing. We're monetizing. Like, okay. I think it's gross, but whatever. But they're fooling boomers, specifically MSNBC boomers, into thinking that they're changing the election and becoming extremely rich off of it. This is the liberal version of the we build the wall. Yeah, yeah, that's right. It's like a sort of like fancier version of that. But it's the same thing. It's the same thing. It's taking people's genuine,

like political angst, anger, desire to do something, and just funneling anything, it hurt their own cause. But they could create this ad content and convince people that this was the way to fight back and funnel millions upon millions of dollars into their own pockets. That was their innovation. What's funny is when I showed Kyle that tweet with like the thing, he was like, oh, this is going to be good. I was like, what are you talking about? He's like, it's like an expose, right? And we're like, no, dude. No, it's a hagiography. It's like an expose right and we're like no no it's a hagiography it's like oh my god aren't they amazing i i'm actually genuinely surprised given how things went down with john weaver that hollywood still wanted to touch i think probably what what these guys are so good at that's their key talent is like ingratiating themselves to the donor class or hollywood elites or media elites and convincing them of their own bullshit story that they're super relevant and super important and super geniuses in media when the reality is, like, their stuff sucked.

It didn't work. It didn't land. It was not helpful at all. Instead, siphoned millions of dollars that could have gone to actually useful projects into their own pockets. Showtime has always had horrific political content. They had the circus and they've let that show run for years, which is, I mean, it's complicated because those people were always like nice to me, the guy who ran it. But I mean, I'm just gonna be honest, I think the show is terrible. And it's specifically John Heileman and Alex Wagner, who's now over at

MSNBC. I think this has Heileman all over it, right? Because this guy is also, I don't understand how anybody sees any talent in him. Look, Game Change was awesome. I totally get it. But outside of Morning Joe commentator, like, why is this person raising all this money for the recount, which has been a totally failed media project? The circus keeps getting renewed, like, time after time. I mean, is anybody really watching it? Does it really have a major impact? I'm going to go ahead and guess no. And this just seems, he's also very friendly with these Lincoln Projects folks. I would bet you he has something to do with this.

Or at least. It's a little clubby. It's a very small club. Yeah, I don't know. It's very serious. Showtime is great. They've got some great shows. Yellow Jackets.

Shout out to Yellow Jackets. We just watched a phenomenal documentary about John McEnroe that was Showtime. Oh, yeah. Right. And Oliver Stone's JFK. Shout out to them for letting the JFK doc be on Showtime. Oh, that's right. Yeah, I forgot about that. They've got some great shows. Billions. I enjoy Billions. There's a couple shows like that. They're good.

This is a miss. This is a major L. Showtime. I'm sorry. But it is true. I mean, it really does also expose the lie of the meritocracy. Like, there are some people who are just good at, like, I'm sorry. But it is true. I mean, it really does also expose the lie of the meritocracy. Like, there are some people who are just good at, like, working that system. Getting in with the right set of elites and being able to market themselves to those elites, irrespective of their actual results in the real world. What was that freaking network that collapsed that had all that money and all that press? Remember?

It was like it was like oh this is gonna be the you remember what i'm talking about right they had the youtube channel they had all these interviews with all these celebrities oh uh it starts with a v or it's the guy carlos watson yes that thing oh ozzy ozzy that's it that's the same thing that guy was good at was persuading these elites that like this was a thing and selling them on the story and so he gets all this funding and all this credibility and all these media write-ups and all of this there was nothing there no one wanted it at all this to me is a very similar phenomenon to the the oz phenomenon i totally agree with you yeah wow there you go

what a story for America. Indeed. All right, guys, some big and I know exciting news for our audience. Let's go ahead and put this up on the screen. The Clinton Global Initiative is back. Bill, Hillary, and Chelsea return to center stage, their own, after going dark during Hillary Clinton's 2016 presidential campaign, the Clinton Global Initiative is back. And you knew, Sagar, that the moment they felt like they might be able to get away with it, they would bring back their big confab. This is, I really think for Hillary and maybe even more so for Bill, like their big aspiration is just to be sort of leaders of this cadre of global elite. Bill especially.

And this was their convening. They loved that they could bring all these people in from around the world who would sort of bend the knee to them and all of this. But they had this line in the New York Times article that I thought actually put it pretty well. They said, in many ways, the early days of CGI were the high watermark of the philanthropic capitalism era when trust in the wealthy and celebrities to

save the world ran high. In turn, many significant organizations modeled themselves after the Clinton's endeavor. It really does

feel like a throwback to a time period when people could have deluded themselves into thinking Hillary Clinton could give all

these speeches on Wall Street to Goldman Sachs and then go ahead and present herself as a friend to the working class. That bubble has very much been burst. And this just feels like, you know, it just feels like such an anachronism to go back to that time. I completely agree.

Yeah. I mean, the CGI was it was crazy, too. You know, I wrote a lot of stuff back in 2015 about the CGI and the Clinton Foundation. And I mean, the cutouts that they were using for their political career was insane. Like, my personal favorite was the Moroccan king who literally admitted he was only donating to the Clinton Foundation so he could get a meeting with Hillary because he knew that she would probably be the next president.

I mean, that was almost— It was, like, direct. It was almost— Pay for play. Sort of part and parcel of the whole idea. Yeah. It was like that their star power and their potential political power was what caused all these people to gather and do, you know. That they can then use for their vanity. Get their commitment and whatever.

And travel and like all their family commitments. You know, it's like all this stuff. It remains like one of the more like outwardly corrupt enterprises that was at the front of American politics. Of course they bring it back. I do think though that like you said, in the context of today, it just reads like a total grift. Whereas at that time, I mean I'm not going to say most of us knew it was a grift. But I guess it was just more socially accepted to do so. Yeah. It was, I mean it had all those like girl boss, lean in, feminism elements to it as well.

They call it here, they call it a Davos on the Hudson event, which I think is kind of perfect. It's another one of these places where rich people can sort of like make themselves feel good. Yeah. Feel like they're part of the solution. It's a world economic forum. Rather than, you know, really clearly part of the problem. Right. They mention here, too, I mean, basically, you had this hiatus because of the questions around it, and because of Hillary's campaign, and this is sort of, I guess, the first moment where they

felt like they might be able to get away with it. But the price of admission has been cut in half. So, it gives you a sense of, you know, even they don't think that they can really restore it to its former glory and grandeur because that moment has just more than passed for them. Very true. Hilarious moment on the internet yesterday. Let's put this up there on the screen. Tweet from Southwest Airlines. For those who are just listening, we teamed up with Guitar Center to surprise a flight full of customers flying out of Long Beach with a ukulele and a lesson. By the time they arrived in Honolulu, they were pros. Attached is a photo of an entire plane, all with their own individual ukuleles. Now, this prompted a significant discussion online and pushback.

And I am among the thousands of people who said they would rather have jumped out of the plane and be stuck. Imagine being stuck in a metal tube over the Pacific Ocean with hundreds of people. First of all, you're on Southwest Airlines, so things are already not going so well. I like Southwest. No, listen, the no seating thing drives me insane. I like it. I'm a fan. All right. Very controversial already.

So first of all, you're on a plane in the year 2022. Already generally in an uncomfortable experience. Yes, true. Thank you, Pete Buttigieg. Let's put it that way. Then two, somebody hands everybody a ukulele, which they have never played before. Can you imagine the strumming? Now Southwest claims that everyone put them away

after 20 minutes. You know there's one guy on there who is sitting in- Who can't stop. And there ain't no noise-canceling headphone in the world that's drowning out 350 ukuleles. So, I don't know why I thought this was the funniest thing that's happened on the internet in a long time. Just the unanimity of people being like this is literal like fresh hell i would rather rather have snakes on the plane i guess i get these ukuleles off this plane well i liked looking at the picture that they shared right is there a lot of people who are like yeah right some of them were really happy people who have like, yeah, ukulele. Some of them weren't really happy. And then there's some people who have, like, a death stare.

Right. There's this guy in the Broncos hat. Like, their eyes are just totally dead. This dude in the Broncos hat is like, kill me, man. He's like, just put a bullet in my head. There's some people who, like, have their headphones on or are clearly trying to just, like, pretend none of this is happening. That would be me, for the record.

I'd just be like, I can't handle this, man. I also thought about, okay, even then, once you get to Hawaii, now you have all your luggage and you've got to carry a freaking ukulele too. Or feel bad about just like trashing this ukulele. Southwest is going to let you bring it back? That's another question. Are they going to charge you for the extra bag? You think, what about on your next flight?

Whenever you're coming home? Yeah, are you going to have to check your freaking ukulele? So now you're going to make me gate check my bag because you gave me a ukulele? I'm just making things up. I don't know about you, but I feel bad even if it's something that I genuinely don't want. I would feel bad just throwing away a perfectly good ukulele. I'd feel totally guilty about that. I totally agree with that.

So now you've created me with a moral quandary and a mass inconvenience, and my ears are bleeding from the sounds of 300 passengers. Everyone's like, oh, they're going on vacation. The last thing I want when I'm going on vacation is hearing somebody playing an amateur ukulele.

Did you think of this angle? Southwest, a lot of people, a lot of families fly Southwest, so you've got a bunch of kids, toddlers, playing with the ukulele,

trying to hit people with it. Like, oh. Great point. Forget it. Great point. Forget it. Forget it. It's a parent's nightmare, too. Take that thing away from a kid. Oh, forget it.

They're going to freak out. They're going to freak out. Yeah. Did you guys, did you have to learn recorder when you were a kid? Oh, thank God. Did you really not? No, no, I never played. This is a rite of passage in America, at least coming up when I did.

And they are literally engineered to make the worst possible noise. But I'm sort of sentimentally attached to the recorder that I have had since I was in fourth grade because it was passed down through my family. It has my name on it in little letters. So I don't want to throw it away. But my kids, so I'll hide it for my kids, but they'll every once in a while, they'll find it. And just it's the most God awful sound in the universe. So I just imagine like that across the whole place times a million anyway someone commented they were like we asked for two inches more leg space to be treated like human beings and all we got was ukulele so i don't know why i found it so funny i did i thought you

guys might appreciate it hey there my name is j 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, we're going to talk about a new company called Flow, touted as Silicon Valley's answer to America's housing problem. Now, I want to start today's discussion with actually a clip from Sager and Marshall's realignment podcast with guest Mark Andreessen, co-founder of Andreessen Horowitz, a $28 billion Silicon Valley venture capital firm where they discuss the American dream. He'll be a central character in today's segment. Yeah, so look, I think the American dream, at its core, I think

it's quite straightforward idea. And in fact, you might not even say it's an American dream. You might say it's a universal dream, right? And I don't know if this makes me, I don't know if this is a right-wing view or left-wing view or Marxist materialist or what it is, but I think it's actually pretty straightforward, which is basically it's the ability to basically provide for a family. And it's the ability to provide for a family in particular in three dimensions that people care a lot about and that are very important to families. One is housing, to be able to have a good house in a good place. Second is education, to be able to basically have your kids be able to have a higher level of education and greater opportunities than you yourself have. And then third is health care, to be able to actually have you and your kids and your family get taken care of when they get sick.

And the problem that we have is that, you know, I just named, like, if you ask me to rank order, like the three like industries in America that are like the most like screwed up and dysfunctional and where everything is going in the wrong direction, it's housing, it's education and it's healthcare. All right. A few points to dissect. A, Mr. Andreessen, I think, correctly and succinctly defined the things most people desire in life, housing, education, and healthcare. We're obviously focusing on housing today. And B, I also think he correctly diagnosed the cause of America's housing crisis, which is a simple supply and demand problem. We aren't building enough houses to keep up with demand. And the reality is that despite any market downturns in certain over leveraged regions due to recent interest rate rises, on average, there just isn't enough housing

to go around, especially in those high demand areas with the most job opportunities. And really, the only solution is to build. And Mr. Andreessen, I think, agrees. In 2020, he wrote a scathing blog post titled It's Time to Build, in which he blamed the public sector for failing to address challenges facing the country, including housing, writing, quote, Demonstrate that the public sector can build better hospitals, better schools, better transportation, better cities, better housing. Stop trying to protect the old, the entrenched, the irrelevant. Commit the public sector fully to the future. Milton Friedman once said that the great public sector mistake is to judge policies and programs by their intentions rather than their results. Instead of taking that as an insult, take it as a challenge. Build new things and show the results. So he's kind of challenging the public sector to step up to the plate and tackle these monumental issues facing our society. But I think he's also implying that the private sector can do a much better job, which brings us to flow.

All the money flowing into Adam Neumann's new company, Flow. The former WeWork CEO and co-founder receiving a $350 million check from venture capital firm Andreessen Horowitz. It's the largest check the firm has ever written in a funding round, according to The New York Times. That brings Flo to a billion-dollar valuation pre-launch. The business aiming to disrupt the residential real estate market by creating a product consistent with service and community features, although exact details are not known. Andreessen Horowitz was an early investor in names like Facebook and Airbnb, and co-founder

Marc Andreessen, writing in a blog post today, quote, we think it is natural that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time, their homes. Okay, there's a few interesting storylines here to address. One, Adam Neumann, the disgraced founder and former CEO of WeWork, is back. And two, why did Mr. Andreessen make such a huge investment, $350 million, the largest in his firm's history, in flow. What is the business model and could it actually contribute to solving America's housing problem? Mr. Andreessen, in a blog post announcing his

firm's investment in flow, wrote the following, quote, shelter is one of our most basic needs. In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society. When you care for people at their home and provide them with a sense of physical and financial security, you empower them to do more and build things. Solving this problem is key to increasing opportunity for everyone. Once again, he's not wrong. I think his diagnosis is correct. So what exactly is Flow and how is it going to address the issues of accessibility, affordability

and ownership? What was once one of the world's most valuable startups adored by investors worldwide, WeWork famously came crashing down. One man at the center of the downfall was Adam Newman, the founder of the co-working space who was later forced out of the business after once announcing that he'd be the world's first trillionaire. His latest venture sees him shift to residential real estate as rents in the US are rising fast, up 14% in the last 12 months alone and with house prices continuing to soar Joe Bloggs is being forced into rented accommodation. So what is Flow? That is what you're here to find out about after all. Well, at the moment,

there's little detail. The homepage for the website simply says Flow will arrive in 2023. What we do know, however, is that since leaving WeWork, Newman has been building a substantial real estate portfolio, which includes 4,000 affordable apartments across areas such as Fort Lauderdale, Miami and Nashville among others collectively worth over a billion dollars. So this has been in the pipeline for a while. Think back to the WeWork days in 2016 when WeLive, a university halls for single sociable people was being thought up. Instead of saying business units and work, we have missions.

So our first mission was create a world where people make a life. That was before we worked. We live is helping you live and not just exist. Back then, it was described as a new way of living, like a private club that anyone can join, whilst others suggested it was more of a hipster commune, a college life for grown-ups. Flow sounds similar, with affordable apartments

that also offers a community feel that could improve the lack of social interactions in what has become a more remote world. Beyond this, there's also been leaks through LinkedIn messaging that suggest Newman is also building a proprietary payment system, with a tokenized reward program and crypto payment methods which is bound to be linked to flow if these rumors do come true. It can be argued then that this is a revolutionary project within real estate thought up to break down barriers and disrupt the residential market. So to define flow at this stage, we'd say it's a transformational real estate project focused on community driven residential dwellings

where renters can slowly build equity. Or, according to the Wall Street Journal, it's a widely recognized apartment brand stocked with amenities. Are you convinced? I'm not going to go too much into Mr. Newman and his shenanigans at WeWork. There are numerous articles, documentaries, and even a dramatized series to do that. But I think it's clear that with this new real estate company, Flow, the playbook is very similar. Take something that's rather mundane, in this case, residential real estate, and envelop it with utopian language about community and connection while peppering in trendy buzzwords like innovation, blockchain, and Web3 in order to justify an astronomical valuation, but I'm not sure if it's going to solve anything. Quoting an article from Business Insider, the core problem facing renters is not the lack of branded living. It's the high prices caused by a lack of supply, poor tenant protections, and the financialization of the housing sector. There's little reason to believe Flow is seeking

to take on these problems. Instead of trying to build more housing, the company is taking over existing apartment buildings and attempting to create a premium brand to appeal to tech workers and other well-paid professional workers. Right, when we start to peel back the onion layers, it's hard for me to see how Flo is a legitimate solution to America's housing problem. Even their claim about providing a path to homeownership is somewhat dubious. The New York Times recently described rent-to-own homes as a win-win for landlords and a risk for struggling tenants, as these deals are oftentimes risky, they lack consumer protections, and may not be enforceable in some states, with most tenants walking away

with nothing, having sunk money for rent and repairs into homes they had once hoped to own. Like we covered before, Mr. Andreessen talks about this asymmetric access to housing, the lack of supply, along with Wall Street and other institutional investors outbidding regular families. Yet, the company he's investing in and touting as a solution has been buying up thousands of multi-unit housing complexes all over the country. They're not building anything. They're not adding to the supply of housing. In fact, Andreessen himself has strongly opposed the building of new multi-unit complexes in his own community. This is from the New York Post. Andresen, 51, and his wife, the philanthropist Laura Aragala Andresen, recently submitted public comment to the Atherton Town Council denouncing a plan to greenlight the construction of around 130 multifamily properties in the area, according to The Atlantic.

Quote, subject line, all caps, immensely against multifamily development. The email from the Andresasons to the council read, I am writing this letter to communicate our, once again, all caps, immense objection to the creation of multifamily overlay zones in Atherton. Please, all caps again, immediately remove all multifamily overlay zoning projects from the housing element, which will be submitted to the state in July, the couple wrote. They will, big all caps, massively decrease our home values, the quality of life of ourselves and our neighbors, and all caps, once again, immensely increase the noise, pollution, and traffic. And there it is, the quiet part out loud.

This is one of the most important points I want to get across in this segment. And that point is that Marc Andreessen, Adam Neumann, others like them, almost always correctly identify the problem. But they are incapable of actually solving it, even though they purport to want to, because the incentive structure, both from a personal and business standpoint, cannot allow them to do so. On a personal level, they hold a common nimby, not in my backyard type attitude. I want my neighborhood to stay the same. I don't want more people moving here, and I certainly don't want the value of my home to be impacted. Thus, even though they know more housing is the answer, they can't bring themselves to support such policies that can actually fix housing in America. From a business perspective,

profit-seeking firms just aren't designed to solve tragedy of the commons problems. Andreessen and Newman, they talk a lot about new technologies and efficiencies, but those are entirely self-serving considerations. Casey Berman, founder and managing partner at a prop tech venture capital firm called Camber Creek admitted recently, quote, I struggle with the theory that you can use technology to make things cheaper. The cost of the building is the cost of the building. When you reduce operating costs, how likely can you change the affordability of the asset? You change the profit of the owner. I think that's pretty accurate, don't you? I mean, I don't make predictions that often, but I will venture to say that Mr. Newman will make a lot of money from flow.

And I also predict that Mr. Andreessen's investment in flow will result in generous returns, even though I think there's a lot of people actually out there skeptical about the financial outlook of flow. I think we often forget that Newman walked away from WeWork a very rich man, and initial investors, the ones who invested prior to the later bloated valuations, also profited quite handsomely from WeWork. And that's fine, because it's their job to deliver those kinds of returns.

My point is, I think America has too long idolized the successful entrepreneur harnessing the power of capital and business to solve problems. Sometimes they do solve problems. I'm here broadcasting to you this message because someone thought it was a good idea to use the internet to broadcast yourself. But what I am saying is that if we truly care about solving the housing crisis, the solution cannot be just to turn to venture capital and other private sector businesses who do nothing more than to exploit real problems plaguing Americans and use it as marketing material for branding and for storytelling to ultimately just create value for themselves. If we truly care about increasing access to housing for everybody,

we have to actually support and pass legislation that addresses the core of that problem, such as approving more multi-unit zonings so we can build more housing, protecting the rights of tenants, and fighting back against the corporate takeover of America's housing market. That's it for me today. Thank you for listening. I hope you found this segment about flow to be helpful and informative. If you enjoyed this segment, I would definitely encourage you to check out my channel,

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