Breaking Points with Krystal and Saagar - Mini Show#23: Student Debt, CIA Spying, Prince Andrew, CNN Imploding, MNSBC Disaster, Big Weed, & More!

Episode Date: February 19, 2022

Krystal and Saagar talk about CIA spying, Biden's legal battle against student debtors, CNN imploding, Prince Andrew settlement, MSNBC ratings crash, big weed monopolies, and 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/Daily Poster: https://www.dailyposter.com/Matt Stoller: https://mattstoller.substack.com/ Learn more about your ad choices. Visit megaphone.fm/adchoicesSee omnystudio.com/listener for privacy information.

This is an iHeart Podcast. of dollars doing it. To help support our mission of making all of us hate each other less, hate the corrupt ruling class more, support the show. Become a Breaking Points premium member today, where you get to watch and listen to the entire show ad-free and uncut an hour early before everyone else. You get to hear our reactions to each other's monologues. You get to participate in weekly Ask Me Anythings, and you don't need to hear our annoying voices pitching you like I am right now. So what are you waiting for? Go to breakingpoints.com, become a premium member today, which is available in the show notes. Enjoy the show guys. Joining us now for our weekly partnership segment with the Daily Poster is Julia Rock. She is a

journalist for the Daily Poster. Guys are changing your name. I don't know if you've changed it yet. Are you the lever yet or no? Not yet. And there is a debate whether it'll be the lever or the lever. Oh, okay. I'm on the lever side. I think lever is where I'm going to go. I think lever is probably better too. That's our vote in that direction.

So you have been causing a lot of trouble. I want to full disclosure to the audience. So we recorded a segment with you about someone who was fighting to have their student debt discharged in court. That's right. And the Biden administration was fighting them on this, which is contrary to the pledges that they made on the campaign trail. But your reporting was so important that once this was revealed, the Biden administration seemed to cave. But that wasn't the end of the story. So let's put your latest story here up on the screen. Despite Pledge, Biden still fighting student debtors in court.

Your subhead there says, after public outcry, the administration backed off one bankruptcy case, but is fighting many others despite the president's campaign promise. Just bring us up to speed, Julia, with where we are now in this fight. Yeah, absolutely. So I want to clarify one thing. There are about a few dozen cases where folks have tried to have their student debt discharged in bankruptcy court that the Biden administration is fighting. The case that we originally reported on and they backed off of was one where the student debtor had actually won in bankruptcy court and the Biden administration appealed the victory. So after we reported on that, the Biden administration took out their

appeal. That happened again last week when we reported this story. There was another case where a student debtor had won in bankruptcy court to have about $100,000 worth of debt discharged. The Biden administration immediately moved to appeal the case. And after we wrote about it in this story, they dropped the appeal. It does seem like the administration is sort of changing its tack on appeals. The Washington Post wrote a very similar story to ours last week, this morning, in which the education department said it would not be pursuing appeals where student debtors were victorious. So it seems like there's been a policy shift there. However, there are still, like I said, a few dozen cases where people are trying

to have their debt discharged through bankruptcy. And, you know, the force of the education and justice departments is going up against them. Got it. Yeah. So in terms of these specific cases, I mean, what can you just explain again the role of the government in this? Like, why are they even involved? How is this even administration policy? Great question. So in bankruptcy court, if you're trying to have debt of any type discharged, you need to undergo a separate proceeding to have student debt discharged because there's a much higher legal standard. That's in part thanks to work Joe Biden did as a senator. And so if you're trying to have federal student loan debt discharged through bankruptcy court, the education department can go up against you in court and say, you know, we don't want this debt discharge. And to be clear,

in the cases we've been writing about, you have people who either can't work or are working jobs making like $10 or $12 an hour and have like over $1,000 worth of student debt. So it doesn't really seem like they're going to be able to repay it. But nonetheless, the Justice Department, you know, working on behalf of the Education Department, will depose these people, ask them about their finances, and then basically write these long briefs saying, you know, this person could pay it back. In one of the cases we wrote about, the Justice Department, this was actually under Trump, argued that a debtor had a 13-year-old child who would soon be able to work and contribute to the family income. And that was sort of the argument against bankruptcy. And that was a case where the debtor was actually victorious, but then the Biden administration appealed the victory.

So, Julia, I think this is really important, not just because the issue is very important, and it truly is, especially just given the astronomical amounts of student debt that citizens are holding right now. But because it looks like you helped to actually force a change in a positive direction from the administration. It reminds me of something we've tracked really closely here, which is because of pressure around banning members of Congress from trading stock. There actually is some movement there. And what we saw there is you had an independent journalist, Unusual Wales, who sort of made this issue a thing. Then you had some mainstream journalists who saw like, oh, I think there's some clicks and some views and some things

we can do with this. They started to write stories and do their own analyses. Then politicians start getting questions, famously Nancy Pelosi, who, you know, initially is like, well, I think we should be able to do it because of the free market. And the backlash from those comments ultimately forces a change. So it started with the independent journalists. And then it's when the mainstream media picks up on it and starts to ask questions that you really see this shift happens. I wonder if you could trace for us so we can understand how this worked, what the timeline looked like, what were your initial interactions with the administration like so that we can use this as a kind of a model for hopefully future change? Absolutely. So we published the first

story a couple of weeks ago now, writing basically about this case where the debtor had been victorious and then the Biden administration appealed. And we asked the education department for comment. And I think they said like, oh, we'll be able to give you comment like two days after whatever deadline we had given them. So it didn't seem like it was really on their radar. So we published the story and, you know, a lot of these groups working on student debt forgiveness, bankruptcy really ran with it. I think, you know, it is important that like they were already pretty organized around this issue. So a story was able to like actually prompt a reaction. And the administration sort of surprisingly withdrew the appeal. After that, a couple of mainstream reporters or, you know, corporate media reporters, I guess,

asked at White House press briefings about the dropped appeals. Biden's press secretary was asked twice about our reporting on these cases. And then, you know, it was picked up by some more mainstream outlets like Business Insider and now The Washington Post. And so I think something about like, you know, prompting a little bit of a PR crisis, you know, corporate media people sort of paying attention to it, maybe because of how much attention it was getting. I'm not exactly sure why they jumped on it. And then getting on the radar of the Biden administration, you know, now, of course, like the education department will return our calls. So that's sort of how it happened. Well, congratulations. We've seen a lot of these types of episodes.

So look, keep it up. And that's why we're very proud to have you guys on the show and be partners with you. So thank you, Julia. Yeah, and that's why, guys, if you're able to support the work they're doing over at The Daily Poster, I mean, this is proof positive for why it is very much a worthwhile investment. Julia, thank you so much for breaking this all down for us. Thanks, Julia. Thanks so much. Our pleasure. Thank you guys so much for watching. We're going to have more good stuff for

you later. There's a story that's come out that we really want you to keep an eye on because details right now are scarce, but extraordinarily troubling. Let's go ahead and throw this tear sheet up on the screen from the Washington Post. According to two senators, the CIA has a secret program that collects American data. This is above and beyond the things that we already knew about the CIA. Here's the lead of this story. And this is why the details right now are still very scarce, but incredibly troubling. The CIA has a secret undisclosed data repository that includes information collected about Americans. Two Democrats on the Senate Intel Committee said while neither the agency nor lawmakers would disclose specifics about the data,

the senators alleged the CIA had long hidden details about the program from the public and from Congress. Wyden and Heinrich both said the program operated, quote, outside the statutory framework that Congress and the public believe govern this collection. So what they're alleging here is just basic lawlessness from the CIA, where the public thinks, OK, there are rules, there are laws that are governing your behavior. We learned about your bad deeds. That's been dealt with in certain respects. What what Wyden and Heinrich here are saying is that they are continuing to collect and maintain data from U.S. individuals that falls outside of what the public knows about and even outside of what Congress knows about. Now, the CIA, of course, they're pushing back.

They say the programs were classified to stop advertisers from compromising them. They say that they're only collecting information about foreign governments and foreign nationals and that the only collection of U.S. individuals is, quote, unquote, incidental. Oh, I've never heard that before. Exactly. Like, tell me if you've heard that before. And part of what makes this so eyebrow-raising is that Wyden has been incredibly prescient in the past and has been one of the better advocates on civil liberties in Congress, you'll recall, back in 2013. He asked then-DNI James Clapper if the NSA collected, quote, any type of data at all on millions or hundreds of millions of Americans. Clapper initially responded, no.

He later said, not wittingly. That turned out to be a complete and total lie, as, of course, the leaks from Edward Snowden would ultimately reveal. So Wyden once again sounding the alarm that there is a legal data collection of Americans occurring and being maintained by the CIA, although we have few details right now. I think you're right. And this is what's fascinating. And I think we should also establish the credibility of Senator Wyden. He is one of those people, like you said, back in the Snowden crisis, who tried to get the DNI and the CIA to admit the truth, even though he knew they were lying. He could not say anything because he himself was constrained by classified information. This letter was sent back in April, but it was

classified up until now, months and months later. The CIA obviously preparing a lot of their response. It also just goes to show you how they can control the narrative, Crystal, because you wait eight, what, 10 months in order for the release of this letter. They have everything, all their ducks in a row and say, oh no, this is actually what happened. Possibly they can even stop it if they wanted to. And they can destroy a lot of the evidence also if they want to about what was happening. And because of secrecy laws, you and I are not hearing anything real about any of this. And that's the scary part. Look, we have known since the Snowden leaks that NSA, quote unquote, incidental collection is anything but incidental. They claim it's anonymized. It's not anonymized. They claim

that if a US citizen's, this is what we learned during the FISA warrant thing under Trump, right? Which is that if a US citizen has their communications incidentally collected, that the NSA very much has the power in order to unmask you. And that the power of unmasking can be requested by the simple request of somebody like Samantha Power, the U.S. ambassador to the United Nations, the national security advisor without any real process put in place by Congress, by a judge. Your rights and your communications in the digital age and the communications with foreign nationals are very much up for grabs by these people. And it very much just also violates their mandate. They are not supposed to operate here on U.S. soil. The church committee and all that, the previous investigations made it so we tried to put an end to this, but it looks very much so like they're back to their old ways. The history of this agency is a history of lawlessness. I mean, that really has been

fairly consistently the case from the very early days when they were freelancing on operations during the Cold War that even the presidents didn't have full understanding or awareness of what was ultimately going on. You know, the deep state has been now claimed by the right, but this is a term that has long been understood by the left, to be these entrenched bureaucracies of people who last way longer than the presidents do and ultimately, in a lot of instances, exercise a lot more power and a lot more latitude with the actions that they ultimately undertake. So this is just the latest instance where this agency feels like they don't have to comply with the law, that they don't have to

inform the public about what they're doing, that they don't have to inform Congress about the specifics of what they are doing. And as was shown by Wyden and by Edward Snowden, ultimately, they're completely willing to just directly lie to Congress when asked a question that is uncomfortable for them and will expose their lawbreaking and their wrongdoing. So this is one to really keep an eye on and just also to serve as a reminder for what a terrible actor this agency has been, both with regards to American citizens, but also obviously around the world. Yeah, that's right. All right, guys, thanks so much for watching. We're going to have more for you later. There's continuing to be a lot of shenanigans over at CNN. Major fallout

from the resignation of former President Jeff Zucker. Let's go ahead and put this up there on the screen. What you see here, the headline from the Wall Street Journal, clashing executives, office romance, angry anchors inside the week that shook CNN. And I don't think we can beat this enough, Crystal, which is that the central critique inside CNN, which is slavishly loyal to Jeff Zucker, is that Zucker did not deserve to lose his job. And yet inside this Wall Street Journal piece, we learn about the office romance of Zucker was conducting, not even the worst thing he was doing, the fact that his mistress, and who he hired then as the number two of the network, used to work for Andrew Cuomo, that they helped draft statements for Andrew Cuomo, they helped recruit Cuomo to appear on his brother's show. And then when it all came and said and done, then they tried to blame it all Cuomo, Chris Cuomo, and fire him as the ensuing crisis happened. And the chief complaint from the so-called journalists inside of CNN is they did Zucker dirty because they fired him for flagrantly violating any journalistic principle because he protected their asses whenever they were going to get fired by their parent company, AT&T.

And this has far-reaching consequences because their new leadership discovery, actually the merger was just approved, in order to take over the company. And we'll see how long exactly that takes. They're not happy with any of this at all. They don't like the press. They don't like the product. One of their original investors and creators of CNN has openly said, I think they should go back to reporting straight news. And that's an's perspective, you know, his sort of lawyer's position is, first of all, dude, you, Jeff Zucker, knew everything that was going on here. Which I believe. I actually believe that.

Don't play like you had no idea. Oh, how could he be consulting with his brother? You were well aware of everything that was going on. So let's not play Pollyanna. And number two, that you and your mistress, Alison Gollis, were also involved in advising Governor Cuomo, in particular, the allegation that has come out is that he was giving talking points to Cuomo during his, you know, COVID briefings on how to push back on Donald Trump. And that media story, you will remember those times, the times of the Cuomo sexual, that media story that pit Governor Cuomo against Trump and he was the real president that millions of Americans are looking to, CNN profited off of that more than anyone because they did get these exclusive interviews with him, with Chris Cuomo. So

Chris Cuomo's standing back and going, all right, I got fired, but you're sitting pretty here. I'm losing my millions and you're sitting pretty here when we were part of this whole conspiracy that worked out very nicely for CNN. So that's one piece of it. The other piece is this internal sort of battle for power between Jason Kyler, who ultimately is the one who

axes Jeff Zucker and gets in the power position, axes Zucker. He had already taken some of his responsibilities away from him, including on the communications over communications at CNN, which was headed up by Alison Gallis, who was his mistress. So there was that jockeying. And once Kyler gets the upper hand here with what comes out in the investigation of Cuomo, he's able to axe Zucker. Then you have the anchors who are melting down, not because all of this tawdry corruption is exposed, which reflects very poorly on them and their own reputations. No, they're upset that their guy, their patron, is given the ax.

And then the part that really makes this also very interesting from a business perspective is that Zucker was the person who was spearheading what appears to be the disastrous development of CNN+. Yes. So he's intimately involved in picking the talent. He does the Chris Wallace deal. The big hire. All of the, yes, a big hire, that big get of Chris Wallace, all of the thinking and the strategy behind CNN Plus.

That was all coming from Zucker. Apparently, according to the Wall Street Journal report, he asked for permission to stay until the deal with Discovery was closed. He then asked to just finish out the week and Kyler wouldn't let him do even that. So that shows you some of the power plays. And then we have from the Hollywood Reporter, we can put this up on the screen, that now there is an entire rethink of the CNN Plus strategy writ large. Here's the quote, weeks before it even launches, CNN streaming service, CNN Plus is writ large. Here's the quote. It says, weeks before it even launches, CNN streaming service, CNN Plus, is contemplating a strategic pivot that Zucker was closely involved in prepping CNN Plus,

but now the forthcoming services strategy and future as a standalone platform is in doubt with new ownership expected soon. So chaos all the way around. You just, you know, you hate to see it. What's funny is that Zucker wanted to create CNN Plus as its own standalone product. And that's what we always have been making fun of here,

endlessly. And I've actually been told, our tweets and our coverage has been getting noticed in some higher places on CNN Plus where some people are very upset. Look, sucks to suck. I don't know what to tell you, you know? I mean, their vision was that CNN was such a valuable brand, they were going to create a standalone streaming service within it only for CNN. Didn't make any sense. The most

valuable part of CNN is live pictures. The talent is actually awful. That's why people don't trust it anymore. So they were doubling down on talent without any of the value. Go figure. Okay, good luck. But now, I'm not the only person who sees this. The new CEO of Discovery, David Zaslav, apparently he sees it quite well. And they are thinking now, per The Hollywood Reporter, yeah, maybe we're going to scale this thing back significantly and bundle it with a bunch of other Warner products.

Which means that now, CNN Plus won't be the standalone service that they wanted to, the streaming news juggernaut. It'll just be a fake offering like they have Peacock with those ridiculous Mady Haas and Zerlina Maxwell shows, which nobody watches. So that is the ultimate goal and end result of likely to see what CNN Plus. I think it would have ended up there anyway. But now they're actually going to skip the $100 million boondoggle part where they're going to try and launch it standalone. So big mistake for anybody who thought they were making a good move by going into CNN+. Chris, I hope the cash was worth it.

It is probably the last that we've heard your name for quite some time. Yeah. Somebody is realizing that CNN is going to be unable to stand alone. And so this goes also to your prediction that, you know, the way that they'll succeed, because it will never be admitted to be a failure. Exactly. Is they'll package it with other things that people actually do want and are willing to pay for. Like movies, you know, things that are entertaining.

Yes, exactly. And then you never have any sort of public numbers on how many people are actually watching. Because, yeah, I mean, it's just the people they picked here have no ability to bring in their own audience. There's nothing there that, I mean, listen, we can always be proved wrong. Maybe there's some runaway hit there, a cooking show or whatever. But they also have this sort of like weird mix of Chris Wallace, and then they're also trying to recapture like the Anthony Bourdain thing with some cooking shows.

They're giving Don Lemon a talk show. Sanjay Gupta is going to teach mini medical class. God, Sanjay, what are you doing? So anyway, somebody is looking at all of this now that Zucker's gone and going, I think we may need to pivot. We may need to rethink this whole thing. Pivot out. Ain't working. There you go. All right. All right, guys.

Thanks for watching. We're going to have more for you later. Some major news on Jeffrey Epstein, Prince Andrew, Virginia Gouffre that we want to keep you guys updated on. So let's go ahead and put this up there on the screen. Prince Andrew has settled a case with Virginia Gouffre here in the United States in a civil claim in New York State. Unfortunately, Crystal, this was the case that he fought hard against in order to claim that he didn't have jurisdiction over him, that he dodged subpoenas on. I'm personally very, very, frankly, sad about this outcome because this was the last real chance that we had with Virginia Gouffre, a prominent

Epstein accuser, and had accused Andrew. I mean, you could see that photo for yourself. He definitely knew who she was despite his claims. Otherwise, in open court to have some of this actual information come out, Epstein's most powerful connections all the way up to have some of this actual information come out. Epstein's most powerful connections all the way up to the heart of the monarchy. But, and this is per the Daily Mail, it looks like the queen is going to have to pay a part of the 12 million pounds that allegedly leaked of what Andrew is going to have to pay Virginia Gouffre. And partially, she's doing so because her Jubilee celebration is coming up for, I think, her 60 years

on the throne, and that she is going to be banning him from this. Remember that he already, Queen already stripped him of all of his titles, saying he would contest this case as a private citizen. She took him away from all of his public duties, but frankly found this such embarrassing of a case and also possibly to cover up some of the information that she herself is going to be paying for some of this settlement. So it's a disappointing outcome. I mean, look, Virginia, like, you know, you've been through a lot, you know, we've supported you 100% of the way, but this really was our last chance in open court at exposing Epstein and the most powerful people in the world. First of all, I always want to make sure we get our monarchy facts right. The Jubilee actually marks 70 years of service to the people. I'm sorry to her majesty. I'm a huge fan of the

Queen. I know you are. That was coming up this summer. Right. And the other thing that was happening is we were right at the point where the depositions were about to start. Yeah, exactly. So there was a lot of pressure put on to come to this settlement so that it didn't mess up the jubilee and so that also, you know, none of these depositions and the discovery process would even really get going. I mean, just to be clear, Virginia Gouffray doesn't owe anyone anything other than to do what's the best for herself. And so certainly do not begrudge her. But yeah, it is disappointing to not ever have those depositions. The Ghislaine Maxwell trial ended. Same thing. And we learned very little.

She was found guilty. Yeah. But because of the strategy of the prosecution, they went after this very narrow case to just try to prove the bare bones facts needed to find her guilty, did not open up, you know, the wider lens to who was involved and what did this whole pyramid scheme of sex trafficking and abuse, what did it actually look like, who enabled it, and all of those things. Meanwhile, Lex Wexner feels free enough to start making major contributions again to the Republican Party. They apparently are happy to accept those contributions from the man who was most instrumental. We don't know all the details, but we know he was most instrumental in floating and supporting Jeffrey Epstein's high lifestyle, selling him at way less than market value, that mansion, infamous mansion in New York City and Manhattan. So, yeah, I mean, it feels like this was maybe the last chance to have a little bit of a wider accountability and view into what was really going on here and who all was implicated. And now it is off the table. So

it's impossible to not feel disappointed about that. I was listening to a BBC analysis of what this means for the royal family. First of all, they said, this person said, you know, they think that there has been significant reputational damage, especially among younger Brits. Right. That Prince Andrew is never going to be welcomed back in. I mean, he's had all his titles stripped and that's a done deal. Brit taxpayers should not even be paying for this man's security. Yeah. To be clear.

Yes, agreed. Yeah. But yeah, that this came down to the timing of the Jubilee and wanting to sort of get it off the table before that all occurred. Sweep it under the rug as best they can

at this point. Yeah, look, I mean, it makes me sad. I feel for the Queen. I mean, her husband just died and this is what

she got to deal with? Yeah. This is terrible. Like first, what a horrible son. But second, it's a terrible example of how even when they get caught, they can still buy

people off. And like, I get it, you know, Virginia, like you don't owe us anything, but it's just to see how much power they wield and continue to keep their secrets. It's disappointing. And it's really the last chance. This pretty much is it. They tied a bow on the Maxwell case. They tie a bow on this one. And a lot of it's probably just never going to come out. A lot of criminals out there who are sleeping easier tonight. And that is a sad state of affairs. It's very sad. All right, guys, thanks so much for watching. We're going to have more for you later. All right, guys, we have a little update for you about how things are going over there for our friends at MSNBC. Let's go ahead and throw this tear sheet up on the screen. So we have been tracking what is a monumental shift at that network. So their star, by far their biggest star, Rachel Maddow, taking a step back from her show. She's on a temporary hiatus right now. She's

expected to return. But, you know, the longer term prospects for her show, very much up in the air. Her new contract that she negotiated says she's not doing the daily show anymore. And MSNBC does not have anyone who is even close to being able to replace her, which is what this tear sheet ultimately reveals. It is costing MSNBC in primetime ratings massively. They say the network's marquee 9 p.m. program lost nearly 30 percent of its audience in the key 25 to 54 demo on Monday, the second day of Maddow's weeks long hiatus. According to the latest Nielsen figures, it was Ali Velshi who was in the chair filling in for her. And I think they've had a rotating cast of anchors to try to fill in for Rachel while she is gone. That episode on that Monday garnered an average of 201,000 viewers in the demo. That is a disaster. But I was also surprised. So for comparison, the total viewership for the evening was 1.6 million, far below the 2.78 million from Fox's Hannity that won

the night. But even when Rachel is there, those numbers in the key demo are not that strong. But 200,000, like barely breaking into 200,000 viewers in the key demo for your number one show, I can't even tell you how bad that is. I mean, just so you guys know, we easily swamp that. All of our every show in the key demo in terms of our daily viewers. And that's why, you know, ultimately it's actually a lot more valuable than a lot of these legacy media products, but it's down 30% crystal, 29% compared to the Monday of the prior week, whenever Matto was still hosting. And even in their total viewership, it was only 1.6 million, which was a million less than what Sean Hannity was doing at the time. So this is a total catastrophe.

Now, look, you can have solace in this. They're still beating CNN. Even MSNBC is double the 600,000 that tuned into the CNN broadcast. But we both called this. I mean, we were like, look, this is an extinction-level event for them. They're dead. Because you look at this. Maddow was the last thing they had.

It was Russiagate. She didn't want to do the nightly show anymore. And do not blame her. That must be a hell of a lot of work. She's done it for a long time, too. She's done it for a long time. She's older. She's got a wife.

And, you know, God bless. I hope you're happy. But the point is from MSNBC's perspective, they have no talent, none, no bench that can fill in and compete. And they're already, their numbers in the key demo were bad. They have nobody that they could possibly, uh, hire who could appeal to younger people because to do so would be an indictment of all of their coverage and all of their network and their core base that now they can't lose. It's total freefall. They better get on their knees and pray that Trump runs again. That's the only person who could save these people. They've always had this issue of part of why Fox is such a juggernaut is because conservatives don't trust any other outlet. Yeah, that's true. So they feel like Fox News is the only place we can go on television where we're going to see our

views represented. And so they have basically like half the country to themselves, whereas liberals, they trust ABC, they trust NBC, they trust CBS, they trust NPR, they trust CNN, they trust MSNBC. So they have sort of a structural issue where their core audience has a whole array of options that they find to be palatable and worthy. And then when you couple on top of that, the fact that their programming is just boring. Like the answer to every question is Trump is bad. At a certain point, people are like, all right, what else you got? And then it's happening in like Ukraine, especially right, especially when you do have before Trump came along, they were totally hosed. Their ratings were complete trash and they had no idea what to do about it.

Trump comes along and kind of saves them. But since they have so closely aligned themselves with this Democratic, not just the left broadly, but with like this Democratic establishment, pure party, partisan politics. Joanne Reid, I think, is like the perfect example. Yeah, bringing in like, you know, I mean, remember when Chris Matthews was during the primary talking about he was worried about getting rounded up in Central Park and executed if Bernie Sanders wins? Like, so, I mean, they've really leaned hard into this establishment corporate version of the Democratic Party that obviously has, like, no support among younger generations anyway. So their one person that people show up for is Rachel Maddow with the like, you know, Russiagate conspiracy hour with her not there. They don't have there's no one else there who has a brand that actually pulls in viewers. It's not the same as, you know, independent media. You have to be able to like draw people in. You don't just get to benefit from whoever was in the

chair before you in this larger structure. Rachel's really the only person that they have that has her own kind of center of gravity. And so you can see the minute she steps away, they lose a third of the audience. There you go. Sorry, MSNBC. I'm going to enjoy watching this fail. All right, guys. Thanks for watching.

We'll have more for you later. Hi. I'm going to enjoy watching this fail. All right, guys, thanks for watching. We'll have more for you later. Hi, I'm Matt Stoller, and welcome to another Big Breakdown. So I'm a policy advocate and a writer, and I study the economy. And the goal of these videos is to teach you how parts of the economy work and how we write laws to structure those parts of the economy, to structure markets. So today we're going to talk about pot, marijuana. And I have an interview with someone who actually writes laws to structure marijuana markets. All right, so in 1933, the American government ratified the 21st Amendment to the Constitution, which formally ended the prohibition of alcohol. Just a few years later, in 1937, we made marijuana illegal, so we replaced one form of prohibition

with another. Now since then, being tough on drugs has been as American as apple pie. America's public enemy number one in the United States is drug abuse. In order to fight and defeat this enemy, it is necessary to wage a new all-out offensive. I've asked the Congress to provide the legislative authority and the funds to fuel this kind of an offensive. But this hostility to illegal drugs has slowly waned in the last 20 years. 19 states have legalized pot completely. 37 have made medicinal marijuana legal. But as late as 10 years ago, the drug war sentiment was still quite strong, places like Congress and among our political elites. So, for instance, in 2011, Republican House Speaker John Boehner said, quote,

I am unalterably opposed to the legalization of marijuana or any other FDA Schedule 1 drug. Standard drug warrior. But Boehner and other politicians were fighting a losing battle on America's second prohibition. The question today, maybe even a few years ago, was no longer whether pot will become legal. It's now when and how. Now, one way we know that is to listen to the same politicians who were formerly so tough on drugs and how they've now become ardent supporters of legalizing marijuana. So starting a few years ago, a bunch of them. Former Senate Majority Leader Tom Daschle, former Congressman Dana Rohrabacher, former House Leader, former Congressman Joe Crowley.

They suddenly changed their boomer mindset, as did, surprise, surprise, John Boehner himself. Like most Americans over the last 10 years, people's opinion on this issue have evolved. And I felt myself, like any other American, my position evolving over the years, but never really thought much about it until Kevin and I began conversations four, five, six months ago. And I thought to myself, you know, this might be something that I could lend my voice to that makes sense. And the fact that you're joining the board, does that mean now you see a path in which either state regulations spread like wildfire or the federal level begins to embrace this instead of reject it?

Now, if you want to legalize pot, which most people do, you'll see this is a good thing. But what's far more important at this point is to understand exactly why once powerful politicians like Boehner are suddenly speaking out. And that has to do with another kind of green that we are all too familiar with in our political system. Money. Now, last year, sales of legal marijuana were at least $17.5 billion, which is, give or take, about $50 for every man, woman, and child in America. It's a big industry. And the money that pot generates is part of the pitch that men like Boehner are making for legalization.

When I'm talking to politicians, cannabis jobs are a major selling point. But so is the tax revenue. Colorado, perfect example. Since 2014, they've collected in the neighborhood of $815 million in tax revenue from cannabis. That's not $815 million in sales. They're ringing up billions there. That's $815 million in just tax revenue. Colorado poured that money

into infrastructure projects, plugging holes in budgets, health care. Heck, $21 million was handed to law enforcement. The police are using cannabis tax dollars to keep the streets safe. And the biggest chunk of this cash, $200 million, has gone toward building new schools. Out in Deer Trail, Colorado, there was an elementary school that was falling apart. Sewage leak in the locker room. Saloon pool wasn't safe. School doors wouldn't lock. But corporate advocates of pot aren't really concerned about money for schools. Former high-level politicians like John Boehner don't just become spokesmen for large industries for free. In a piece a few years ago on why

Boehner changed his tune on pot, why he was speaking out, the New York Times showed that Boehner held a large stake in a $3 billion corporation then being sold to the biggest cannabis holding company in the world, Canopy Growth, to create an $18 billion monster. Buried deep in a financial filing from November 14th, 2018, is Akerage's disclosure, Akerage is the company that Boehner was representing, Akerage's disclosure that the two men each held 625,000 shares in the company, which if sold after the company sailed the canopy, would net them a fortune. And behind Boehner are billions of dollars of investment, with the goal of building out an industry that could reach over $100 billion domestically and

a trillion dollars worldwide. Still, this leaves open the question of where the money's going to go and who will receive it. What's the business model? Pot is not like semiconductors or even cigarettes. It's easy to grow, which means that it's hard to maintain high profits. If you charge too much, someone else can just come to the market and undersell you. Consumers can even grow their own. The answer to how to keep profits and prevent competition in the market is monopoly. Now, here's an excerpt of a presentation a few years ago at the American Cannabis Summit Countdown to Legalization. Now, here's an excerpt of a presentation a few years ago at the American Cannabis Summit Countdown to Legalization. Now, I really like this excerpt because it hits that

sweet spot between boring and creepy that all great corporate sales pitches seemingly have. It'll give you a sense of just how investors and salesmen like Boehner are thinking about cannabis. The first phase is a free-for-all. There are tons of startups and small firms. New players are constantly entering the market. Nobody has giant market share. No clear winners yet. Phase two, that's where we see massive consolidation.

Smaller companies start merging. Bigger companies acquire smaller ones. Phase three, that's where the mega deals happen. The big guys start merging with each other. We've seen plenty of these deals eclipse $100 billion. Then phase four is where the action slows down. You have just a handful of big players in an industry. This is the blue chip stock phase.

John, where do you think cannabis falls on this timeline? We're in a sweet spot right now. Cannabis is nearing the end of phase one, and here's where it gets me really excited. John, where do you think cannabis falls on this timeline? We're in a sweet spot right now. Cannabis is nearing the end of phase one, and here's where it gets me really excited. We're starting to see those red blinking lights signaling this industry is about to jump into phase two with a bang. Rapid consolidation could lead to rapid profits for those who strike now. The writing's on the wall. Scott's Miracle-Gro, the boring fertilizer company, they were one of the first movers.

Their CEO declared that cannabis was the biggest thing he'd ever seen. Initially, he committed to investing $500 million in the sector. But then he starts buying cannabis companies, and he can't stop. Hydroponics and lighting companies, companies that sell soil to cannabis farmers. He's already cut checks totaling $705 million. Scott's Miracle-Gro isn't the only household name eyeing the cannabis market. Johnson & Johnson is linked up with two small firms. Coca-Cola is talking about making cannabis infused beverages. I was on the board of a major tobacco company, Reynolds. You think big tobacco is staying on the sidelines?

I've talked to these guys. They're going to sit this one out. And they have the dollars to acquire whoever they want. We're just beginning to see some action in this space. Imperial Brands, makers of Kool and Winston cigarettes, they invested in a medical marijuana research firm in the UK. We can't forget the alcohol companies. On August 1st, Molson Corp has announced they are partnering with Hexacorp to create cannabis-infused beverages. But again, it's not that easy to create a monopoly around marijuana because it's a weed that grows, you know, you can grow it anywhere. Now, sure, you can put marijuana into consumer products, you make it easy to vape. There are markets for ancillary supplies to grow it, and all of these things have some barriers to entry. But the competitive threat of new entrants is always there. A lot of people know how to grow it already. So what's the plan? Well, they'll put cash into lobbying. Right now,

the big weed companies are trying to get states to legally restrict competition so they can build and protect market power. In other words, they'll use the law to give themselves monopoly. Now, take Curaleaf and Green Thumb Industries, two of the biggest cannabis corporations. Now, here's what they're telling investors. Curaleaf says that it, quote, maintains an operational footprint of primarily limited licensed states with natural high barriers to entry and limited market participants, end quote. Now, that's an annoying corporate-speak way of saying they want monopoly power. Green Thumb Industries says it is seeking to operate in, quote, limited supply markets, end quote.

That's a slightly shorter but equally annoying way of saying the same thing. In fact, Green Thumb's CEO told shareholders in one letter that, quote, every day is day one at green thumb. Now, if this sounds familiar, it should. It's because it's Amazon founder Jeff Bezos himself coined that phrase to describe his own firm, saying that at Amazon, it's, quote, always day one. And what he meant was Amazon employees should always be aggressive at seizing market power and crushing rivals and suppliers, as well as extracting tax concessions from cities and states who do business with them. So the weed executives now behind legalization are taking their inspiration, in fact plagiarizing

the slogan from perhaps the most aggressive monopolist in the world. But it's not all bad news. It's early. In fact, mostly it's good news. We're right now transitioning from illegal markets in marijuana to legal markets. It's very similar to what happened after the end of prohibition of alcohol that I mentioned at the top. Like alcohol, it's going to be regulated or it's regulated right now at a state level.

Now, because of alcohol, it's in the 21st Amendment to the Constitution. It says it's got to be regulated at a state level. But pot is a little different, the legal framework. Since pot is illegal at a federal level, but legal in some states, it's the states themselves that regulate it. And naturally, different states have chosen different models to organize these markets. So Oklahoma, for example, has 12,000 new weed businesses because of its particular regulatory model that allows competition by small firms. By contrast, Virginia handed out monopoly licenses, so there are fewer businesses. Now, it's an exciting time for cannabis because these are new markets, and so the rules are still being set. And how we structure these markets is very

much up in the air. So what are the tricks that would-be monopolists are playing to game these markets in their favor? And how should states regulate their markets to best ensure competition? To answer these questions, I turn to an anti-monopolist and marijuana expert, Shaleen Teitel. Shaleen is a drug policy attorney and a fellow at the Drug Enforcement and Policy Center. She's actually written laws in Massachusetts to structure marijuana markets in a way that protects small producers and retailers. And now she thinks about the problem more broadly. So Shaleen, what are some of the tricks that the big weed monopolists are trying to use to gain and maintain market power? So I'd say the biggest trick is looking for limited licensing market structures. So going into a state and saying, in order to keep this under control, you should only have 15 or 20 licenses to make and sell marijuana throughout the whole state. will lobby to get themselves, usually because they're already in the medical market, early

access to sell cannabis. And then they'll do the same thing at the city level. So at the city level, they'll say you should only have two or three cannabis stores in this whole city. And here's why they should go to us. So which states have been pro-monopoly on weed legislation and which states haven't? So I'd say Florida is one of the worst. But in general, the East Coast has kind of been worse because the West Coast legalized cannabis first. And it was kind of before it was clear how profitable it was going to be. And so you didn't have as many big companies involved or lobbying. But on the East Coast, you see companies really lobbying for these kind of oligopolistic market structures. I'd say some of the best are Washington, Oregon, and then Massachusetts is a unique one because even though we're on the East Coast, we did put a lot of work into ensuring that no company can dominate the market.

You can't have more than three stores, for example. And we also invested a lot into making sure that we were reading contracts and making sure that what was happening in real life was the same as what was happening on paper. What are the possible health consequences of consolidation? So I've been a advocate for legalizing marijuana for over 20 years. So I understand the benefits. But the concern is when you look at tobacco or alcohol or pharma, when you have profits that are a primary concern

and you have companies that are so big that it becomes difficult to regulate them, then you see a incentive to make more people use your products and to worry more about your own profits than their health. And so there's nothing unique about cannabis that could prevent, for example, the products from being manipulated to be more addictive or advertising that's targeted to children or any of these other strategies that we've seen, frankly, in other industries like tobacco. What should states do when writing laws to create a healthy market structure? So in Massachusetts, we did two things. We tried to make a fair market that was accessible for small businesses in general. And then we tried to give particular advantages to the communities that

have been most harmed by the war on drugs. But you can't really do one of those things without the other. Then we also tried to control the market from being dominated by limiting how many licenses one particular business or person can own. And then we paid attention even outside of cannabis businesses, because for example, with delivery, there could be an app or a tech company, there could be an app or a tech company that could dominate delivery and then control the cannabis delivery market. So we were very clear that no tech company could share in the profits or own in a cannabis company. And they also have to make sure the transactions are arm's length and fair so that you couldn't promote a cannabis company on your app just

because they're paying you. Now, it's still illegal at a federal level. So how should the federal government legalize marijuana? I think the key is to be really slow and deliberate at the federal level. I think history and literature are full of examples of something that was started with so much optimism and love and then quickly became out of control like Frankenstein. And I think we might be headed there with federal legalization if we don't stop and understand the market and make sure that we're legalizing it in a way that is intentional and deliberate. So, for example, I would not jump straight into

interstate commerce. I think that we need to understand there are a lot of big companies that are waiting in the wings that have not entered the market yet because they don't want to put their other businesses at risk. But once federal legalization happens, interstate commerce is allowed, banking is allowed, we really have no way of predicting what it will look like and how fast consolidation will happen. So I think taking it one step at a time, allowing states to continue their current markets, perhaps that are just within the state borders, is a good idea. And just being careful that we don't go so fast. We have results we can't take back. Shaleen, last question. So you've been doing this for 20 years. How's it going? Is Big Weed effective at lobbying? Are you optimistic

about the possibilities for this market? I'm very optimistic. Up to 90% of people now support the legal use of cannabis in some form. And at the same time, big weed is not very effective, even though big cannabis companies have hired former officials like John Boehner. They haven't been very successful. We haven't seen even one federal bill voted on by all of Congress yet. And so I think we have some time to do this deliberately. And I think that it can be, for once, a policy that is determined by the people and not by big corporations. Thank you.

And that was Shaleen Teitel on setting up markets for marijuana. You know, it's an interesting moment where cannabis activists are the ones saying go slow, while previous hardcore drug warriors like John Boehner want legalization now so that companies they are set up to rake in cash from can set up monopolies in this new industry. At any rate, if you take one thing away from this big breakdown,

it's that there's no such thing as an entirely free market. Markets are public institutions, and someone always writes the rules. 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 Focus newsletter, Big. And remember, how we do business is how we do justice in America. Thanks. This is an iHeart Podcast.