The Young Turks - New Digs

Episode Date: April 6, 2023

Episode summary: Jamie Dimon says regulations stoked banking turmoil. Pentagon swoops in to financially assist tech companies as regional banks fail. More Perfect Union uncovers the origins of Iowa's extreme child labor bill, which would allow kids as young as 14 to work in meatpacking and construction. Filings reveal Amazon spent over $14 million to bust union in 2022 alone. HOST: Ana Kasparian (@AnaKasparian) SUBSCRIBE on YOUTUBE: ☞ https://www.youtube.com/user/theyoungturks FACEBOOK: ☞ https://www.facebook.com/theyoungturks TWITTER: ☞ https://www.twitter.com/theyoungturks INSTAGRAM: ☞ https://www.instagram.com/theyoungturks TIKTOK: ☞ https://www.tiktok.com/@theyoungturks 👕 Merch: https://shoptyt.com Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to The Young Turks, the online news show. Make sure to follow and rate our show with not one, not two, not three, not four, but five stars. You're awesome. Thank you. Woo! It's up! Welcome to TYT. I'm your host Anna Kasparian. Jank is out for the remainder of the week. He's been out all week, but he will be back next week. We have a great show ahead for you, though. We are going to do a solo first hour where I will not talk about Donald Trump, but really focus heavily on economic related news, including Jamie Diamond's latest shareholder letter and how he sneakily tries to call for more deregulation of the banking industry. One of my favorite stories of the day, we'll talk about that in great detail. Later in the show, in the second hour, we'll also discuss some of the big wins for progressives, including

An incredibly important Supreme Court win in the state of Wisconsin and also a mayoral win for the progressive candidates in Chicago. So actually a lot of good news in the second hour today. We'll also lighten things up quite a bit with a conversation about work spouses. Are they acceptable or not? John Iderola will join me on that discussion and we will adjudicate. As always, just want to encourage you guys to like and share the stream. if you haven't done so already, and if you are interested, you can become a member by going to t-y-t.com slash join or click on that join button. Members get exclusive, members-only content,

in addition to keeping us free of any corporate sponsor influence. And we really appreciate you for that. You guys give us a voice and I'll always be grateful for it. Without further ado, let's talk a little bit about what Jamie Diamond's up to. You've got to hand it to Wall Street, spinning the Silicon Valley bank collapse as an opportunity for more deregulation. That's what J.P. Morgan Chase CEO Jamie Diamond did in his annual letter to shareholders. To be fair, Diamond's letter included some kernels of truth before devolving into the typical anti-regulation whining you would expect from the CEO of the largest bank in the country. Diamond rightly criticized the mismanagement of Silicon Valley Bank by emphasizing how they, you know,

concentrated their client base and some of their investments in the tech sector. He was right about that. He also wrote, quote, ironically, banks were incentivized to own very safe government securities because they were considered highly liquid by regulators. And you know what, that's actually true too. And maybe regulators shouldn't include investments that could lose value when interest rates rise as highly liquid. In fact, the decision by Silicon Valley Bank to invest its assets in long-term treasuries proved to be a pretty bad idea. As the Federal Reserve raised interest rates, the value of those treasuries took a hit and were worth less.

So when Silicon Valley Bank started selling treasuries in order to fulfill depositor withdrawals, they suffered a $1.8 billion loss. And as you can imagine, that triggered panic among SVB clients who then staged one of the largest bank runs in United States history. Soon depositors tried to withdraw $42 billion in a single day. By the next morning, I mean, we all know what happened. Silicon Valley banks collapsed and the federal regulators took control. Now, had there been more oversight to ensure that Silicon Valley Bank diversified its investments and client base, the collapse could have been prevented.

But that is not Jamie Diamond's takeaway. He seems to be calling for less, not more regulation. But weirdly enough, he stops using the collapse of Silicon Valley Bank and its failure to make the argument and instead pivots to regulations pertaining to big banks like his. For example, he took aim at the Federal Reserve's annual big bank stress tests. The reason the Fed does this is to gauge the largest bank's ability to withstand economic shocks, which if you have two brain cells to rub together, you know that that sounds pretty frequent. and important, right? Especially since these are the so-called too big to fail banks that will inevitably get bailed out because failing to do so could tank the world economy. But here's

what Diamond argues in his shareholder letter. He writes, quote, regulation, particularly stress testing, should be more thoughtful and forward looking. It has become an enormous, mind-nummingly complex task about crossing T's and dotting eyes. I mean, being thorough when the health of the world economy is on the line, it's just so icky, am I right? I mean, in all serious, keep in mind that SVB was not subject to some of the toughest regulatory measures, including regular stress tests, because it had less than $250 billion dollars in assets. In addition, SVB secured some interesting favors, if you want to call it that,

from the Federal Reserve. As the lever reports, in 2017, the Fed granted SBB a five-year reprieve from the Volker rule. The decision allowed SVB, a major lender to the tech industry, to remain a traditional deposit-taking bank while also maintaining its risky investments in venture capital, a form of private equity that funds startups in the tech industry, which has recently been battered by mass layoffs and financial losses. Remember when Jamie Diamond was allegedly concerned with SVB's tech concentrated client base and investments? Looks like deregulation was at the heart of that too, Jamie.

A few years later, as the lever writes, the Trump administration effectively granted this same exemption to the whole banking industry. allowing banks to sponsor and invest heavily in venture capital funds. As a result, SVB was able to continue investing in assets that the Fed deemed too risky for a federally insured bank in 2017. Again, this really sounds like deregulation rather than too many cumbersome banking rules had a lot more to do with Silicon Valley Bank's demise. Now, Diamond goes on to say that maybe the banks, maybe the bankers should really have a seat at the table when lawmakers are considering regulations, which is hilarious.

He writes, a less academic, more collaborative reflection of possible risks that a bank faces would better inform institutions and their regulators about the full landscape of potential risks. Don't banking execs already have a seat at the table? I mean, they're able to legally bribe lawmakers to do their bidding, which, by the way, includes deregulation. And we already have an idea of just how much risk banks are willing to take in order to maximize profits. When SVB's own internal model demonstrated that they were making terrible and risky decisions, they corrected course immediately, except they didn't.

I'm just kidding. They did the opposite. The Washington Post reported that. The Washington Post reported that in buying longer term investments, that paid more interest, SVB had fallen out of compliance with a key risk metric. By the way, this was an internal metric, right? An internal stress test. So the internal model showed that higher interest rates could have a devastating impact on

the bank's future earnings, according to two former employees familiar with the modeling. So once they realized through their own internal stress test that their investments were out of whack, maybe they should reconsider because of how rising interest rates would impact the value of those investments. You know what they did? Here's what they did. It's amazing. Instead of heating that warning and over the concerns of some staffers, SVP executives simply changed the model's assumption. The tweaks predicted that rising interest rates would have minimal impact. The new assumptions validated SVB's profit-driven strategy, but they were profoundly misplaced. In other words, let me just pause for a second and just like really drive this point home.

When SVB's own internal stress test indicated that their investments were not a good idea and were vulnerable to rising interest rates, they didn't change course with the investments. They decided to tweak their internal stress test. It's amazing. Now, Diamond wants those guys to have a seat at the table when deciding on banking oversight. Yeah, no thank you. The point of this portion of Diamond's letter is to resist new banking regulations. In fact, he urged policymakers to avoid what he referred to as knee-jerk, whackable, or politically

motivated responses. I'm sure he's probably thinking about Senator Elizabeth Warren here. He says in his letter, quote, we should carefully study why this particular situation happened, but not overreact, end quote. Great, I love that. So let's carefully study what happened to Silicon Valley Bank right now. First, it's important to reiterate that Diamond is conflating regulations that only impact big banks like his with the standards for smaller regional banks in order to make the case for loosening banking regulations overall. As I mentioned earlier, Silicon Valley Bank lobbied hard to secure banking deregulations

in 2018. What little oversight they still had to deal with was clearly a joke. And here's what I mean when I say that. On March 19th, the New York Times reported that Silicon Valley Bank's risky practices were on the Fed's radar for more than a year before it collapsed. But the Fed clearly didn't do enough to prevent the collapse from taking place. The Times reported that in 2021, supervisors at the Federal Reserve Bank of San Francisco, which oversaw Silicon Valley Bank, issued six citations. Those warnings known as matters requiring attention and matters requiring immediate attention flagged that the firm was doing a bad job of ensuring that it would have enough easy to tap cash on hand in the event of trouble.

But the bank decided to basically ignore these warnings. They did not fix their vulnerabilities, clearly. And so what happened next? By July of 2022, Silicon Valley Bank was in a full supervisory review getting a more careful look and was ultimately rated deficient for governance and controls. It was placed under a set of restrictions that prevented it from growing through acquisitions. So in other words, the only thing the Federal Reserve did in terms of their oversight is prevent SVB from acquiring other banks, which is hilarious because in reality, there should have been more done to ensure that Silicon Valley Bank was diversifying its investments, or more importantly, doing whatever it took to ensure it had more.

Enough capital should there be an increased number of depositors looking to take their money out of the bank. But obviously, this oversight was not enough because last fall, the San Francisco Fed met with senior leaders at the firm to talk about their ability to gain access to enough cash in a crisis and possible exposure to losses as interest rates rose. But clearly, corrections still were not made. By early 2023, Silicon Valley Bank was in what the Fed calls a horizontal review, an assessment meant to gauge the strength of risk management. That checkup identified additional deficiencies, but at that point, the bank's days were numbered. And as we all know, Silicon Valley Bank finally collapsed. Now, considering the revolving door of politics, you should also expect some conflicts of interest among the regulators themselves. that clearly was a problem here. Silicon Valley Bank CEO Greg Becker sat on the Federal Reserve

Bank of San Francisco's board of directors until March 10th. How can we expect CEO's friends to regulate his business, his business practices? Now, the San Francisco Fed also found major red flags and really did nothing about it. Like that, that was clear. And eventually the bank collapsed. And I want to go back to those 2018 efforts to deregulate mid-sized banks like Silicon Valley Bank, which by the way did indeed happen. It was a bipartisan effort. Democrats and Republicans voted in favor of that legislation. Donald Trump signed off on it. But there was one person in the Fed at the time who disagreed with it. Randall Quarles, who was the Fed's vice chair for supervision from 2017 to 2021, carried out a 2018 regulation.

regulatory rollback law in an expansive way that some onlookers at the time warned would weaken the banking system. Okay, well, one of those people who warned quarrels, you know, warned against the deregulation was Lael Brainerd, who was a Fed governor back then and now serves as a top White House economic advisor. So Brainerd was actually against the deregulation. regulation of mid-sized banks like SVB arguing at the time, quote, this is amazing, today's actions go beyond what is required by law and weaken the safeguards at the core of the system before they have been tested through a full cycle. At a time when the large banks are profitable and providing ample credit, I see little benefit to the banks or the system from

the proposed reduction in core resilience that would justify the increased risk to financial stability in the future. And as she predicted, this is what she wrote at the time, this is in 2019, the distress of even non-complex large banking organizations generally manifest first in liquidity stress and quickly transmits contagion through the financial system. Indeed, that is exactly what happened with Silicon Valley Bank, the lack of capital to help pay depositors as they were withdrawing money. That is what led to the collapse. And there were so many steps that could have been taken along the way, regulatory moves that could have been implemented, that could have prevented the collapse of that bank. But there wasn't enough in terms of regulation. And to be clear,

even before the 2018 deregulations, the weak sauce, Dodd-Frank regulations that we had in place were already too weak. Weakening them further really did put our entire banking system in more jeopardy, because if you do deregulate the banking system, the banks will take advantage of it. They will engage in risky maneuvers, risky investments, all sorts of risky garbage that puts their bank and the country's financial system in jeopardy. So that's what's really going on. And it is incredible to me that Jamie Diamond has decided to use that bank's collapse as fodder for more deregulation.

It's ridiculous, it's gross, and I disagree wholeheartedly. We got to take a quick break. When we come back, we've got more news for you, including how the Pentagon is the latest government agency looking to bailout failing corporations. We'll be right back. in other places, you know, the Intercept does a lot of great work. And this story deserves a lot more attention than it's gotten so far. And it has to do with bailouts. Now, typically when we think about bailouts, we think about, you know, the federal government stepping in to bail out

a collapsing bank or a failing business. But have you ever thought about the possibility that the Pentagon could serve as a government agency that does its own bailouts? Because that is essentially what this story is about. Let's talk about it. New reporting from The Intercept indicates that the Pentagon appears to be the latest government agency working to bail out big businesses. I'm not kidding. This story is insane. So while Silicon Valley Bank was about to collapse last month, the Pentagon was among those demanding that the federal government intervened to protect depositors. Now, I was concerned about how,

the little guy would be impacted if the federal government didn't step in and make depositors whole. Because Etsy, for instance, had their account with SVB, and they used that account to do payroll for all the different small vendors on their platform. I was concerned about those folks. But that is not what the Pentagon is concerned about. The Pentagon was concerned about tech companies that they might want to, you know, have contracts with, you know, tech companies that might do some work for the military, they wanted to make sure that those companies were made whole. And as we know, Silicon Valley Bank had a concentrated tech client base. So let's give you some more details. The Pentagon, as the Intercept writes,

Scramble to prepare multiple plans to get cash to affected companies if necessary, reporting by Defense 1 revealed. Their interest in Silicon Valley Bank stems from the Pentagon's brand new office. This is little reported. Like, I didn't know about this until the Intercept report about it. It's the Office of Strategic Capital. The Secretary of Defense established the OSC in December, specifically to counteract the investment power of adversaries,

China in U.S. technologies and to secure separate funding for companies whose products are considered vital to national security. Where do you think that they secure the funding from? They secure the funding from us, the United States taxpayer. And to be sure, the Biden administration has already allocated hundreds of millions of dollars to this project. We'll get to that in just a moment. Hold. Now, the OSC, again, the Office of Strategic Capital, enjoys special authority to use loans and guarantees not normally available to the Defense Department to attract private investment in technology. Again, the idea is, these are tech companies with technology that we might want to use in the military. So we should definitely look out for

their financial interests. Now, OSC's website identifies its mission as two-fold. First, identifying critical technology areas, and second, funding those investments using investment tools. Quote, these financial tools are new to the department and will be complementary to ongoing technology innovation efforts, end quote, the agency's mission states. Now, the full extent of the OSC's authority has not yet been determined, which is also a little concerning. But as its charter is still being drafted, here's what we know. OSC is so new that it does not yet have its own budget, but President Joe Biden recently requested $115 million in funding. Again, $115 million in funding that will be redistributed from the United States worker and

taxpayer to the Pentagon in an effort to bail out. and invest in various tech companies that they might have some interest in. Okay. Now, Democratic Senator Mark Warner, that's really the heart of this story. That is who we need to really, really hone in on when talking about this case. Because he really spearheaded this effort to get the Pentagon what it wanted in terms of the funding and this program overall. Okay. Now, keep in mind that he is the chair of the Senate Banking Committee. He's a corporate Democrat, so we already know what corporate Democrats stand for. They stand for the best interest

of moneyed interest. And he's completely on board with these Pentagon bailouts and Pentagon investment projects. As SBB was collapsing, by the way, he issued a press release saying that the bank run posed a national security threat, which, listen, it definitely posed a potential economic collapse and more bank runs, but a national security threat. When you hear national security threat, you think about an actual attack on the United States by some foreign enemy, but that is not what happened here. Let me continue. Mark Warner said this.

After an unprecedented and reckless run on Silicon Valley Bank, there were very real risks of instability spreading to other institutions and undermining our national security and technology innovation system. Further, he says, when our financial system is under assault, that is a national security issue. But Warner played a role in weakening our financial system by, you know, deregulating it. So you know how we talk about the banking sector, mid-sized banks in particular, getting deregulated in 2018 and how that was a bipartisan effort? Well, Mark Warner was one of the Democrats who voted in favor of that deregulation. He, along with 16 other Democratic senators, joined Republicans to revoke key parts of the Dodd-Frank Act and essentially allow for banks like Silicon Valley bank to get away with risky investments and poor management.

The intercept asked Warner whether his vote had any impact, any impact on the bank's collapse, right, the deregulation. And here's what he said. The question that I have for you, though, he said, is you tell me what regulatory system can get rid of 25 cents on every dollar, he said in reference to the amount of SVB's bank run where 25% of their deposits were withdrawn in a day. Right, okay, but why were 25% of the deposits withdrawn in a day? Because Silicon Valley Bank had invested much of their assets in long-term government

treasuries that had lost value as interest rates increased. And when depositors needed money, as they were withdrawing money, Silicon Valley Bank had no choice, but to sell those treasuries at a loss. How much was the loss? $1.8 billion. And so if you're a depositor at that bank and you see that there's some mismanagement going on, what do you do? You want to take your money out of the bank, and that's exactly what happened.

But had there been oversight to ensure that Silicon Valley Bank was not mismanaged, I think they'd be in a better position today. Not according to Mark Warner, who doesn't regret deregulating mid-sized banks in 2018. Now, Warner, the only member of Congress to have public ties to SVB or to have publicly tied SVB to national security, has received some significant campaign contributions from the financial sector, including maxed out donations from Silicon Valley Bank since 2012. Warner has received over $21,000 from Silicon Valley Bank Super PAC, and in 2022, was the only senator to receive a campaign donation from the PAC. His net worth has hovered around $200 million, with tens of millions in mutual funds,

government bonds, and equity stakes, making up huge parts of his portfolio. While the OSC's role is unique, remember that's the government, the Pentagon program, It is predated, I should note, by the Defense Innovation Unit, which is an independent advisory board established in 2015 to facilitate the Pentagon's adoption of commercial technology. Now, that unit was restructured, according to The Intercept after being met with resistance by companies skeptical of the Pentagon. But the other clear objective here is to have the Pentagon act as venture capitalist essentially. So Pentagon Comptroller Michael McCord referred to OSC as an initiative that the secretary cares a lot about, explaining that it was trying to connect us better with the venture capital world to get their ideas and their capabilities into our system. It's not connecting us to the Silicon Valley Bank, but it is connecting us to that world.

I mean, cool if you want to do that, but how about you do that with your money? Why do that with our money? And why do we need yet another government agency? In this case, the State Department, the Pentagon, jumping in and creating a system that allows for bailouts of corporations. I just don't agree with it. I think it's a terrible idea. And we already have the federal government, in my opinion, doing two. much when it comes to intervening and, you know, playing interference on behalf of corporations

and the financial sector. So again, the fact that the Pentagon scrambled to prepare multiple plans to get cash to affected companies if necessary, following the collapse of SBB, like that should raise huge red flags for the American people. But the problem is I don't think most Americans know about this story. I know that corporate media is not reporting on it. So do us a favor. Share the intercepts reporting on this.

Share our video on this. It's really important for Americans to be fully informed on what our government is up to. Because while they fail to serve our best interests as ordinary people, they never hesitate to think about weird ways to provide financial relief and assistance to incredibly successful corporations when they make bad decisions and fail as a result. Let's move on. We've got more news to get to, including, oh, this cheery topic, child labor. the country have begun rolling back child labor protections because, of course, you have

corporations that really, really need more labor that they can exploit and pay as little as possible. Children are perfect for that. Now Iowa is one of those states, and thanks to the work of more perfect union, we now have restaurant groups and other businesses in need. And we know about the restaurant groups and other businesses looking for cheap labor and how they fueled the efforts by state lawmakers to propose this bill and potentially pass it. So before we get to the industries behind the bill, the money behind the bill, why don't we tell you what the bill actually does? Again, this is in the state of Iowa. It was sponsored by a Republican state senator by the name of Jason Schultz. Let's watch.

The next part of the bill was clearly written for the Iowa Restaurant Association, Hotel and Lodging Association, and National Bureau of Independent Businesses, the state leaders in low-wage jobs. It would allow 14-year-olds to work in giant freezing meat lockers and raise their mandatory clockout time from 7 p.m. to 9 p.m. And then 11 p.m. in the summer. The research that has been done has found pretty clearly that 20 hours is kind of a cutoff. And when kids work more than that during the school week, their grades, the grades start

to plummet and their school completion rate starts to plummet. Imagine having child labor laws that allow for them to work as late as 11 p.m. at night. That's insane. But the proposal goes much further. Okay, so teens under 18 will still hypothetically be barred from employment in fields like mining, logging, demolition, and they will be barred from operating dangerous machinery, maybe. I mean, there have been child labor law violations all across the country where children do stuff like this. And they just get slapped with a fine and then they do it again. So again, there's the law and then there's the enforcement of the law, enforcement of the laws are lacking. So even though the law says that

or the proposal says that children won't be doing these things, just let's wait and see what actually happens. Now, thanks to a newly added section to this child labor proposal in Iowa, the bill would allow the Iowa workforce development and state department of education heads to make exceptions to any of the prohibited jobs for teens, ages 14 to 17, participate in in work-based learning or a school or employer-administrated work-related program. So in other words, if the right people sign off on it, kids as young as 14 can be working in these areas, these incredibly dangerous jobs. The bill would also allow 16 and 17-year-olds to handle alcohol. And that basically means that literal teenagers, 16 and 16- and

17 year olds would effectively be placed in pubs and bars where they would be serving liquor to drunk adults. Let's just pause on that for one second. Because while we've been hearing from Republicans who fearmonger about books in school libraries, you know, they falsely claim that the books are pornographic and dangerous for the kids. Apparently, not a peep from Republican lawmakers when it comes to this proposal that would put 16 and 17 year olds in bars and pubs where you have drunk adults, where they would be serving the drunk adults. Amazing. It really is amazing stuff. Okay, so why are Republicans pushing for this? What's really going on here? Well, an Iowa lobbyist actually pretty blatantly admitted

that the state's child labor bill was written by the restaurant lobby and handed to Republican lawmakers. Let's watch. The bill was really spearheaded by the Restaurant Association. We were asked to be, we were invited to come along. That's Brad Epperly, a lobbyist who works for big corporate clients like the Iowa Grocery Industry Association. He's outright admitting to us that the Iowa Restaurant Association was the driving force behind this bill. They're an affiliate of the National Restaurant Association, a trade group that represents some of the biggest names in fast food, like Burger King and Taco Bell. They also lobby for big corporations like PepsiCo and Cisco. And from one look at their newsletter from this time last year, you can tell they've been hard at work spreading the gospel about the benefits of young labor.

You know, it's amazing. Everything old is new again. I mean, if you want to see what the benefits of child labor really look like, just take a look at what child labor was like before unions succeeded in passing necessary child labor regulations. I mean, you had kids who were just permanently injured. As a result, you had children who died on the job. What are we doing? And remember, the whole point of this, the whole reason why you have the restaurant industry and other moneyed interest pushing for this is because they just want cheap labor. That's it. That's all it is.

And it's just so incredibly disgusting because, you know, with adults, they might get a little mouthy. Adults, you know, might start talking about organizing their workplace. Kids have less power. Kids might be a little less willing to speak out if they feel they're being mistreated on the job. That's what's really going on here. But it's not just the restaurant lobby. Tons of other business interests were involved in pushing this legislation in Iowa, and you should know about them. This child labor law rollback originated at a meeting of the Iowa Workforce Development Board, which is overseen by Governor Kim Reynolds. Most of its members are corporate CEOs and lobbyists, and they meet up several times a year

to come up with new policies. This bill was a product of a meeting in November. The WDB is chaired by Jay Iverson, executive officer of the Association of Iowa Builders, hence the emphasis on kids using bandsaws on work sites. Lobbyists from the Iowa Association of Business and Industry are well represented on the board, which gives member corporations like John Deere and Google seats at the table. And of course, no raise to the bottom would be complete without the Coke-funded Americans for Prosperity and Opportunity Solutions Network, also lobbying on the bill. So we know the people behind it. We know what their intentions are. We know what the agenda

and objective is. What's so devastating when you really think about it is what children will be robbed of. Because think about what it's like to be a kid, right? You're already, under a lot of stress and pressure with school, homework, all of that. Maybe your parents put you in extracurriculars. I can't emphasize enough how important just free time to explore is when it comes to personal development. That's true of adults, by the way, but it's definitely true of children, giving them the opportunity to just explore the world, explore what their interests are, just have free time

to do what they want to do as long as they're safe, of course. Have the free time to figure out who they are. I mean, these are important moments in our lives that kids could potentially be robbed of because think about it. If families are dealing with precarious economic situations, which they are, and all of a sudden there's an opportunity for their children to go to work and maybe bring in some household, increase the household income, they might take advantage of that. And it sucks because parents might do this out of desperation. And I think that the industries behind this are well aware of that, right? Not only do they underpay workers, adult workers, which places them in a precarious economic situation, that precarious economic situation might even persuade those very parents to send

their own teenagers to work when in reality we should not have a, we need to deal with that root cause of what is causing all of the precarity to begin with. Finally, we should talk about the lawmakers and politicians in Iowa who have been bribed by these industries, okay? So there's grocery company, Hivey, for instance. They've donated over $800,000 to Iowan politicians like Kim Reynolds, Schultz, who proposed the bill, and the Iowa Senate Majority Leader Republican Jack Whitver over the past decade, also being a prolific violator of child labor laws. And Iowa, unfortunately, is not the only

state that is proposing such legislation. Should also note that Hivey, the grocery store that I talked about earlier, they've already been forced to pay $700,000 for more than 30 labor law violations since 2000. But they're undeterred. They're like, all right, if we don't like the laws because it ends up leading us to fines and all sorts of, you know, regulatory headaches. Why do we just change the regulations? And they can do that. They could definitely push for that by bribing the politicians. And that's what they have chosen to do here. So other states that are doing this, we have, we have Iowa, Minnesota, Wisconsin. In fact, Wisconsin has, they've all, they're all trying as we speak to expand child labor in their states. And finally,

Finally, in Arkansas, as we've covered on the show, Governor Sarah Huckabee Sanders signed a bill into law last month that would make it easier for employers to employ children without having to worry about violating certain child labor laws. The Iowa bill has passed through committee, but neither chamber of the state legislature has voted on it yet. There needs to be a lot of pushback against these measures. we cannot go back to the days when children were operating heavy machinery, working to the late hours of the night, their kids, they should be focusing on their schoolwork, they should be focusing on exploring, figuring out who they are as people, playing, enjoying time with their friends. Again, these are incredibly developmental, incredibly important developmental years. And the idea that they should be exploited by

companies looking for cheap labor is disgusting. We got to take a break. When we come back, we've got more news, including how much Amazon spent in a single year in their efforts to bust unions. We'll be right back. Welcome back to the show, everyone. I just want to read a comment from late bloomer 66 in our Twitch community. And the statement is this. Anna, the main reason I love Wednesdays and your solo hour is because you have the freedom to go into these deep dives.

There's so much about the banking industry and the financial sector that so many of us were not aware of. I love the fact that you go to such, go into such detail. Like I've seen it written in chat before, give us the deeds, Anna. My pleasure to do it, I'm really, really happy to hear that some of you guys are enjoying that kind of content. And I'm going to keep doing it on Wednesdays. All right. With that said, let's move to this next story about Amazon because their latest financial filings shouldn't really blow your mind.

But even they went above and beyond the norms in terms of their spending on anti-union nonsense. Turns out that Amazon spent $14 million on anti-union consultants in just a single year, in 2022 alone. Now, this is according to their latest financial filing, and it gives you a sense of just how terrified they are of organized labor. Now, that mind-blowing number, $14 million, is a small piece of the Amazon pie. We know that this is a company that brings in billions of dollars every year. But while 14 million might not seem like it's much for Amazon, you have to think about this in the context of what is considered the norm when it comes to corporate spending on union

busting consultants, okay? So to understand that, let's get to the context, let's get to the details. So Dave Jameson from the Huff Post reported on this and says that companies rarely spend more than one million, just one million on union busting consultants. But in 2021, Amazon started increasing their spending. Gee, I wonder why all of a sudden you have warehouses trying to organize their workplace. And so Amazon that year in 2021 spent 4.3 million on anti-union consultants, which was already a huge increase from the norm. But the 14.3 million obviously isn't even more more drastic escalation. According to Amazon's filings, the company paid their consultants around $3,000 a day

last year. A day, everyone, $3,000 in a single day. If you worked, if you worked for $3,000 a day, 40 hours a week, 52 weeks a year, you'd make $6 million in a single year, okay? If you got paid $3,000 for an eight hour day, you'd make $300. $175 an hour. So just wanted to give you a sense of how much these union busting consultants get paid. Now, Amazon is just, you know, one cog in the machine.

According to the Economic Policy Institute, American employers spent over $430 million or spent $430 million a year on anti-union consultants. Okay, there's a whole union busting industrial complex here. Now, if you're wondering why this massive industry exists, it's because unions get results for their workers. In fact, if you pay no attention to anything I say today, fine, but please pay attention to this because this is exactly why Amazon and Starbucks and all these other companies fight organizing workers so viciously. A new study published in Cornell University's Industrial and Labor Relations Review finds that workers who are in a union throughout their

careers make $1.3 million more than workers who are never in a union. Union members typically make 3.37 million in lifetime earnings versus 2.08 million for non-union workers, an increase of over 60%. I'm just going to pause so you can absorb that first. second. I mean, there's more. The wage increase comes despite the fact that unionized workers also retire earlier than than their non-unionized counterparts, the study authors found. This is a remarkable increase in lifetime wages and represents a higher lifetime wage increase than that earned by workers with a college degree who earn between 650,000 and 900,000 more In their lifetimes, previous research has demonstrated.

Big companies like Amazon, again, I wanna reiterate, are willing to pay, shell out tens of millions of dollars in a single year to bust unions because they wanna keep the cost of labor as low as possible. Unions fight for higher wages. Employers don't wanna pay higher wages. They wanna provide a better return to their shareholders. That's their fiduciary responsibility, right?

Now, let's pivot to a different component of this story that I think is super important. Now, there have been successful union drives at Amazon warehouses, namely the Amazon warehouse known as JFK8 in New York. They won their union election just over a year ago. But here's the problem. Amazon is stalling. They are refusing to negotiate a union contract. And that stalling is causing some infighting among union members and union leadership. It's actually really frustrating. And I just don't want them to fight. I don't want them to

fracture because that is, I think that is a bug that could destroy their efforts to actually get a union contract. So let me give you the details. So the New York Times reported that in interviews, a dozen people who have been closely involved with the Amazon Labor Union said the union had made little progress in bringing Amazon to the bargaining table to say nothing of securing a contract. Many-sided lopsided losses at two other warehouses, unstable funding, and an internal feud that has made it difficult for the union to alter a strategy that they considered flawed. Now, some ALU workers or union members, I should say, are frustrated with their leader, Chris Smalls, who has flown around the country after the ALU's victory to

encourage other workplaces to unionize. Now, instead, the JFK worker, JFK-8 workers are basically saying Chris Smalls should stop doing this traveling and focus his efforts on a potential strike that they could do in order to get Amazon to negotiate a contract in good faith. So Tristan Martinez, who's a JFK-8 employee and union organizer said this, we're talking to workers, having one-on-ones, growing our power in the building. That's where it matters. Chris, flying all over the world, is not going to make us get a contract any sooner. Now, Chris Smalls rejects that statement and has stated that the strike would be unproductive because workers would be scared and concerned about losing their income.

And I do think that that is a legitimate concern that Smalls is bringing up because, you know, smalls, they need a strike fund to make sure that the workers, you know, who are putting their livelihood on the line to do this strike are made hold during the strike. And I think that is a good point. But Chris Smalls has also said that his traveling is important for getting donations for the ALU, which does not have a consistent source of funding at the moment. Another good point by Smalls. I will admit, though, there are some areas where Smalls should be more conciliatory with his rhetoric, because you don't want the infighting to destroy this incredible important effort to get a union contract. Smalls called the revolt by his former allies

and attempted coup and emphasized that many of the dissidents are white while the union leadership is largely black, as are many workers. At a tense union meeting in December, Smalls told long-time organizers that they should step aside if they couldn't get along with him or those loyal to him. Quote, you got a problem with me, deuces, he said. The two factions, have been operating independently since the meeting. And guys, that is a disaster, okay? I'm not going to sit here and make a judgment call on who's right, who's wrong, because the fact of the matter is they need to work together.

And more importantly, whatever internal disagreements you guys have or struggles you might have, please try to work it out internally. Okay, don't do what the left loves to do. And I'm not saying these union members are all on the left. I'm just giving you an example of what I see on the left, which destroys any effort to get anything accomplished. They love infighting. And more importantly, literal friends, instead of talking to each other privately about their disagreements, will put out content condemning their friend for having a take they don't agree with.

It's ridiculous, it's counterproductive, I hate it, and I don't want that to happen in this incredibly important context where you have a massive corporation, a warehouse within that massive corporation, unionizing and trying to get a union contract. I hear what both sides are saying in this case. I want them to work it out. I just want them to do it in a way that doesn't destroy this incredibly important objective getting a union contract. And the fracturing and infighting will destroy that. I guarantee it. So that's where we are with the Amazon union story. I'm sure Amazon is delighted in hearing about the infighting currently happening at JFK8. And that makes me sick to my stomach. But the union for their part has already filed numerous complaints with the NLRB over Amazon's unwillingness to negotiate a contract in good faith. Hopefully the NLRB comes through. But the other side of this is Amazon is claiming all sorts of nonsense about how the union vote should be disqualified because of whatever reason they're bringing up. That doesn't make any sense to me. So they're trying to fight this through the courts. I don't really think they have a case. But time is of the essence. The NLRB under the Biden administration is pretty good. And hopefully they step in and do something soon. All right, we got to wrap up the first hour. join me for the second hour where I promise you we've got a ton of good news and some light

stories too see you there. by subscribing to Apple Podcasts at apple.co slash t-y-t. I'm your host, Shank Huger, and I'll see you soon.