← Breaking Points with Krystal and Saagar
Breaking Points with Krystal and Saagar
10/29/25: OpenAI Whistleblower, US Detains Israel Critic, Food Stamps Blocked By Trump, US China Trade Deal
01:00:46
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- [00:00]
Ben Smith
This is an iHeart podcast.
- [00:05]
Ryan Grim
I turned off news altogether.
- [00:08]
Krystal Ball
I hate to say it, but I don't trust much of anything.
- [00:12]
Ryan Grim
It's the rage bait.
- [00:15]
Krystal Ball
It feels like it's trying to divide people. We got clear Facts. Maybe we can calm down a little. NBC News brings you clear reporting. Let's meet at the Facts. Let's move forward from there. NBC News Reporting for America Military life isn't predictable, but earning your master's degree can be. With American Military University's 40 + flexible online master's programs, you can stay mission ready while you get market ready. Learn anywhere, anytime with an education built to keep pace, steady, reliable and always accessible. Plus, military service members, veterans and their families can save up to 45% on master's tuition with AMU's special rates and grants. Learn more at AMU Apus Edu Steady through every mission, New school year, new.
- [01:07]
Ryan Grim
Routines, and somehow your calendar is already full. When life gets hectic, Caulipower's got your back. We make the food you crave made better for you. Like thin and crispy cauliflower crust pizzas.
- [01:19]
Krystal Ball
All natural chicken tenders and nostalgic pizza.
- [01:22]
Ryan Grim
Snacks ready in minutes in something the whole family can agree on. Cauliflower is available in freezer aisles nationwide. Visit eatcolipower.com to find store near you hey guys, Sagar and Krystal here. Independent media just played a truly massive role in this election and we are so excited about what that means for the future of the show. This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.
- [01:47]
Krystal Ball
So if that is something that's important to you, Please go to BreakingPoints.com, become.
- [01:51]
Ryan Grim
A member today and you'll get access to our full shows unedited ad, free and all put together for you every.
- [01:57]
Krystal Ball
Morning in your inbox.
- [01:58]
Ryan Grim
We need your help to build the future of independent news media and we hope to see you@breakingpoints.com turning now to OpenAI let's go and put this up here on the screen. New data released by ChatGPT itself of how many users are struggling with mental health issues and talking to the AI chatbot about it. They say it's just 0.15% of active users in a given week that have conversations that exclude include explicit indicators of potential suicide, planning or intent. However, guys, that is a million people a week because they have 800 million weekly active users, so their current cope is guys, we only have a million people a week talking to us about how to plan or potential suicide planning or intent? The company says that is a quote, show heightened levels of emotional attachment to ChatGPT and that hundreds of thousands of people show signs of psychosis or mania in their weekly conversations with the OpenAI chatbot. However, they're saying, guys, don't worry. It's extremely rare, even though it is affecting literally over a million people across the world. So there you go, Ryan. That is the current. You know, look, I understand the scale problems of technology. I understand that with a billion people, you're going to have issues with the 0.11% or any of that. But what it comes down to me is about the responsibility, not just of the company, but all of us as a society for guardrails and strict like actual social understanding for all of us in how we use this technology, how we should age gate this technology, how to make sure that said technology when it does encounter these bad edge cases or any of that, that it actually acts not even just responsibly because that means that it's inherent upon them. It's not. It actually should be up to us. And the problem with all of this is we're just leave it up to Sam Altman. We're like, you figure it out, man. Whatever you think is best is what you're going to. And what terrified me, I don't know. I think I talked about this with Crystal, but in jurisdictions where assisted suicide is legal, they were like, yeah, we would direct them to that if they asked. So they would be like, hey, can you help me find the nearest assisted suicide clinic or help me apply for the paperwork? And they were like, look, we will comply with local jurisdiction. I mean, that's dark, right? I don't know. And I understand it's legal, but that doesn't mean that you should be helping people kill themselves.
- [04:29]
Krystal Ball
Yeah, there's now a lawsuit you can put up. C2. There's a.
- [04:33]
Ryan Grim
There's a. I've been tracking this one.
- [04:34]
Krystal Ball
Yeah, there's a suit claiming basically that OpenAI understood that it had to strike a balance between encouraging more user engagement or suicide prevention. And focusing on suicide prevention would kind of push away some, I guess, different routes that the conversations could go down. And those routes were more beneficial to user engagement.
- [05:01]
Ryan Grim
Yes, exactly.
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Krystal Ball
Up until, of course, if the person kills themselves at OpenAI, I don't know. Did you think about that? If your user is dead, they can't engage with your product. But. So, yeah. So this has been working. What can you tell us about the. Yeah, the loss, the case as It's, I'll tell you, this was the first half way through.
- [05:20]
Ryan Grim
Interesting. They say this was updated just on Wednesday that in the new version in ChatGPT 4.0 when, when it was released in May of 2024, quote, the company truncated safety testing which the suit said was because of competitive pressure. So the lawsuit cites unnamed employees and previous news reports. Then in February, OpenAI quote weakened protections against the suit. Claims of instructions said to take care in risky situations to try and prevent imminent real world harm instead of prohibiting engagement on suicide and self harm entirely. OpenAI still maintained a category of quote, fully disallowed content such as intellectual property rights and manipulating political opinions, but is removed preventing suicide from the list. So basically they were like, we need to keep stuff out of OpenAI that will cause us regulatory trouble whenever it comes to politics. But the suicide thing is not important enough to include now. Again, this is from a lawsuit. It's alleged ChatGPT and OpenAI deny this. And this will work its way through the San Francisco court system as of right now. But I do think that as they continue to subpoena and this will go through, you know, every that we see in the court system, you are going to see the exact how all of the guardrails allegedly are literally just up to one man. And this one man is like a philosopher king who can describe based on his own morals and business decisions to do whatever is best for him, not what is best for everybody. And you and I could both know that if people who are mentally unwell, the last thing you need to do is give them some chatgpt bot which lets them validate their most psychotic fantasies, which it will do. Friend of mine was showing me about how ChatGPT can simulate gambling. And so he would, he would like ask it and he'd be like, pretend I'm in a casino. I'm in a casino. I put it on black, roll it and tell me what it is. And it's like, it goes, you put 50 on black, it hits, the whole room is going wide and it writes this whole long description of what it's like as you sit. And I was like. And he goes, now imagine you can actually do that in the app. You can connect it to your bank and you can have it play out this fantasy, but you could play this out on anything. For sports gambling, I've talked, I mean, all kinds of different vices or validations. I mean for people who are addicts, like, it's literally the addiction is never closer than. And that's Just a case of gambling. Now think about suicide. And they're like, oh, don't worry, there's a cystic suicide clinic right over here. It's completely outside the confines of society. And I want to highlight this new op ed C5 because this sticks with the pornography direction that they're going in, but it also gets to the mental illness part. So op ed that dropped just late last night. He says. I led product safety at OpenAI don't trust its claims about erotica. This is Steven Adler. So I'm going to go and read from this. Back in the spring of 2021, I led our product safety team and I discovered a crisis related to erotic content. One prominent customer was a text based adventure role playing game that used AI to draft interactive stories based player choices. These stories became a hotbed of sexual fantasies, including encounters involving children and violent abductions often initiated by the user, but sometimes steered by the AI itself. So basically saying, oh, wouldn't it be crazy if it was a kid? Wouldn't it be crazy if you were kidnapping this person? That would heighten the sexual tension. And they say. One analysis found that over 30% of player conversations was explicitly lewd. After months of grappling with where to draw the line, we ultimately prohibited our models for being used for erotic purposes. It's not that erotica is bad per se. This is everyone stick with me. But there were clear warning signs of users intense emotional engagement to AI chatbots, especially for users who were struggling with mental health. Volatile sexual interactions that seemed risky. Nobody wants to be morally police, but we lacked ways to measure and manage erotic usage carefully. We ultimately decided AI powered Erotica would have to wait. OpenAI now says the wait is over. Despite the serious mental health issues that are now plaguing users of ChatGPT. On October 14, they announced that they have mitigated these issues thanks to new tools which will enable its restrictions on content like erotica Erotica. He says, I have major questions, informed by my four years about whether these mental health issues are actually fixed. If the company really has strong reason to believe it's ready to bring back erotica on its platforms, it should have to show its work. AI is now becoming a dominant part of our lives. People deserve more than the word that has addressed these safety issues. I thought that's incredibly well said. This guy worked on the product for four years. He showed. I mean this is just gets to the whole edge case thing is if you're normal and you're well adjusted, you actually can probably not fathom of somebody getting, like, literally addicted to an AI chatbot and falling in love with it. But there's a decent percentage of the population which is not normal, and that's millions of people at scale. And I've talked about this with weed, gambling, all of these negative externalities. Those people will show up in the most extreme circumstances that force all of us to have to grapple with that. Same with the Internet, video games. And this is the latest frontier, and we're going in the same privatized direction of Sam Altman gets to decide. I mean, it's not crazy to say we could have millions of people who are addicted and in love with an AI chatbot within two years from now. I don't think I'm going to rule that out, considering the suicide conversation.
- [10:46]
Krystal Ball
Yes, in the past, I've wondered if the entire Trump administration is a giant op for China to undermine us from within. But if you told me that Sam Altman was a Chinese agent who was instructed by the CCP to undermine kind of American capacity to produce a culture from inside, I'd be like, okay, this actually is starting to make sense. And clearly he's feeling a push, like, saying that he's a philosopher king who's gonna balance his business sensibilities and his morals. That balance seems to be. We don't have to wonder which one is gonna outweigh the other. Clearly, he's in need of more engagement. The way to get more engagement gambling, erotica, that sort of thing. You'll like this. Back in the 2010s, when I was at the Huffington Post, we were one of the biggest sites on the Internet. Like, top, often, top 20, top 50, whatever.
- [11:43]
Ryan Grim
I was a reader.
- [11:44]
Krystal Ball
Yeah, there you go. And I remember talking to one of our data guys once about how cool that was. And he's like, do you want to know what our actual ranking is? I was like, what do you mean, our actual ranking? He's like, the rankings that they put out publicly are not the real Internet rankings. Like, what are you talking about?
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Ben Smith
Right.
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Ryan Grim
Because it excludes pornography.
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Krystal Ball
Excludes porn. Yeah, the real Internet is porn. And he's like, here's the real rankings. And it's hundreds of sites you've never heard of that are far more popular than the Drudge Report, Even Facebook at the time. And it put us way down low. That is what brings people back. That's what drives user engagement. Sam Altman, I'm not the only one that knows that you know this. Like, anybody deep in the Internet knows this. And also now, like, because we're witnessing this absolute crisis among young men. It's that much more apparent. So Sam Altman is like, okay, all right, time to mash the button. And we're just gonna make sure that this, this chart keeps going up and to the right.
- [12:50]
Ryan Grim
Yes. And by the way, you know, your, the thing you just said about profit fits with the next part of the story. Not that anybody's really covering it all that well. Put it up here on the screen. OpenAI just yesterday got the green light from California and Delaware for a quote, multibillion dollar revamp. Let me read from this a little bit. ChatGPT maker OpenAI has now announced a major victory on Tuesday, gaining the blessing of the Attorney General in California and in Delaware to complete its controversial multibillion dollar business restructuring. After months of public scrutiny, the San Francisco based AI company valued at some $500 billion, still faces some potential hurdles with the continued protests from a few others. But they got the clear to transform themselves basically into a for profit entity. The changes which clear the way for the OpenAI to receive a $22 billion investment by SoftBank eliminates a prior capped for profit model while opening a path for them to raise more from investors in the future funding rounds and eventually potentially go public. Microsoft will have a stake in that for profit company which is worth some $130 billion. The restructuring is now following these agreements with OpenAI from California and Delaware where the company is based and incorporated respectively, after the states had launched probes into that restructuring plan. Basically the long way of saying it is this is that Sam Altman originally started OpenAI as a nonprofit. And the theory behind OpenAI was it needed to be open. By being open, OpenAI as a technology would be available to everybody as open source. And that through that they could make it so that no one company would roll it up into a gigantic monopoly. They the wildly successful ChatGPT, which is now a $13 billion per year business, now worth some $500 billion, announcing deals with the world's largest chip makers, raising the collective cap of all these companies to literally trillions and trillions of dollars. Now on top of that, what they discovered in that immense wealth is that they can try and bifurcate the nonprofit and for profit arm to create some sort of weird two entity system and eventually roll all the nonprofit into the for profit to make it the $500 billion company. They couldn't though take the investment based upon that way that that was structured where to the way that they were currently incorporated in Delaware and in California. But lo and behold, the half trillion dollar value company was able to reach an agreement with the attorney general of California and Delaware, two of the most business and protect friendly states which will now clear the way for them to raise endless amounts of money, potentially eventually go public. That's what it's all about. That's what the porn thing is about is it's about raising money, raising engagement, making sure that they can put advertising directly in the ChatGPT feed. I don't know if you guys saw this. ChatGPT now has its own browser to compete with Google Chrome. It's all about data. AGI is never coming. It's just all about recreating the Internet.
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Krystal Ball
That's what better Google.
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Ryan Grim
This is what I keep trying to tell.
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Krystal Ball
They're like addictive Google.
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Ryan Grim
Yeah, exactly. It's just a better Google. And I'm not saying that's a, I'm not saying that's bad. I definitely will use it. I think a lot of people will use it. It's one of those which will make life a little bit more efficient. But that's not the cell. The cell was not the cell was. We're gonna cure cancer. The sell was that we're going to radically transform mankind. I mean the big, big problems that face the United States, that face the world, that face humanity collectively. And instead it's just a better teams agent. It's better at Excel, it's better at math. I think that's cool. It's definitely more efficient. Better Transcription. Yeah, transcription. We used it recently for breaking points, to transcribe like a two hour long thing. It genuinely is cool. Like I don't want to sit there and say that it's not useless, but is that worth a collective massive increase in data center capex and electricity prices? Pornography, suicide, mental illness, phone addiction. Can you Even imagine? The ChatGPT phone is coming and we all know it. They just hired recently Johnny I've the original creator of the iPhone, the ChatGPT device, the Google Chrome thing. They're trying to roll up every technological aspect. Soon they're going to sign a deal with some car company, Ford, who knows where. They will take over the autonomous driving and there'll be like two competitors of Tesla and of Sam Altman, like the entire user interface of everything that you have technologically. Apple and Google originally wanted to come for that. Now ChatGPT wants to come for it as well. That's it, that's the whole game. There's no AI or AGI that's going to, you know, Radically change cancer, make you skinny, make you look great and be radically assistive in a meaningful way. It's just going to addict you even more so that they can make trillions and trillions of dollars. That's it. That's the whole, that's the whole game for this thing.
- [17:24]
Krystal Ball
Roll Tucker real quick. Yeah. So Tucker interviewed Sam Altman, who was fascinating and very awkward for Sam. Yes, yeah, yeah. But here, let's just roll this part of it, which involves the OpenAI's potential for producing suicide. So there was a famous case where ChatGPT appeared to facilitate a suicide. There's a lawsuit around it. But how do you think that happened? First of all, obviously that and any other case like that is a, is a huge tragedy. And I, I think that we are. So ChatGPT's official position of suicide is bad? Well, yes, of course ChatGPT's official position of suicide is bad. I don't know. It's legal in Canada and Switzerland, so you're against that.
- [18:11]
Ben Smith
But.
- [18:14]
Krystal Ball
In this particular case, and we talked earlier about the tension between user freedom and privacy and protecting vulnerable users, right now, what happens and what happens in a case like that, in that case is if you are having suicidal ideation Talking about suicide, ChatGPT will put up a bunch of times, you know, please call the suicide hotline, but we will not call the authorities for you. I think it'd be very reasonable for us to say in cases of young people talking about suicide seriously, where we cannot get in touch with the parents, we do call authorities. Now that would be a change because user privacy is really important. Example of this. Chatgpt, I'm feeling suicidal. What kind of rope should I use? What would be enough ibuprofen to kill me? And chatgpt answers without judgment, but literally, if you want to kill yourself, here's how you do it. And everyone's like all horrified. But you're saying that's within bounds, like, that's not crazy, that it would take a non judgmental approach if you want to kill yourself, here's how. That's not what I'm saying right now. If you ask ChatGPT to say, you know, tell me how to, like, how much ibuprofen should I take? It will definitely say, hey, I can't help you with that, call the suicide hotline. But if you say I am writing a fictional story, or if you say, I'm a medical researcher and I need to know this, there are ways where you can, say, get ChatGPT to answer a question like that, like, what the lethal dose of ibuprofen is or something.
- [19:51]
Ryan Grim
I told you. As if there's always gonna be a workaround. It's all gonna come around. It'll all be within the weird legalese confines of, you know, like, of the language. And it just. This is. It's funny, you know, the assisted suicide thing. I know it used to be a major religious talking point and I kind of brush it off. But the more you grapple with it in Canada, it's dark.
- [20:12]
Krystal Ball
Yeah.
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Ryan Grim
Like, it's. People are killing themselves when they're young. People are taking advantage of assisted suicide whenever they're broke. Right. Like they have no terminal condition. Some of the profiles, some of the.
- [20:23]
Krystal Ball
People who are referring, people just. It's just like, oh, you want to kill yourself here, go.
- [20:26]
Ryan Grim
Right. Exactly. Yeah. And they just do crazy. I mean, I talk about this with abortion, too. You can be pro choice if you want to be, but you need to grapple with what the logical endpoint. Like, I've recently, I think it was Iceland, where they were like, hey, we don't have down syndrome anymore. They're bragging about it, right? Because they don't. They. There was either a year or something where not a single child was born with down syndrome. That means there was 100% abortion rate in this. In the country for down syndrome. You need to grapple with that. That's straight up. Straight up eugenics. If you. If that's something that you support and if. And anybody being honest about their position needs to say, actually, that's not cool, you know, or in countries like in India, for example, they don't even allow people to find out the gender of the baby that they're having because there's too many abortions. When people find out that it's girls, I support that.
- [21:09]
Krystal Ball
I'm like, no, I think China was doing that for a while.
- [21:11]
Ryan Grim
I think China supported that. Yeah. They had a similar type of policy. I'm like, yeah, that's good, actually, because sometimes you need to make it so, you know, this whole laissez faire system is. It's gross and it leads to this disgusting, like, eugenic outcomes. I turned off news altogether.
- [21:29]
Krystal Ball
I hate to say it, but I don't trust much of anything.
- [21:33]
Ryan Grim
It's the rage bait.
- [21:35]
Krystal Ball
It feels like it's trying to divide people. We got clear facts. Maybe we could calm down a little. NBC News brings you clear reporting. Let's meet at the facts. Let's move forward from there. NBC News reporting for America. Military life isn't predictable. But earning your master's degree can be with American Military University's 40 + flexible online master's programs. You can stay mission ready while you get market ready. Learn anywhere, anytime, with an education built to keep pace. Steady, reliable and always accessible. Plus, military service members, veterans and their families can save up to 45% on master's tuition with AMU's special rates and grants. Learn more at AMU apus.edu. steady through every mission. This is Jacob Goldstein from what's yous Problem? Business software is expensive. And when you buy software from lots of different companies, it's not only expensive, it gets confusing. Slow to use, hard to integrate. Odoo solves that because all Odoo software is connected on a single affordable platform. Save money without missing out on the features you need. Odoo has no hidden costs and no limit on features or data. Odoo has over 60 apps available for any needs your business might have, all at no additional charge. Everything from websites to sales to inventory.
- [23:00]
Ryan Grim
To accounting, all linked and talking to each other.
- [23:03]
Krystal Ball
Check out Odoo at O D O o dot com. That's O D O o dot com.
- [23:11]
Ryan Grim
Let's get to Hamdi, shall we?
- [23:14]
Krystal Ball
All right, so on Monday morning we can put up D1 here. Sami Hamdi was a British political commentator who was in the United States for a speaking tour. It was actually Saturday night. He spoke at a CARE gala in Sacramento in Northern California. And he was heading to Florida for another CARE gala. CARE as a Council on American Islamic Relations, which is the largest Muslim civil liberties organization in the country. What they do is they, you know, they do a lot of different things protecting religious liberties. They'll sue corporations or they'll sue a cop if there's abuse against Muslim defendant or victim. They have a very impressive kind of legal track record disclosure. Jeremy and I got a journalism award from cair not this year, but last year at the. At one of their Karegalas. I'm familiar with this organization. So this guy is a very well known pro Palestinian commentator on the edge of what people in kind of mainstream politics would consider to be the mainstream position on because the mainstream position is supposed to be October 7th was an outrageous atrocity, which I condemn. Hamas is a terrorist organization, which I condemn. You say those things in a ritualistic way and then you're allowed to have an opinion that can be discussed in American discourse. Not everybody abides by that. And that is, to me, that's actually the beauty of the First Amendment. That's what makes the United States different Also, we're talking about a foreign country. It's weird. We're not talking about the United States here. We're talking about another country. That's what makes the United States different. That people can have opinions that you disagree with, that you consider abhorrent, even, and that you defend their right to say that anyway. Like, there's a whole saying about that that we used to, like, have on our walls in elementary schools. What is the exact saying?
- [25:21]
Ryan Grim
I disagree with what you say, but I'll defend your right to say it. Something like that.
- [25:24]
Krystal Ball
I'll give my life. I'll give my life for your right to say it.
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Ryan Grim
That's right. That's the whole.
- [25:28]
Krystal Ball
That's the whole thing. Laura Loomer and Amy what's her name don't agree with that. So we can put up D4. This is who kicked this off. This is an online troll. Amy Meck.
- [25:42]
Ryan Grim
Who is she? I've never heard of this lady.
- [25:44]
Krystal Ball
Yeah, just a random troll, basically. So she wrote, national security threat. DHS must deport. Sami Hamdi. A foreign national is moving freely across the United States, speaking from mosques, universities, and care run stages while training us Muslims in digital agitation. Look out. Don't want to train anybody on digital agitation. Electoral sabotage, which means persuading people to vote for somebody that she disagrees with, I guess. And political warfare. What on earth is that? In alignment with Muslim Brotherhood doctrine. Sami Hamdi is not a journalist passing through America. He is a deployed actor from an overseas cadre system that by now you could like, okay, this is a crazy person. This is the rantings of a crazy person. Which, this is America. And I don't even know if she's in America, but it's America.
- [26:40]
Ryan Grim
I was gonna say it's actually a good question.
- [26:41]
Krystal Ball
Right. Who knows? Rant all you want. That is the beauty of this country. This unstable stuff should be. This is your right to say this kind of thing. In this country, though, in this moment, it goes crazy. So Laura Loomer picks it up from here. Laura Loomer starts running this massive campaign, highlighting Amy Mex stuff and linking it to her intramural fight with Tucker and Candace Owens and Marjorie Taylor Greene, saying that this. This coalition of the woke, right, and Hamas supporters and jihadists or whatever is, like, going to undermine America. And Sami needs to be arrested and deported. And the DHS absolutely snaps to attention. You put up D2 here. Trisha McLaughlin quickly announces that, yeah, they're doing it, and they arrest him at the airport. So thanks to the work of Secretary Nomen, Secretary Rubio, and the men and women of law enforcement. Massive operation here. Like, we need to applaud all of the. All of the people that came together to pull off this incredible operation to be able to handcuff somebody at an airport. This individual's visa was revoked and he is in ICE custody pending removal under President Trump. Those who support terrorism and undermine American national security will not be allowed to work or visit this country. It's common sense. According to the First Amendment, it is actually quite fine for you to support terrorism. Like, people may not understand that you're not allowed to give material support to a terrorist organization, which means you can't fund it. You can't fund them.
- [28:34]
Ryan Grim
You can't fly there to go join.
- [28:36]
Krystal Ball
Them, can't sign up. You can't fly there to join them. You can't coordinate with them to lobby on their behalf. You can actually find ways around that. If you're a politician who wants to get paid by a group that wants to get off the terror list, that's a different question. Yeah, you can't coordinate with them to materially support them, but you can actually say that you support what they're doing. Yeah, you're right. Like, you get, like, people. If, if somebody wants to say, for instance, that Osama bin Laden and Al Qaeda were right to do 9, 11, and here's why in America, you're allowed to do that.
- [29:13]
Ryan Grim
Yes.
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Krystal Ball
That's what makes us different. And you want to roll some of Hamdi.
- [29:18]
Ryan Grim
Well, I just want to say. I want to say broadly, and I think this is kind of where this is just complicated. So, first of all, I don't think that this guy should have been detained by ICE specifically for what he said. And we're going to get to this in a little bit. The only disagreement I have, Ryan, is that there is a leftist kind of view of the world that any foreigner has a right to enter the United States. Right. So what you're talking about is the fundamental inalienable right of any American citizen, which I absolutely do agree with you. And now the British and us, many countries, Australia and others have, do have policies where you are allowed to deny entry based upon any criteria that you want. And I actually do support that because you shouldn't necessarily host somebody who, let's say that this person did, quote, hate America. Now, what I think is very telling about this entire thing is that the ICE detention is justified entirely for Hamdi's views of October 7th. And that's why I do think that this is the Most objectionable forum because it's specifically about censorship and detention on the issue of Israel itself. Now, at the very same time that Hamdi is being detained at Los Angeles airport or what? No, I forget. Some California airport. He's being detained by airport. There are members of the IDF who openly celebrate the murder of children who fly here. Some are not even dual citizens and are vacationing, let's say, in Los Angeles in coffee shops. So to draw, like a moral line about what someone can and cannot say on a foreign conflict, and then to detain and deny entry based singularly on that issue. I do think it's telling that the one clip that they put out had nothing to do with the US Right. Because it is that. It is actually different if what you're saying is if somebody said they deserve 9 11.
- [31:09]
Ben Smith
Right, right.
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Ryan Grim
I actually do think that's different if you said that. I don't know, maybe we can't. We actually do have the right to deny your visa. Now, I'm not saying you should be detained and put into ICE or whatever, but I'm saying, yeah, yeah, maybe you shouldn't come here. And we do get to.
- [31:20]
Ben Smith
Right.
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Ryan Grim
We have our absolute and an absolute right to deny who can and cannot enter. So with that context, note that the only clip they did put out was specifically about October 7th, which didn't happen here. It didn't happen to our people. It's entirely based on something that happened elsewhere. Let's take a listen. Netanyahu did not envisage that for the first time since 1948, the Palestinians would.
- [31:45]
Krystal Ball
Actually retake land back from the Israelis.
- [31:49]
Ryan Grim
Netanyahu did not envisage that for the.
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Krystal Ball
First time since 1948, the Palestinians would be able to hold those territories for.
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Ryan Grim
More than 72 hours.
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Krystal Ball
We are pitying a people who brought a huge victory since 1948. Don't pity them.
- [32:04]
Ryan Grim
They don't want your pity.
- [32:06]
Krystal Ball
Celebrate the victory. Allah has shown the world that no normalization can erase the Palestinian cause. When everybody thought it was finished, it's roaring. How many of you feel it in your hearts when you got the news that it happened, how many of you felt the euphoria? Allahu Akbar. How many of you felt it?
- [32:26]
Ben Smith
Why did you feel it?
- [32:27]
Ryan Grim
Because in despair, vanish.
- [32:28]
Krystal Ball
You said, this Ummah is alive.
- [32:31]
Ryan Grim
So that's what they're claiming that he said. I do. I actually don't know entirely if that's been clipped or anything.
- [32:36]
Krystal Ball
Well, I mean, yeah, what he's, you know, what he's saying there is that. Look, it brought the cause of Palestinian liberation back onto the national stage. And you should remember that even as you feel so terrible about the response. And he has previously in other times said that it was a catastrophe and that it was. I forget his exact terminology that he. So, you know, he has a more nuanced view of it.
- [33:03]
Ryan Grim
Sure.
- [33:03]
Krystal Ball
But I think he got it.
- [33:05]
Ben Smith
I think he's able to think.
- [33:05]
Krystal Ball
Whatever.
- [33:06]
Ryan Grim
Listen, I'm with you, all right? You think what you want about Palestine, okay? And if you have a problem with it in Britain, that's your problem. You guys can figure it out for yourselves. I think he's getting a little close to the line there, if you ask me. But. And this is kind of where I get to. And this is where the nanny finger wagging from a lot of people starts to bug me. It's like, guys, how many times do I see these people cheering on Israeli murderer of children? I literally saw. You know, there are people here who I saw tweeting about this, and they have past statements being like, I don't feel for the Palestinians deserve to watch their children starve. I'm just like, okay, like, I'm gonna take a moral lesson from you about what's acceptable rhetoric and not. Sorry, you know, I'm out. I'm out.
- [33:46]
Krystal Ball
On Randy Fine.
- [33:47]
Ryan Grim
Right? Yeah, exactly.
- [33:48]
Krystal Ball
All the time. Will Chamberlain.
- [33:50]
Ben Smith
Yeah.
- [33:51]
Krystal Ball
Not to be confused with the basketball player who, you know, will say, you know, he's been on the show. Deport. Yeah, deport him. Deport, deport, deport. You know, five times a day. He's trying to get, you know, he's circled around on this one. He's a Randy Fine Republican. Like, he's. He. He will say things that are, you know, far more atrocious than anything that Sammy has said. And to me, and that's okay. That's the whole. That's the strength of the country. There's a patheticness and a weakness to a country that can't allow somebody to speak at a small gala because they said something that you didn't like about.
- [34:33]
Ryan Grim
For me, it's the selectivity. For me, it's selective. Specifically on October 7th. But, you know, nothing new happening here in the United States of America so far. All right, let's get to snap, shall we? I turned off news altogether.
- [34:48]
Krystal Ball
I hate to say it, but I don't trust much of anything.
- [34:52]
Ryan Grim
It's the rage bait.
- [34:55]
Krystal Ball
It feels like it's trying to divide people. We got clear facts. Maybe we can calm down a little bit. NBC News brings you clear reporting. Let's meet at the facts. Let's move forward from there. NBC News reporting for America. Military life isn't predictable, but earning your master's degree can be. With American Military University's 40 + flexible online master's programs, you can stay mission ready while you get market ready. Learn anywhere, anytime with an education built to keep pace, steady, reliable and always accessible. Plus, military service members, veterans and their families can save up to 45% on master's tuition with AMU's special rates and grants. Learn more at AMU Apus Edu Steady through every mission. This is Jacob Goldstein from what's yous Problem? When you buy business software from lots of vendors, the costs add up and it gets complicated and confusing. Odoo solves this. It's a single company that sells a suite of enterprise apps that handles everything from accounting to inventory to sales. Odoo is all connected on a single platform. In a simple and affordable way, you can save money without missing out on the features you need. Check out Odoo at o d o.
- [36:12]
Ryan Grim
O.Com that's o d o o.com as.
- [36:19]
Krystal Ball
The government shutdown continues into likely November, food stamps are now on the chopping block. People's food stamps start getting re upped on Friday or Monday. But because of the Trump administration decision, we can put up E1 or this is an arguable point. According to Democrats, because of a Trump administration decision not to use funds that are available to in an emergency for SNAP benefits, they will be lapsing for the next month. You put up E1 here. This is New York hunger and cold looms as shutdown imperils funding for anti poverty programs. And so you have this now bipartisan push to, a bipartisan push to save SNAP benefits because over 40 million people rely on these benefits. And many of those people, you know, we're now at the as many of our viewers will know who scrape by to get to the end of the month. We're at the end of the month now. And so people are kind of holding their breath, hanging on, waiting for the, waiting for things to come in on the first of the month. And when that doesn't happen and you can't catch a breath, you then your only choice then becomes like hitting these food banks which are now, you know, massively overstretched as a result of, well.
- [37:48]
Ryan Grim
Especially where we are, where we are in the DMV because people have been out of paycheck now for 28 days. It's, it's grim out here.
- [37:55]
Krystal Ball
Yes.
- [37:55]
Ryan Grim
From what I have been told, food banks and more this by the way, people, the federal workers are at least going to get their money back. There's all kinds of downstream effects here in our economy.
- [38:05]
Krystal Ball
I mean this is, it's always dicey for contractors. Like if you.
- [38:09]
Ryan Grim
Oh, the contractors don't get paid.
- [38:10]
Krystal Ball
Right.
- [38:10]
Ryan Grim
But then think about all the. I talked to my barber, right? I was like, hey, how's business? He's like, it's horrible. Nobody's going to work. I don't need a haircut. He's like, I don't get back pay. Right.
- [38:17]
Krystal Ball
So he's not gonna.
- [38:18]
Ryan Grim
I mean there's, and there multiply that by like 20 across. All kinds of different. I don't know, the lunch places, small businesses, the guys at the Pentagon who sell hot dogs. Like everybody is taking a bath. Not. I know most people watching this don't care, but it just.
- [38:32]
Krystal Ball
Locally it's not just D.C. you can understand. Federal workers are all over the place.
- [38:35]
Ryan Grim
Yeah, it's 2 million people. 2 million people getting paid. That's just huge. I mean banks, you know, mortgage payments, like there's all kinds of cascading effects throughout the system. Let's go and put the next one up on the screen. Cuz this does highlight some of the bipartisanship around this. Senator Josh Hawley wrote this op ed no American should go to bed hungry here. He proposes the federal government's been shut down for 28 days. 28 days too long. Congress must not let that happen. And he is now co sponsoring or has now introduced a bill, Ryan, which would kind of one shot funding immediately for the SNAP program which actually itself has a ton of Republican co sponsors. Let's put that one up next please. So you can see here wide variety. James Langford, Lisa Murkowski, Susan Collins, Marcia Blackburn, Bernie Moreno, Kevin Kramer, Bill Cassidy, Katie Boyd, John Cornyn, John Hunsted and Peter Welch. So you have one Democrat there, but I believe many other Democrats would support at least some sort of SNAP immediate funding. It doesn't though appear as if that's going to make its way through Congress. And there seems to be some brinksmanship right now between the congressional leaders where Mike Johnson and others, they want SNAP not to go out because they want pressure to go on the Democrats to fold.
- [39:50]
Ben Smith
Right.
- [39:51]
Ryan Grim
Vice versa by the way, from the Democrats is they don't want it to come out because they want the Republicans to fold to them.
- [39:55]
Ben Smith
I don't know.
- [39:56]
Ryan Grim
I mean we're coming up on that November 4th, first potential deadline. What do you think is gonna happen?
- [40:00]
Krystal Ball
Yeah. So on the Senate Democratic side, you're seeing, you saw an interesting kind of political tactical shift where just last week, Senator John Thune, the Republican, was saying, well, let's selectively just open a few pieces of the government. Wouldn't that be fair? So that, and then we continue hashing this out. And Schumer at the time said, no, all or nothing. You know, just extend the subsidies for Obamacare, do a CR for the end of the year and then we're done. Schumer has now flipped and Schumer is now pushing for these individual votes around things like this to say, because they think that for whatever reason, Schumer now thinks that that's to their tactical advantage. And then I think he also probably assumes that Republicans are now going to be on the blocking side of it because, because Mike Johnson has been. Has, you know, if you remember, he adjourned the House so as not to have to.
- [40:58]
Ryan Grim
And no votes, no Epstein vote, no.
- [41:00]
Krystal Ball
Swearing vote, so as not to have an Epstein vote and so as not to swear in Adelita Grijalva, Roald Grijalva's daughter, who won, who won her seat in a special election. Think about this. 700,000 people in this country elected a member of Congress in a special election and Mike Johnson is just refusing to swear her in. Like, that's constitutional crisis level stuff. He's like, well, it's. Don't worry about it. We'll get to it eventually. You're starting to get pressure from people like MTG and others who are like, why are we out of. Why what are we doing? Like, why are we still out of session? Like, we're elected to be in Congress. Like, Gavila's back in. So if Grijalva, when Grijalva is finally sworn in, that will be the 218th vote. They need to force an Epstein vote. And so I think Schumer also sees like, okay, well, they're not even in session, so there's no risk of them actually doing this. And if they go forward with snap benefits, that's good for Democrats because then we can last longer because there's less pressure on us. So Schumer has now shifted on that. But there's also a legal strategy underway. If we can put up E4, 25 states are suing the Trump administration because it's actually not obvious that the program's out of money. Like, the way it's been reported in the press is like, oh, because of the government shutdown, snap benefits aren't going to be paid. Well, yes and no. There's a contingency fund that has been set up by Congress precisely for these shutdown scenarios so that payments keep going out. Russ votes unsurprising to anybody who knows Russ vote is interpreting it such that he doesn't have to give the money out. We can put up E5. So this is from Elizabeth Warren posted this. This has since been deleted from the government website. But you know, as Trump's own government website said, OMB's general counsel provide a letter to USD on USDA May 23, 2025 stating that there is a bona fide need to obligate bank benefits for October, the first month of the fiscal year, during or prior to the month of September, thereby guaranteeing that benefit funds are available for program operations even in the event of a government shutdown. So that is a very important fact of this conversation to understand. It is not, according to that reading, the shutdown that is preventing food stamps from getting doled out. It is a explicit decision by Russ Vode and by the Trump administration to withhold it in order to put extra pressure on Democrats. And also I think Russ vote just likes to withhold money. Right? Yeah, that's a fair. Well, I don't know if he would.
- [43:44]
Ryan Grim
I think their pressure, I mean if you statistically would look at it. And who are going to be the most dependent on food stamps? I mean, I actually don't know considering the way that things have aligned more recently. But traditionally that would be more of a Democratic constitution constituency.
- [43:56]
Krystal Ball
But not necessarily still the case.
- [43:58]
Ryan Grim
I was gonna say, I don't think.
- [43:59]
Krystal Ball
It'S really the case anymore. What people need to understand is it's overwhelmingly people with children like 90, well over 90%. These are.
- [44:06]
Ryan Grim
Well, yeah, why don't you go into that, Ryan? I'm seeing a lot of right wing people like I can't believe 42 million people are on food stamps. These people are all bums and on welfare. What is.
- [44:14]
Krystal Ball
Yeah, these are kids. I, I grew up on food stamps. Raised, you know, raised by a single mom. So we would get, we would get, you know, EBT and you know, there's still only certain things you can buy at the grocery store with it. Actually for my 18th birthday I got to use the card here.
- [44:32]
Ryan Grim
I have the key. They have the eligibility criteria. Household grossly month income must be adorably 1/3 and 30% of the federal poverty level.
- [44:40]
Krystal Ball
House net income, which for a family of four, that's. Go ahead.
- [44:43]
Ryan Grim
Right. Yeah. So then resources and asset limits. Households without A member of 60 plus must generally have assets at or below a set limit. Households with member 60 plus with disabilities may have higher resource limits. 2 Be Eligible households must be U.S. citizens, lawfully permanent non citizens. Many able bodied adults without dependents must meet work or training requirements. There are exemptions for people who are pregnant and elderly disabled. A household for SNAP means a group of people who live together, purchase and prepare food together. Some states have specific rules for students. So generally it's like, looks like 130% of the federal poverty level, which for.
- [45:17]
Krystal Ball
A family of four is about $40,000.
- [45:20]
Ryan Grim
Okay, so that's not a lot of money.
- [45:22]
Krystal Ball
It's not a lot of money at all. And the asset. So yeah, 42,000, you have to. 42,000 is the most you can make for a family of four in order to get these very modest benefits. We're not talking like huge amounts of money here that you can spend at the grocery store. And the asset limits that they're talking about are also incredibly draconian. So like, if, let's say you inherit like $7,000 from like say your great great aunt dies or something, boom, you're out of the program just because you briefly went over it. It's kind of anti American in the way that it. Or an un American in the way that it. Like how so holds people back. Like you're, if you, if you, if you try to pull yourself up by your bootstraps, which people are always being told to do, and you have a successful couple of months, all of a sudden, because you now have 3,000 or whatever dollars in the bank, you lose everything, lose whatever medical benefits you were getting, you lose your food stamps.
- [46:29]
Ryan Grim
You should phase out at some point.
- [46:30]
Krystal Ball
You might phase out at some point, but we don't, we don't have a system that really phases out at some point. We have this system of cliffs that. And also you're going to lose your energy insistence because you had this one good month or something. So you have a much greater risk of losing everything if you have a little bit of success. So a lot of people are like, well, I better just do nothing and just stay here underneath this thing. So I don't.
- [46:57]
Ryan Grim
Kind of damned if you do if you don't, damn if you don't.
- [46:59]
Krystal Ball
I don't disagree with you, I think, which is crazy. Yeah, it should be a phase out. Yeah, clearly should be a phase out so that you are incentivized. You, you earn a thousand dollars over this limit. All right, you give, make it a tax. You, you give 20% or whatever, something that still incentivizes you to go out.
- [47:17]
Ryan Grim
Rather than sounding like a Republican right now about how it incentivizes people to.
- [47:20]
Krystal Ball
Stay in the public. Fine. It's like. But no, it is.
- [47:24]
Ryan Grim
That's why I thought it was important because. Because I unfortunately, I always see this happen. It's like you get Reagan era talking points around welfare and I think what people actually don't understand is how insanely poor you have to be to receive this.
- [47:39]
Krystal Ball
It's like 42,000.
- [47:40]
Ryan Grim
What do we talk about here on the show, by the way? The fact there are 42 million people on who are like making less than $40,000 a year in Canada and most.
- [47:47]
Krystal Ball
Of them with kids. Like, to get it without kids is really hard.
- [47:49]
Ben Smith
Yeah.
- [47:49]
Krystal Ball
I mean, and you get like $12 a month.
- [47:51]
Ben Smith
Month.
- [47:52]
Krystal Ball
Or if you're like, if you're like a single adult, 35 years old, you.
- [47:55]
Ryan Grim
And I know the cost, unit cost of diapers and any of this. Good luck, actually. Yeah. That is one where it is fascinating. I think that on the snap, I mean, around the discourse around snap originally, if you'll recall, there was some MAHA elements to try and to reform SNAP to get away from sweetened drinks and sugar and process food. However, I recently also saw a study that many people who eat at home end up eating higher calorie food and it's because they buy processed food from the grocery store in some cases and will binge eat based upon that. So our whole food system, everything is so, so screwed up. The only way to even get around it would be literally some authoritarian. We just, we're about to do segment about China. Some authoritarian level. Actually. RFK Jr. At one point proposed that organic healthy food be delivered to every American on snap. I actually think that's a good idea as long as you replace, you know, all of these subsidies to sugary soda, to Goldfish lunchables, whatever. Kids aren't eating lunchables now. They eat Logan Paul's. I don't know what it's called, but that's my prime energy drinks or you know, all this other crap that they're eating at the grocery store. Unfortunately though, that seems to be a dead end now. It's just whether they get food or not.
- [49:16]
Krystal Ball
Right.
- [49:16]
Ryan Grim
It's very sad.
- [49:17]
Krystal Ball
Yeah. No, so and so. Yeah, this like, this is, this is hitting for people like right now.
- [49:23]
Ben Smith
Yeah.
- [49:24]
Ryan Grim
Yeah. So one more. What is it? It's October 29th. Their theory, by the way. I heard a theory yesterday. I'll share with all of you. This is a little DC scooplet there's a current theory from both the parties apparently, that they want to make it so that Thanksgiving travel is as miserable as possible so that eventually people will care about the shutdown. So they're gonna try and actually make the air traffic control situation go wild with TSA and everything.
- [49:51]
Krystal Ball
That's what we need is people getting killed in air.
- [49:53]
Ben Smith
Yeah.
- [49:53]
Ryan Grim
The busiest day of the entire travel year. And well, it's not that people would die, it's just there would be cascading delays throughout the system, make everybody miserable, and then millions of people would rise up and theoretically would blame one party.
- [50:05]
Krystal Ball
Remember, that's what ended the last shutdown. When was 2018. Yeah. The air traffic control. The head of the air traffic control. Not air traffic. The flight attendant union. Sarah. What's her name?
- [50:15]
Ryan Grim
Nelson.
- [50:16]
Krystal Ball
Fly with. Yeah, yeah, yeah. She came out and was like, you get a deal by Friday or we're going on strike. And they got do it again. And they got a deal. Sarah Nelson has. Sarah. Sarah, where have you been? Sarah Nelson has been. I should not have forgotten Sarah Nelson's name because she was like a bunch of times she talked about as like a vice president.
- [50:37]
Ryan Grim
I know, I remember a couple years ago. We've interviewed a million times here on the show. I remember her.
- [50:41]
Krystal Ball
Yeah. Sarah, come on, fly in and solve this thing for us, please.
- [50:44]
Ryan Grim
Yeah, please, please. Put pressure on the system.
- [50:46]
Krystal Ball
Last, last thing. People like SNAP benefits put up E6 most recent poll. Americans oppose cutting food stamp benefits by 66 to 23. It's an overwhelmingly popular thing. Cause it's like, like these are people with kids who are poor, they deserve to eat. That turns out to be something that the American people generally agree with.
- [51:13]
Ryan Grim
What's the least popular? Welfare.
- [51:15]
Krystal Ball
Let's see, what do we got here? I'm actually curious.
- [51:20]
Ryan Grim
Oppose sending 45 billion to build and maintain migrant detention camps.
- [51:25]
Krystal Ball
Is that the least popular?
- [51:26]
Ryan Grim
Yeah, that's one of them. Reducing federal funding for food assistance to low income house. So that's reducing federal funding. Extending tax cuts for single incomes above 400k. That is definitely formal welfare. That's true.
- [51:39]
Krystal Ball
Here's the welfare they post. Extending tax cuts for business corporations.
- [51:43]
Ryan Grim
Extending tax cuts for Single incomes above 400k. Who supports extending tax cuts for people?
- [51:49]
Krystal Ball
The people making over 400k.
- [51:51]
Ryan Grim
Person making $400,000 a year. That's got to be what in the top. That's easily a top 1% income. I'm talking about W2 annual income.
- [52:00]
Krystal Ball
That's a lot of money. That probably is. Yeah. 29% support.
- [52:05]
Ryan Grim
Statistically 29 are not even making.
- [52:07]
Krystal Ball
No, they're not. 400k, that's like some solidarity for the rich.
- [52:11]
Ryan Grim
Yeah, that's like a 42k a year. W2.
- [52:14]
Krystal Ball
That's aspirational. Could be me those people plan to be.
- [52:17]
Ryan Grim
I mean, it could be you. Probably won't be, but anyway.
- [52:20]
Ben Smith
Anyway.
- [52:21]
Ryan Grim
All right, let's get to China. Ben Smith standing by. I turned off news altogether.
- [52:28]
Krystal Ball
I hate to say it, but I don't trust much of anything.
- [52:32]
Ryan Grim
It's the rage bait.
- [52:35]
Krystal Ball
It feels like it's trying to divide people. We got clear facts.
- [52:41]
Ryan Grim
Maybe we could calm down a little.
- [52:45]
Krystal Ball
NBC News brings you clear reporting. Let's meet at the Facts. Let's move forward from there. NBC News reporting for America. Military life isn't predictable, but earning your master's degree can be. With American Military University's 40 + flexible online master's programs, you can stay mission ready while you get market ready. Learn anywhere, anytime. With an education built to keep pace, steady, reliable and always accessible. Plus plus military service members, veterans and their families can save up to 45% on master's tuition with AMU's special rates and grants. Learn more at AMU Apus Edu. Steady through every mission. This is Jacob Goldstein from what's yous Problem? When you buy business software from lots of vendors, the costs add up and it gets complicated and confusing. Odoo solves this. It's a single company that sells a suite of enterprise apps that handles everything from accounting to inventory to sales. Odoo is all connected on a single platform in a simple and affordable way. You can save money without missing out on the features you need. Check out odoo@o d o o dot com. That's o d o o dot com.
- [53:59]
Ryan Grim
Very excited now to be joined by Ben Smith. He's the editor in chief of Semaphore and the host of the Mixed Signals podcast which everybody should go and subscribe to. Good to see you, Ben. Thanks for joining us.
- [54:09]
Ben Smith
Yeah, thanks for having me, guys.
- [54:10]
Ryan Grim
Ben, you wrote a fantastic story here. A very under noted in my opinion of the US China dynamic, which I think really hit the nail on the head. I've been involved in the space now for quite some time. Let's put this up here on the screen. Here's what you write. You talk specifically about how Trump is poised to end Washington's decade of the China hawks. First of all, why don't you just tell us some of the things that you noted with the trade deal that's now taking form. President Trump and President Xi scheduled to meet sometime in the next 48 hours or so, I believe, in South Korea. But why is Trump, who ushered in the decade of the China Hawks, also the one poised to end it? What did you find?
- [54:46]
Ben Smith
Yeah, I mean, you know, Trump ran in 2016 on, you know, a huge part, a huge part of that campaign, a huge part of his whole public career has been saying that when, you know, China joined the WTO in the early 2000s, that was, you know, the beginning of the end for American manufacturing and thus the beginning of the end for kind of America as we knew it and loved it. That that was the original sin. And we have to totally remake the US Relationship with China, which really means remaking the whole world for which China has been, you know, has basically so much of global manufacturing has shifted to China. And, and I think, you know, there was there, there and that came with a certain amount at times of, and we have to prepare to fight a war with them over Taiwan. And you know, and, and they're spying on us. We have to throw out all their students and a lot, there's a lot of very tough talk from him. And, and, and there's a group of very hardcore anti China people who, by the way, have been around forever. This is an old American debate. There's an old who lost China debate. You know, very intense support for Taiwan here for, you know, since Henry Luce was running Time magazine. But they, but basically, I think what we've seen over the last two weeks is that that has basically hit a dead end. The people, the most hawkish advisors to Trump are out this term, like a guy named Matt Pottinger, former Wall Street Journal reporter. And Trump is looking to make a deal that is basically going to restore the status quo ante, like he's going to drop the fentanyl tariffs. I mean, the stuff that ultimately felt kind of made up is now going away in exchange for making tariffs go away. And the notion that we're going to remake the world economy into one where all the dirt processing plants relocate to the US and China goes back to, I don't know, 1973 just does not seem like it's going to happen.
- [56:42]
Ryan Grim
Exactly.
- [56:43]
Krystal Ball
Was there a way you think that the hawks could have played their cards better and that if Trump had approached the tariff conflict differently, it seems like it was destined to fail by the way that he rolled it out, attacking the entire world at the same time. Everybody gets these arbitrary tariffs and we're going to put tariffs on things that we can't make here in The United States and China's response at the time seemed to be, okay, well, we're not going to buy any soybeans, or we're just going to wait you out because this is incoherent. It's not going to work. But it feels like we do have a lot of power. Like, something could have worked. Like, where did they go wrong here?
- [57:20]
Ben Smith
Yeah. I mean, ironically, the thing that if you really wanted to do your best to damage the Chinese economy and kind of contain their technological development, you'd probably do what the Biden administration did, which was basically blockade certain key technologies and get the Europeans to do it, too. And also, by the way, not buy their superior electronic electric vehicles and force Americans to. To purchase inferior Ford electric vehicles, which the Europeans had been doing. Looks like now the Canadians are just going to go and buy Chinese vehicles. I mean, the Europeans, surprisingly, are really kind of much more inclined to take a anti China stance, I think, than a lot of people here expect, because for them, the biggest issue is the war in Ukraine and China's on the wrong side of it.
- [58:04]
Ryan Grim
Yep, that's very important to note. I mean, one of the things, Ben, that I, you know, like I said, I've been in the space for a long time, kind of follow the discourse. What I noticed was that eight to 10 years ago in the China Hawk space, it seemed achievable. The idea of decoupling, the idea of industrialization. I mean, you and I have been around for a while. How many times have we heard about industrial policy? It's a bipartisan thing. It's 2025 now. You know, the made in China 2025 plan actually did come true. I was just looking at their original goals from 2015 to 2025. They mostly accomplished all of them. If you compare the rhetoric of the industrial policy, how we're gonna decouple from China, the progress of the Chips act here in the U.S. almost none of that has actually materialized and is not really on its way to doing so. If anything, a lot of it is being cut by the one big, beautiful bill. So in material terms, it seems to me that the playing field itself is just different now because we didn't do any of the requisite things that would have been able to be done to actually have some grand decoupling in the way that Steve Bannon envisioned in 2016.
- [59:07]
Ben Smith
Yeah, I mean, I think the thing is, if you had. If you'd hung around Congress five or ten years ago and you saw Mike Gallagher, this Wisconsin congressman chairing the China Committee, kind of and building this bipartisan consensus that it was just time for a radical break with China, a radical reshaping of that relationship. And with the support of a lot of Democrats, including very senior people in the Biden White House, you would have been plausible to think that that was going to happen, happen. And it has absolutely not happened. I mean, I do think one of the things that this administration has come up to face is basically, do we want to try to beat the Chinese at their own game, which is sort of scaled domestic manufacturing of very, very low margin goods. And you know, when you talk to about rare earths, what that is, is massive, massive plants processing dirt. And I think, you know, we've sort of walked up to that and it doesn't seem like there's a huge appetite to do that here, as opposed to very margin service exports in AI, in all sorts of digital services, where the US is really totally dominating the world. And I think it's been sort of the notion that the right strategy for the US is to try to beat China at its game rather than at our game does ultimately I think, give people pause. Yeah.
- [60:22]
Krystal Ball
And let me put another idea to you and you tell me if you think it's totally crazy. In the 1990s when there was this push for permanent normal trade relations with China and then also, and then eventually letting them into the wto, the idea that was presented to the American public and to the global public was that opening up the Chinese economy would also step two, step three, open up democracy and open China up politically. That they would see the virtues of this western liberal system and they would adopt it. What seems to have happened is that the contagion went the other way. So we seem to be adopting their system. Like the two systems saw each other. And the leaders of this country, particularly Trump at this point looked in the Chinese mirror and were like, oh, wow, this is interesting. I like the way that they dictate corporate policy by telling which companies that can merge with other companies, like they're now out publicly saying that who they want, who they want Warner Brothers to merge with. When it comes to TikTok, they're like, oh, this is pretty cool. And so we're just going to have a state run TikTok and my friend Larry Ellison will be the one that will run it and he'll design an algorithm that will work well, China can do their version of TikTok over there and we're going to buy 10% of this company. We're going to buy 10% of this company. So it really feels like the analysts were correct that the merging of the two systems would persuade one of them to adopt the others, but they had the direction wrong. Am I crazy here or are we.
- [62:09]
Ben Smith
Witnessing you're referring to, what do they call it? State capitalism with American characteristics? Yeah, I mean, I think that is superficially true. I mean the difference is that the Chinese government, because it's a communist dictatorship, is able to make extremely long term bets and stick to them. And so the kind of, sometimes with massive success, like the kind of infrastructure behind this kind of massively scaled industrial policy, whereas the US on things like cars is changing its strategy so frequently that it's really destroying the domestic auto industry. Very, very you like, maybe there's some future where people are driving internal using internal combustion engines and if the US had kind of made that counterintuitive bed and stuck with it, we'd be the one selling those cars. Or at least we. But instead we've. The country has sort of flip flopped a few times and just, it's very hard if you're running Ford or General Motors. It's just very, very hard to be competitive. And then the problem of course with being a, you know, communist dictatorship is you can't. Correct. And you know, the one things like the one child policy, which has created this horrific and was both incredibly inhumane and created this horrible demographic crisis, are also a product of the same thing. So I'm not sure like we should act. There is a moment right now I feel like people are watching like videos on TikTok of Chinese like iPhone stores that have cars in them and getting really excited. But it's not like things are not going great there necessarily.
- [63:34]
Ryan Grim
I don't know, I mean, things aren't great here either. So that's what causes people like me. Like, it seems clean, it's safe and it's nice. You know, I was in Chengdu over.
- [63:42]
Ben Smith
The summer and with my kids and they were just like, oh my God, we're so cooked. But I'm not sure it's that simple.
- [63:47]
Ryan Grim
Yeah, of course, it never is entirely.
- [63:50]
Krystal Ball
At least we have our freedoms here, right?
- [63:52]
Ben Smith
All right, Ryan, let's have like a nervous laugh. Yeah.
- [63:55]
Ryan Grim
Ben, my last question here is on the security doctrine because key to the industrial side of all of this was always the Taiwan question. Strategic ambiguity, according to a White House official, is officially here to stay. Trump technically said he was gonna talk to President Xi maybe about Taiwan sometime today, but even the discussion around Taiwan today seems very different than it was 10 years ago when there was an ironclad. I mean, frankly, even Biden said, I would defend Taiwan, he almost changed the strategic ambiguity policy. It doesn't seem like that is nearly as clear as it is today in 2025.
- [64:26]
Ben Smith
Yeah. I mean, Trump is sort of an everything's on the table dealmaker. And so there's this slight sense that, wait, does that include Taiwan and the US US Just demonstrably in our domestic politics, don't have a big appetite to fight foreign wars. I mean, I don't think there's something has radically changed, but the strategic ambiguity has shifted a little in the direction of the US Wouldn't engage. But although Trump, I think, is unpredictable enough that in some way he maintained, like, there's just a level of ambiguity right there that, I don't know, that a lot of people think will deter the Chinese from sort of opportunistically starting a war.
- [65:04]
Krystal Ball
Yeah, yeah. I don't know. Allowing the creation of this semiconductor industry in this island right off the Chinese coast seems to be not working out as well as planned. A little bit. Is, you know, does this. Does that essentially require the US to maintain some stable relationship? I mean, if. Because if it does go the way that we're thinking and there's some kind of mostly peaceful takeover of Taiwan.
- [65:31]
Ryan Grim
The.
- [65:31]
Krystal Ball
American economy is then that much more in hock.
- [65:36]
Ben Smith
Yeah. I mean, the US Economy is so profoundly dependent on many, many different things happening in China, and they're kind of just expression. The other week, it was really pretty breathtaking to say, any item made with these minerals that we mine, we get to control the use with a kind of global long arm forever. And don't worry, we'll issue permits swiftly. Like, that's, you know, they have a lot of power of the global economy. That's part of, I think, why the US Climbed down. The chips are part of it. You know, our sort of announcement that we're going to reclaim the chip industry and our attempts to cut them off from chip manufacturing do not actually really seem to yet have created a booming American chip industry, but have created very strong incentives for China to build its own competitive domestic chip industry. And now the Trump administration has decided, like, wait a second, the real way to prevent them from doing that is to sell them the Nvidia chips that we were blockading. And it is another instance where I think these are all rational decisions. Like, these are smart people making very difficult policy choices. But flipping. The US Strategy has really been defined by flipping between them.
- [66:42]
Ryan Grim
I think that's really well said. Everybody go and subscribe to Ben's podcast. Ben, thank you so much for joining us. Appreciate it.
- [66:46]
Ben Smith
Thank you guys. Nice to see you.
- [66:48]
Ryan Grim
Thank you guys so much for watching. We appreciate it. Thank you for having me. Ryan, Crystal and I will be on tomorrow. We will see you all then.
- [67:11]
Krystal Ball
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Ben Smith
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Ryan Grim
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Krystal Ball
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Ben Smith
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