← Breaking Points with Krystal and Saagar
Breaking Points with Krystal and Saagar
3/6/25: Markets Plummet Amid Tariffs, Trump Hamas Negotiations, AI General Intelligence & MORE!
01:37:55
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- [00:01]
Sagar Enjeti
Every day, our world gets a little more connected, but a little further apart. But then there are moments that remind us to be more human. Thank you for calling Amica Insurance. Hey, I was just in an accident.
- [00:18]
Krystal Ball
Don't worry, we'll get you taken care of.
- [00:20]
Sagar Enjeti
At Ameca, we understand that looking out for each other isn't new or groundbreaking. It's human. Ameca. Empathy is our best policy.
- [00:30]
Krystal Ball
Hey, it's Amy Brown from the Bobbi Bones Show.
- [00:32]
Sagar Enjeti
Join me in supporting St. Jude Children's.
- [00:34]
Krystal Ball
Research Hospital for a chance to win a trip to meet Megan Maroney at the 2025 I Heart Country Festival in Austin, Texas on May 3rd. Hosted by Bobby Bones, we're going to hook you up with tickets, flights, hotel, food credits and a meet and greet with Megan Maroney. Take action now to support St. Jude and help cure childhood cancer. And you're gonna be entered for a chance to win. Visit iheartcountrytrip.com to learn more.
- [01:03]
Sagar Enjeti
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Krystal Ball
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Krystal Ball
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Sagar Enjeti
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Krystal Ball
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Sagar Enjeti
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- [01:52]
Krystal Ball
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- [02:02]
Sagar Enjeti
Hey guys, Sagar and Kristal here.
- [02:04]
Krystal Ball
Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show.
- [02:11]
Sagar Enjeti
This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.
- [02:17]
Krystal Ball
So if that is something that's important to you, Please go to BreakingPoints.com, become a member today and you'll get access to our full shows unedited ad free and all put together for you every morning in your inbox.
- [02:28]
Sagar Enjeti
We need your help to build the future of independent news media and we hope to see you@breakingpoint.com Good morning everybody. Happy Thursday. We have an amazing show for everybody today. What do we have, Crystal?
- [02:39]
Krystal Ball
Indeed. We do many things to get to of course. As per usual, we got some updates on the tariff situation what is on, what is off? We've got some more warning signs with regards to the economy. Also increasingly clear AGI, artificial general intelligence is really just around the corner, expected to be here during the Trump administration. Is anyone ready for that? I really don't think so. We're going to take a look at that. Also some really contradictory signs about what Trump's approach is with regards to Gaza. So we'll give you all of the indications and all of the developments there. Andrew Tate now saying, actually I'm just like ready to leave America anyway, guys. I was just going to stay here for a couple of days and I'm out. So a lot going on there and some political, interesting sort of like political ramifications there as well. I'm taking a look at if Trump is going to cook the books on the economy. Some pretty clear indications in that direction. And we have the socialist candidate for New York City mayor who is going up against Andrew Cuomo is going to be on the show. He actually was on with Emily and Ryan before. His campaign has come a long way since then. He's actually polling as the top sort of progressive candidate in the race, which is pretty surprising. Kind of coming out of nowhere. So excited to talk to him as well.
- [03:51]
Sagar Enjeti
All right, so with all of. By the way, thank you to everybody who supports the show. We appreciate it very much. Been a very busy week here at Breaking Point. So let's go ahead and get to the tariffs. The most important economic news, the White House announcing yesterday that there will be some tariff exclusions specifically for automakers. Let's take a listen.
- [04:09]
Krystal Ball
We spoke with the big three auto dealers.
- [04:11]
Sagar Enjeti
We are going to give a one month exemption on any autos coming through USMCA. Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the President is giving them an exemption for.
- [04:27]
Krystal Ball
One month so they are not at an economic disadvantage.
- [04:31]
Sagar Enjeti
So the three companies that he spoke.
- [04:32]
Krystal Ball
To are Stellantis, Ford and General Motors. One on the reprieve that is being granted to these three automakers for one month on the tariffs on Canada and Mexico. How did the president settle on one month? The reciprocal tariffs will go into effect on April 2.
- [04:46]
Sagar Enjeti
And he feels strongly about that, no matter what. No exemption.
- [04:50]
Krystal Ball
So that's where the one month comes from. So does he expect them to be able to shift production within a month?
- [04:55]
Sagar Enjeti
He told them that they should get on it, start investing, start moving, shift production here to the United States of America where they will pay no tariff. That's the ultimate goal. So there was some initial confusion there. From that announcement, it initially appeared as if it only applied to the big three automakers. But the White House has since clarified that those tariff exemptions are for all automakers. The reason why that this is most significant is because part of USMCA and of NAFTA is that many of these car companies are vertically integrated across all three countries and that many of these parts crystal will move across the border some almost 40 or 50 times in the most extreme example. And so the idea was if it was gonna get hit with a 25% tariff every single time that it crossed the border, you would famously have those examples of a car going from 50,000 to like 80 or $90,000, something like that, one month exclus as the question there was like, that's not exactly time. This seems to be part of the chaos. Blunt force strategy to try and see as much progress or announcements or whatever Trump can squeeze out of them. But the market reaction has been all over the place over the last couple of days. And so the pendulum continues to swing back and forth and back and forth.
- [06:08]
Krystal Ball
Yeah, indeed. I mean, is it crazy for me to think that he saw that Fox News segment with the car dealer guy who was like, this same truck is going up 20k like right now instantly. And Maria Bartiromo being like, oh my God, what is going on here? Like, I genuinely think that may have been part of the calculus going into this. I was a little bit surprised there wasn't more of a rollback of the tariffs that is just applying to the auto industry. The other part that was kind of funny to me is like the one group that came out and was like, actually we like the tariffs was the United Auto Workers. And now that's the one industry where it's being rolled back. The other thing that was surprising to me is you were alluding to the markets, is how positively the markets responded to this news. Since you are just talking about one sector of the economy. Granted, of course it is a significant sector, but the plan is for them to go back in place in a month. All of the tariffs on Mexico are still there. The tariffs announced on China still there, all of the rest of the tariffs on Canada still there. And Justin Trudeau in Canada still talking pretty tough, saying, listen, unless all of the tariffs are rolled back, we are continuing with our retaliatory tariffs. So, you know, people should be really clear about what this means. It will have significant impact on a lot of produce coming from Mexico, you know, from Canada. The tariff on, on energy is lower, but still they're still expecting significant gas price increases, including, I think in New England was the first place that you're likely to see gas prices go up some 20 to 40 cents pretty quickly here. New construction materials, a significant amount of that comes from Canada. And then depending on how long this lasts, 80% of the fertilizer that's used in the US comes from Canada as well. So even with the rollback of this one particular sector, which is, again, it's significant, you're still going to have quite significant and reverberating impacts across the economy if they continue to move forward with these.
- [08:01]
Sagar Enjeti
Yeah, there's been some crazy movement on this. So you referenced the markets. The markets were up yesterday. The S and P erased its day loss. And yet as of this morning, you and I are talking the S and P futures have now erased yesterday's gains. So we're basically back to where we were two days ago. So I don't, don't ask me. I'm not some stock analyst. I can only go off of what the Wall Street Journal and the Financial Times and all of them are saying. They're saying that right now the Dow future and all of that dropping is from a weakening dollar. And also they are saying that the indexes will reverse the rally of the partial rollback, also apparently in response to the German government and European bond market. So there's a lot going on right now. Actually, interestingly enough, almost all of it comes back to Trump, both on the German side and on the tariff side. The Commerce Secretary, Howard Lutnick, Commerce Secretary, by the way, is the person who is most in charge of the tariffs. Their responsibility under the current law is that they're the ones who write those justifications for them implement the tariffs. Specifically. Let's take a listen to what Secretary Lutnick had to say. The Big three say they produce cars.
- [09:11]
Krystal Ball
That are compliant under usmca, which means they have sufficient US Content in them.
- [09:18]
Sagar Enjeti
To be part of the USMCA agreement. So I think that's part of our discussion and the president's really thinking about that. It's not really an exemption, remember.
- [09:30]
Krystal Ball
It's we're trying to end fentanyl coming into the country. So we're trying to send a message that fentanyl has got to end coming.
- [09:39]
Sagar Enjeti
In from Mexico and Canada.
- [09:40]
Krystal Ball
It just has to end and they've.
- [09:43]
Sagar Enjeti
Done a reasonable job on the border.
- [09:44]
Krystal Ball
And they're going to do a better.
- [09:46]
Sagar Enjeti
Job on the border.
- [09:46]
Krystal Ball
But this is, remember, it's a key.
- [09:48]
Sagar Enjeti
About fentanyl for this month, April 2nd, we could talk about the rest.
- [09:52]
Krystal Ball
Deaths in America have not decreased in.
- [09:55]
Sagar Enjeti
A way that is sufficient deaths of America. But yesterday though, the President questioned the fairness of Canadian banks. So what is it about? Is it about Canada's banking system or is it really about fentanyl? So this month, right now is about fentanyl. When we talk about April 2, we will talk about the bigger trade picture between our trading partners, Canada and our trading partners of Mexico. So just to reiterate here, they have to say fentanyl because it's the only way they can get that national security exemption through law. Because otherwise you can't just say, oh, I don't agree with Canadian banking or whatever because we have a USMCA agreement that's been ratified by Congress. This is the only way that you can actually get around that. We do though need to flag that. The problem with all of this strategy is that Americans need to feel as if there's a big strategy behind it. And we flagged this in our pre State of the Union coverage. But this is very important. Let's put this up there on the screen from the New York Times. Here is how Americans feel about tariffs. So you've got some 29% of Americans to 56% of Americans, depending on how the question is asked, who are in favor of tariffs. Now the tariffs that have the highest Support in the mid-50s are when you ask a question specifically about China. Now if you mention Canada and Mexico, the support for the tariffs starts to fall. Now the tariffs hover almost at a 50% approval rating if they're to bring back American jobs. But if you add the caveat of even if price increases, then you drop down to 30%. And that's not a surprise to me at all. Americans are some of the most cost conscious people literally on Earth. We're 70% consumer based economy. And the real thing is is all of this would have to be communicated in a way as if people feel that there is a big strategy behind this. Cause if you're gonna jack the price of a car up or groceries or all of that, you need to have a reason. And look, I've spoken about Canada and Mexico. I do think our trade imbalances are ridiculous with those two countries. However, the problem is right now is that these people are, the American people are not being sold a coherent vision on how this is all going to work. And that's evidenced by the constant roll in and roll back of the strategy. Right? So the automaker is the Perfect example. Because out of all of the industries that most need and deserve tariffs specifically from this bring back American jobs, it's the automaker specifically. That one industry where it should be most applicable and not say, on groceries. We talked here about. Avocado berries is probably a better example. I don't think we grow any berries in the continental United States. But so if you're giving the exemption to one, jacking the price up on another, rolling back something here, and people are also saying it's about fentanyl, people are just gonna be like, okay, what the hell is this all about? And I think that's the biggest problem that the White House has right now.
- [12:54]
Krystal Ball
Totally. I do think we grow some berries in California. I know that we grow some strawberries there and some other things. Yeah. But in any case, your point still stands. It's significant. And you know, there's certain things too that, okay, we can grow them here in one particular season, but we're all used to getting everything we want all the time in the grocery store, whenever we want it, even when it is the dead of winter. Those are the sorts of things, products that are really going to have pressure put on them here, you know, at a time when people are particularly cost conscious. Obviously, inflation has been one of the major political stories of the past several years, you know, towards the end of COVID and certainly post Covid. So, you know, that's what I've mentioned before, is the economic landscape now and the economic priority of Americans is also different from when Trump first came into office. So I think even if he was telling a coherent story about what these tariffs could deliver in terms of re industrializing America or, you know, American jobs. And yes, we're going to have some pain in the short term, but in the long term, it's all going to run out, work out. I think even if he was telling that story, it would be a tough sell and he's not telling that story. The messaging is completely confused. Even Mexico and Canada don't really know what the hell he's doing or what the hell he wants his advisors. I saw Peter Navarro go on last night and be like, Canada's being taken over by Mexican cartels, so they're really pushing the fentanyl line, even though we all know that that's just a pretext for him to be able to have as much authority as he wants and do whatever he wants. And I think your point about the auto industry is a really important one. Like if you were going to make the case for these tariffs in Any industry. The auto industry is the place where you have actually the most compelling case where you could say, okay, we want to have a really strong auto industry here. This is important to our manufacturing base. It's certainly important in a number of key swing states. We're going to really invest in this industry. We're going to put some protective barriers around it. We're going to bring back, you know, all these supply chains into the US that have gone over to Canada and Mexico since NAFTA was instituted, but instead that's the one that is getting the break. So, yeah, I think, you know, politically, I think this is really a nonstarter in terms of the way that it is. I mean, it's not being sold and you know, I don't think the policy makes sense anyway outside of, you know, there are some theories of some sort of grand plan to weaken the dollar and for that to cause the re industrialization. But again, if that's your goal, you need to be explaining that to people. And at the same time, you see you're really flirting with disaster economically, which we're going to talk about more in the next block as well.
- [15:28]
Sagar Enjeti
Yes, exactly. You really got to keep these things. You need to keep things such that they are explainable and understandable, especially if you're going to suffer. And part of the other problem is I've seen the secretary say things like, oh, well, people aren't going to feel it because we're going to be taking in so much money. And it's like, okay, well then you gotta have a pretty explicit redistribution program. Maybe people could get behind that. I don't see the Republican Congress going tomorrow yet for some sort of external revenue service that's constantly just cutting checks to Americans in terms of their tariff dividend. If you did that, yeah, maybe it'd be popular, but it'd be one of those where it actually, it would mean that you would have to dramatically change the entire system of which I don't see a lot of congressional support for right now. So you could have the worst of all worlds. You could have higher prices and you could not have any redistribution. If not even that, you could actually have cuts there and, or a diminishment of services. And so if you do feel like as a price is going to go down and your government services are also going to go, or price is going to go up and your government services go down, that's not a very good trade, is it? So let's continue here on this front. There have definitely been some CEOs who are doing everything they can to get Trump's ear. Let's put this up there on the screen. The latest gambit is to meet one on one with the president. You've gotta give $5 million to one of his organizations and that doesn't directly go to him, but it goes to MAGA Inc. Or the Make America Great Again Inc. It's a super PAC that supports the Trump 2024 campaign. Somewhere between $1 million a piece to dine with him in a group setting. $5 million for a one on one. And so did the big three pony that up? Not sure. I mean they probably can get his ear anytime. But this has certainly been something that we have seen in the nearest future is that people, Mar A Lago members and others have been getting in his ear and it's had significant changes on policy. The best example is probably Jeff Yass who has a huge share in TikTok and in ByteDance. Probably single handedly most responsible for Trump's about face on that. We haven't talked a lot here about the crypto industry, but this is kind of, this is unprecedented to say the least. Because what do you need the money for? You're not running for anything. It's like what is all this money being funneled into your campaign or your super PAC for? And it's a little grotesque especially to have basically pay for play with the President at his private club. Not saying it hasn't happened previously with Trump or I guess with other presidents, but this is just a little bit on the nose right now.
- [18:01]
Krystal Ball
Yeah, absolutely. No doubt about it. And we also know the way that he's able to round trip some of those funds out of the campaign account into his personal bank account. Like, hey, we're going to rent Mar A Lago for this event for the Republican Party. Hey, we're going to use this or that vendor that actually is under the Trump family umbrella. So one of the things that is unprecedented about him in particular with his business interests, is the ability to funnel that campaign cash actually directly into his bank account. And then the shitcoin is just something else entirely. I mean, we've talked before about this crypto dude who had a big SEC investigation going. He gives $75 million while he, you know, buys $75 million worth of Trump crypto tokens. And lo and behold, SEC dropped the investigation. Huh? Isn't that nice for him? I mean it just, it truly is like listen, we're none of us are Pollyanna here. We know corruption politics is nothing new. This is like on a truly another level that's hard to describe just how corrupt it is. And then also because you've had so much power consolidated with Trump and Elon in particular, it also becomes much more important to curry direct favor with him. So Elon yesterday was meeting with the Republican caucus and saying like, oh, I'm going to set up a phone line so you guys can call directly. If there are programs in your district, in your state that are important, that are getting cut, well, guess who's not going to have access to that phone line? Any blue state representative. So it truly is just like if you're in the favored class either because you gave money to Trump, you bought his shit coin, you happen to be a Republican, especially a Republican of state that matters to them politically, then you're going to get your favors, you're going to get your goodies and everyone else is going to be screwed. So you know, that's why you see the tech oligarchs lining up at the inauguration, why you see them bending the knee, why you see them donating millions of dollars to the inauguration fund, et cetera, because they want to make sure their mergers go through. They want to make sure when the tariff regime gets put into place, they get their particular car van and their interests are looked after. And you know, that's very much the story of how this administration is being run.
- [20:11]
Sagar Enjeti
Let's go to the economy then in terms of the warning signs.
- [20:14]
Krystal Ball
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- [20:18]
Sagar Enjeti
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- [20:27]
Krystal Ball
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Sagar Enjeti
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- [20:33]
Krystal Ball
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- [20:35]
Sagar Enjeti
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- [20:43]
Krystal Ball
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- [20:45]
Sagar Enjeti
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- [22:15]
Krystal Ball
So this all sort of ties in. Harry Anton did a great segment breaking down some of the polling numbers about how Americans feel Trump is doing on the economy and specifically whether they feel like he is focusing on economic issues. Enough. Let's take a listen to what he had to say.
- [22:31]
Sagar Enjeti
The answer to the question is no Trump in the economy. He should prioritize. Here on planet Earth, 82% said it's almost as if Trump is on Planet Krypton.
- [22:39]
Krystal Ball
Look at this.
- [22:39]
Sagar Enjeti
He is prioritizing the economy just 36%. My goodness gracious. I don't understand how this mathematical formula works, right? If the economy is the number one issue, if that's what Americans think you should be prioritizing and well, less than half think that you are, no wonder Trump is having problems with the economy because simply put, he's not putting it to the top of his list the way Americans are. American adults who have a job currently.
- [23:03]
Krystal Ball
At least in January, was 61%.
- [23:05]
Sagar Enjeti
The percentage that own a stock, either directly or indirectly. Perhaps your 401k 62%. So stock, the stock market is as important to economic perceptions in my mind.
- [23:17]
Krystal Ball
As is the unemployment number. Given that about the same percentage of Americans. In fact, if you believe it though.
- [23:22]
Sagar Enjeti
It'S within the margin of error. One point more of the American folks actually own stock than actually have a job.
- [23:28]
Krystal Ball
I'm not sure about that last part. I'm not sure I'm really buying that people are more concerned with the stock market than the employment. I mean, stock market ownership is still very, very skewed. But it is an important point that, look, a lot of people are paying attention to this. Trump himself has always paid very close attention to what the stock market says. In fact, there's some old tweet of his that's like, you know, if the stock market drops this much two days in a row that president should be impeached that people have been circulating around here. Sagra it made me think back to his speech this week and what we talked about, that the front part was really front loaded with the, and that's the, you know, the first part is what most people will stick around and watch and then you'll see the clips that circulate after the fact. But that first portion of the speech really front loaded with culture war. If anything, it feels much more like Elon is the mover and shaker on the pieces relevant, most directly relevant to the economy. Now that sort of changes with Trump stepping up and instituting these tariffs, but changes in an even more negative way because the tariffs are pretty unpopular when you look at what people want him to be focusing on, which is getting prices down, not issuing tariffs that are very likely to raise prices even further than they already are.
- [24:39]
Sagar Enjeti
Yeah. And just again, like if it was part of a major strategy, then okay, then people may be willing to put up with it. Although I'm not so sure because the real reaction that we've seen currently, I mean that poll really tells the truth. They go even if prices increase, most Americans just don't wanna put up with it. I can't say I blame them. I get it. I would make a case for why it would be worth it and perhaps some ways to mitigate all of that pain. But the problem is that that's not what the White House is saying right now. And I've really become convinced that this is existential problem for all of them because without that message and without that FDR like feeling of I am doing something for you, you were just gonna end up like Joe Biden. And let's go ahead to the Atlanta Fed because this was the most important actually indicator out of them all. Let's put it up there please, on the screen, which is that their GDP model now forecast has actually been revised for the first quarter of 2025 down to minus 2.8%. So that is one where economic contraction combined with consumer sentiment plunging over tariffs and of uncertainty also combined with persistent high inflation, all three of those things, not to mention flat unemployment, which we're about to get to in a second, that is a recipe for disaster. And so as I have said here you have some Runway, America is listening. That's one of the more interesting things that you and I have seen is that the amount of interest in news left and right remains sky high right now. So it's not like people are not paying attention and they're generally willing to give you the benefit of the doubt in the first hundred days or so. But you have a very, very short period before some serious stuff is about to start hitting you politically. And the biggest danger I see for the Republicans is, let's say things just continue down this road for the first hundred days. Well, Crystal, you and I know what is the first major thing they're gonna do after the first hundred days. They're gonna pass the Republican tax bill. That tax bill, which massively increases, or the current tax cuts for large corporations and for rich people. Let's be honest here. Let's be honest. Right. They made a case for it back in 2017, and they haven't really reduced from it. So that, as I always say, the lowest day of Donald Trump's presidency in terms of approval rating was the day that that tax bill passed. Well, if you combine that with persistent high inflation, with economic contraction, with unemployment, inflation, et cetera. Well, plus the tax bill, that is a recipe really, for a George W. Bush style pushback, even after you've won the popular vote. Bush basically nuked his presidency over trying to privatize Social Security and Iraq. And I haven't even mentioned any potential crisis. It's all just floating out there right now. Hurricane season, you know, it's not that far away. Could be right around the same time as the tax bill. The optics would be a disaster if anything like that. And who. And you and I know the global system is very uncertain. Ukraine, obviously, but Gaza, I mean, that could start up any minute now. It already has escalated a bit with the Israelis cutting off aid. There could be any sort of a terrorist attack, anything, some sort of major shock to the global system. So with all of this uncertainty right now and these economic problems, people want to feel as if there's a steady hand on the wheel. I don't think that they're getting that right now. And I think that remains a big problem for Trump.
- [28:06]
Krystal Ball
Yeah, I mean, you have tariffs that are likely to spike prices. You have GDP growth dropping, potentially going negative. I mean, that is the definition of stagflation, which is the most disastrous economic situation that you can imagine. And then the GOP economic priorities are tax cuts for the rich and cutting social safety net programs. There was a new report out from the cbo, the Congressional Budget Office, that says what you and Einsager obviously already knew, which is that the amount of cuts that Republicans are pushing, there is no way to achieve them without cutting Medicaid or Medicare. And we know Medicaid has been in their sights in particular. So you got the richest man on the planet who's consolidated all this power. You've got him giving himself contracts and goodies. There's more updates on that, on how he's finding more money for and more contracts for starlink, seemingly every day at the same time that you're pursuing this agenda. That's great for rich people. That's great if you want you, if you're wealthy, if you're a big corporation, you want your tax cut. And it's terrible for ordinary people who are already suffering and who, many of whom voted in this election because they thought Trump as a businessman would do a better job managing the, managing the economy. And they remembered back to his first term and felt like they were personally doing better, especially because prices were lower at that time and their dollar was able to go further. We alluded to this. We've got another negative indicator here that's significant. This is the ADP jobs report. Could put this up on the screen. So companies added just 77,000 new workers for the last month. This is the chart showing it. That last, last little blue bar there, that's really quite low in comparison to the other blue bars on the chart. That's where we are. That's also a lot less than what January was, 186,000. And it was much below the estimate of 148,000 jobs added. So, you know, this is something Ryan's been talking about, how all of the federal government cuts, it doesn't just impact those particular people who get fired. You end up with universities freezing firing. You end up with the health care system freezing hiring. You end up with an economy that's just kind of on standstill as people wait and see what the reverberations and what the ripple effects are ultimately going to be. You add to that consumer confidence is down. I know Target came out and said that they're spending, their revenue was, you know, soft in the, the past month as well. So you've got a lot of indications that consumers are pulling back and getting really nervous. Well, and when you ask consumers what their expectations are for both job losses and for inflation, they are expecting things to turn south this, this year as well. And to be honest with you, I feel like the American people have been better at understanding, predicting, predicting the economy than many of the like, analysts who do this for a living.
- [30:56]
Sagar Enjeti
Yeah, good point. I mean, because they feel it and you can just really look around. I will say, you know, thermostatic public opinion is also a Hell of a drug. I was just looking the other day at approval for the economy. And the day that Trump took office, Republicans went from net negative to net positive in their approval of the economy. Democrats went from net positive to net negative. So there's a lot of vibes talk out there as well, if we're all being honest. Let's all be honest. I remember looking at economic data in Arizona right before the election where if people were asked, how is your state doing? They would be like, oh, plus 25%. Things are great. It's boom times here down in Arizona. They're like, how is America doing? They're like, oh, it's a disaster. And you're like, well, the moment that Trump gets elected, they're like, oh, it's just, we're booming. America's back for business again. So just saying, partisanship is also a hell of a drug. Let's put this next one up here on the screen. This is about the stock market. This is something been warning about here for quite some time from the Financial Times. The US has grown to nearly two thirds of global equity market value. But they say analysts are seeing danger in the huge bet on AI. So they say if you hold a global tracker, by definition, then two thirds of that is the United States and a lot of that is Silicon Valley specifically. That means you are very vulnerable to this huge bet on AI. Now, our economy has significantly benefited from the fact that these tech stocks have gone vertical since 2008. That's how a huge portion of Americans who do have assets who are not asset light individuals or persons inflicted with asset lightness have been able to capture some value and actually be able to retire with these great year over year gains in the S&P 500. But the real issue is that over the last five years in particular, this huge explosion of value in these technology stocks means that Americans are very exposed to any correction, Even a modest 10, 20% correction in the technology sector, which would have massive ramifications for the economy. It would mean unemployment, it would mean change to Federal Reserve. So it's not just something that would affect tech employees, it would affect all of us. There's no question about it. And really that's what they're pointing to right now with the current stock market and with all of these bigger questions too about Nvidia, which currently saw a huge reduction the other day. We didn't get a chance to talk about it, but it was really because there are indications of how much they are currently averting export controls to China. And so Actually just enforcing US law. Huge impact there on Nvidia. So you've got geopolitical tensions, you got the whole deep sea thing in terms of efficiency and then you still have these companies just pouring hundreds of billions of dollars into AI development every single quarter. Now they're doing that for a reason and we're about to get to that in a little bit. But you know, if that's, that comes up short, it could have serious problems. We could be in for a bad five years is what I would say.
- [33:58]
Krystal Ball
Well, and it doesn't even have to come up short. It just can be that, you know, Deep Seek and other open platforms are able to suck up a lot of the value as well. So it could even be that it's not that they underperform in terms of their technological development, it's just that there's far more global competition than is anticipated. I mean, I'm quite convinced that we are in a bubble. Just a question to me of whether or not that bubble is going to pop and the lengths that politicians will certainly go to to make sure that the stock market continues to churn because that's, you know, that's been a goal and a priority obviously for, for many years now. But we talk about the Magnificent seven group of stocks and you're talking about how dominant the tech sector is. That's Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla. They hold almost a third of the S&P 500's market value. And this article points out that the price to earnings ratio of that index is at its highest level since the early 2000s.
- [35:01]
Sagar Enjeti
Yep.
- [35:02]
Krystal Ball
You guys remember what happened in the early 2000s. That's when you had the dot com bubble and ultimate crash. So again they're going to keep trying to do what they can to keep the stock market inflated. But I don't, to me it's pretty undeniable that we are in a fairly significant bubble. And the fact that these handful of companies comprises such a large portion of the stock index and that that stock index comprises such a large portion of the overall market activity is another just looming massive risk and exposure as we're looking at these things. And this is a good segue too into our next segment which is specifically about AI and where we're headed with that, which is also kind of terrifying. Hi, this is Jenny Garth from I Do Part two.
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Sagar Enjeti
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Save up to 50% sitewide@blinds.com rules and restrictions may apply. Yes, Artificial General Intelligence so Ezra Klein over at the New York Times just had a really good interview with Ben Buchanan and he was a White House advisor on AI in a professor at Georgetown, and he has a prediction that AGI artificial general intelligence is coming in the Trump administration. I will say if you watched our coverage during the inauguration, I'm pretty sure we were both talking about that and we're like, listen, all of this Doge everything. It could be a footnote to what the actual story of the entire Trump administration actually is, which is the development of artificial general intelligence. Just as when people go back and write the history of the first Trump term, it'll be the Trump revolution of 2016 and Covid. Those are the two things probably the most important things actually came out of those years in retrospect. So let's take a listen here to some of Ben Buchanan's analysis on artificial general intelligence, his predictions, and also some of the major policy implications behind it. So I've sort of heard you beg off on this question a little bit by saying you're not a labor economist. I will say, though, I am not a labor economist. I will promise you the labor economists do not know what to do about AI. You were the top advisor for AI. You were at the nerve center of the government's information about what is coming. If this is half as big as you seem to think it is, it's going to be the single most disruptive thing to hit labor markets ever, given how compressed the time period in which it will arrive is. Right. It took a long time to lay down electricity. It took a long time to build railroads. I think that is basically true.
- [39:23]
C
But I want to push back a little bit.
- [39:24]
Sagar Enjeti
So I do think we are going.
- [39:25]
C
To see a dynamic in which it will hit parts of the economy first, it will hit certain firms first, but it will be an uneven distribution across society.
- [39:32]
Sagar Enjeti
I think it will be uneven. And that's, I think, what will be destabilizing about it, in part. Right. If it were just even, then you might just come up with an even policy to do something about it. Sure. You must have heard somebody think about this. You guys must have talked about this. Yeah. We did talk to economists and try.
- [39:48]
C
To texture this debate in 23 and 24. I think the trend line is even.
- [39:52]
Sagar Enjeti
Clearer now than it was then.
- [39:53]
C
I think we knew this was not going to be a 23 and 24 question. Frankly, to do anything robust about this.
- [39:58]
Sagar Enjeti
Is going to require Congress, and that was just not in the cards at all. So it was more of an intellectual exercise than it was a policy exercise. Policies begin as intellectual exercises. Yeah. This is a kind of like the way that I'm pushing on this is that we have been talking about this, seeing this coming for a while. And I will say that as I look around, I do not see a lot of useful thinking here. And I grant that we don't know the shape of it. At the very least, I would like to see some ideas on the shelf for if the disruptions are severe, what we should think about doing. Does everybody move into the trades? What were the intellectual thought exercises that all these smart people at the White House who believed this was coming. What were you saying?
- [40:35]
C
So I think, yes, we were thinking about this question. I think we knew it was not.
- [40:40]
Sagar Enjeti
Going to be a question we were going to confront in the president's term. I guess I'm trying to push, like, was this not being talked about? There were no meetings There were no. You guys didn't have Claude write up a brief of options?
- [40:52]
C
Well, you know, we definitely didn't have Claude write a brief because we had.
- [40:54]
Sagar Enjeti
To get over government use of AI. See, but that's like itself, slightly damning.
- [41:00]
C
Yeah, I mean, I think, you know.
- [41:03]
Sagar Enjeti
Ezra, I agree that the government has to be more forward leaning on basically.
- [41:06]
C
All of these dimensions.
- [41:07]
Sagar Enjeti
You sit down with somebody and you start the conversation, and they're like, the most transformative technology perhaps in human history is landing into human civilization in a two to three year timeframe, and you say, wow, that seems like a really big deal. What should we do? And then things get a little hazy right now. Maybe we just don't know. But what I've heard you kind of say a bunch of times is like, look, we have done very little to hold this technology back. Everything is voluntary. The only thing we asked was a sharing of safety data. Now in come the accelerationists. Marc Andreessen has criticized you guys extremely straightforwardly. Is this policy debate about anything. Is it just the sentiment of the rhetoric if it's so big, but nobody can quite explain what it is we need to do or talk about, except for maybe export chip control is like, are we just not thinking creatively enough? Is it just not time? So I thought that that was a very good exchange. Our producer Griffin, cut that together. Because what Ezra keeps trying to get at is he's like, so did you guys think about this at all? The answer was like, no, not really in terms of how it's all gonna come. And here's the thing. I don't think very much has changed now. There are some great people who are working in the White House, people like Sriram Krishnan or a few others, but that's one person. I mean, is this being discussed at like the very highest levels? And beyond that, it's not just up to the White House. This would be a whole of government Congress approach if we're gonna even think about rules and guidelines for the future. And I think the biggest worry right now, and this is actually fundamentally what's so crazy about AI, is that the breakthrough is most likely to come, at least in America, in a preexisting technology monopoly. So if you look at all of these other breakthrough technologies, they can come from an outside competitor. They don't necessarily come from. Everyone always famously says, kodak invented the digital camera, but, you know, they put it to the shelf because they want to disrupt themselves. These guys are all actually aware of that. And they're the ones who are pumping all the money into this tech and it's not necessarily some new value capture startup or something that would be the break. I think that probably has to do more with AI economics, but I think that's part of why I'm so worried is that if you give these people who already have immense power, even more immense power, basically control over the whole US labor market, I think that's the really terrifying part behind the development.
- [43:31]
Krystal Ball
There's a lot about this that like, gives me panic attacks listening to that. I listen to that whole podcast and it confirms my terror, which is that, you know, even the people who are at the bleeding edge of this really don't know exactly what it's going to do to society and don't really have any answers about how to address it. And I think everyone really needs to wrap their head around the fact that the social contract is going to need to be completely rewritten. And I don't think that there is. I get that it is hard to fathom what this is going to mean. It feels very like, oh, I use ChatGPT and it's fun to ask it questions, just kind of like a better Google. But what is coming is something profoundly different. And the goal is to automate, to use AGI to basically make human intellectual labor irrelevant. So what does that do to a society? What does that do to the world when human beings are no longer the most intelligent species on the planet? So, you know, the Biden administration clearly didn't have any answers for that. And I don't know that anyone. I mean, at this point there was these different factions in Silicon Valley thinking about AI development. And you have people who were like, you know, the AI safety people and people who are doomers. I'm probably kind of in the doomer camp. And the Accelerationists at this point have just completely won. And the idea is just like, we're in a race with China. We're going to throw as much money and effort into this as we possibly can. We're going to develop it as quickly as possible. Even though the problem of what they call alignment has not been solved. And alignment is like a really sort of sterilized word, antiseptic word for how do we make sure that this AI isn't just going to decide to destroy us all or have catastrophic consequences that we aren't envisioning. They haven't figured that out, but they're still pushing forward. And Sara, you're mentioning, you know, this is going to come from, likely from some big tech monopoly unless China does get to AGI first, which I think is certainly a possibility at this point. But the other thing that's different there is that the previous major technological advances, like if you think about the Internet, if you think about computers, like personal computers, if you think about nuclear energy and weapons, all of that was developed within the government. So the government also, there was some ability to have a democratic check on what purposes this would be developed for and a sort of studied approach to it. Not that that is perfect in any way, but when you just are developing it in the private capitalist markets and where the goal is just like, who can get there first and who can capture the biggest profit margin, like, the impacts are almost unfathomable. And I talk a lot about the labor market piece. The surveillance piece is also, I think, something we should all be pretty terrified about. And then the last thing I'll say before we get to the clip that specifically talks about the race with China is I think one of the things that's happening with doge, as best I can tell, is they want to use the federal government as kind of like a laboratory for how many human beings can be replaced right now by AI, even before we get to AGI. So we're getting an announcement probably today that they're working to completely dismantle the Department of Education. We've already had indications that they're using AI to go through all sorts of data. And I've seen indications like, oh, maybe they're going to cut the Social. They are cutting the Social Security Administration. Maybe those people on those hotlines are going to be replaced by AI. I do think it is sort of a test lab for how many human beings can we get rid of and replace with machines and the basic functions still more or less work. So I think that is part of what's going on here, too.
- [47:33]
Sagar Enjeti
Yeah. All right, let's go to the next part here. As you said, that specific interview question on AGI and the race. Let's take a listen. There are a lot of arguments in America about AI. The one thing that seems not to get argued over, that seems almost universally agreed upon and is the dominant, in my view, controlling priority and policy. Is it we get to AGI, a term I've heard you don't like before China does. Why?
- [48:00]
C
I do think there are profound economic and military and intelligence capabilities that would.
- [48:08]
Sagar Enjeti
Be downstream of getting to AGI or transformative AI.
- [48:12]
C
And I do think it is fundamental.
- [48:15]
Sagar Enjeti
For US national security that we continue.
- [48:18]
C
To lead AI, because we think AI could represent a fundamental shift in how.
- [48:22]
Sagar Enjeti
We conduct cyber operations on offense and defense.
- [48:24]
C
And I would not want to live in a world in which China has.
- [48:27]
Sagar Enjeti
That capability on offense and defense and.
- [48:29]
C
Cyber and the United States does not.
- [48:31]
Sagar Enjeti
They want strength and dominance and to see the next era be a Chinese era. So maybe there's nothing you can do about this, but it is pretty damn antagonistic to try to choke off the chips for the central technology of the next era to the other biggest country. I don't know that it's pretty antagonistic to say we are not going to sell you the most advanced technology in the world.
- [48:56]
C
That does not in itself.
- [48:57]
Sagar Enjeti
That's not a declaration of war. That is not even itself a declaration of a cold war.
- [49:02]
C
I think it is just saying this.
- [49:04]
Sagar Enjeti
Technology is incredibly important. Do you think that's how they understood it? Yeah, I thought it was interesting. And I don't know, to be honest, I think that Ezra question incredibly stupid. Like, what? People are just entitled all across the world to whatever product the United States produces. That's absurd. If you guys are so good that you could build it yourself, which they did. I mean, that's the other thing. It's not. One thing that we always do in America is we underestimate the Chinese. I mean, look at byd. Yeah, they were stealing our ip and there was all this, oh, well, they're stealing from us, et cetera. And then they were like, yeah, we stole it. And then we actually made it 10 times better than everything that you have in your market. They are already doing that with their chips, whether we sell them to or not. It's absurd to think that they're entitled to it. So in a way, it's almost like, like weirdly paternalistic. It's like, oh, no, it's all good. We have to sell them this brand new technology. I just think that's completely absurd. But look, the question that Ben raises, and this is one too, that's kind of like nuclear weapons, is there just is a mutually disturbed destruction Thucydides trap element to this. Like, it's nice to Pollyanna and be like, oh, maybe we can all get along. It's like, no, we're not gonna get along. Cause they don't wanna get along with us. And most Americans don't necessarily wanna get along with that. Them in terms of allowing total dominance or being subject to their economic or market control. That's something that we all are pretty wedded to, at least on a consumer level here in America. And if you look at Sputnik or any of these other moments, it's pretty much borne out in the population data. So I don't know. I have some mixed feelings on that one.
- [50:34]
Krystal Ball
Yeah, I was looking at. There's this Australian technology index that looks at which countries are most advanced across a number of different technologies. Calls the Australian Strategic Policy Institute's Critical Technology Tracker. And we went from being number one in basically everything to now China, according to this index, leads in 37 out of 44 evaluated technologies, including things like defense, space, robotics, energy, biotech, AI, advanced materials, and quantum technology. I don't know if you saw this diagram. This is a different sort of quote, unquote, technology. But McDonald's is no longer the largest fast food chain in the world. A Chinese brand that just went public in Hong Kong actually has the. I think it's called like, Mixie or something like that.
- [51:21]
Sagar Enjeti
Mixie.
- [51:21]
Krystal Ball
I think it's called Mixie. I might be. That might be wrong. But anyway, now has more locations than McDonald's, and not a single one is in Europe or the United states of America. 90% of them sell just within China themselves. So I, I think it's. I mean, it's, it's the chain. I know they sell ice cream and drinks. Is that what it is? I mean. And this is. Arnaud had a tweet about this Arno Bertrand, which is like, listen, this is gonna be new for those of us in the west to have these brands that are like the largest brands. And the new big thing that we don't have any idea, we've never heard of, they don't exist here. We don't know what they are. And so your point about, you know, being arrogant with regard to where China is and how far along they are in their development. I think people need to wrap their heads around the fact that actually in many technologies, they have surpassed us at this point. And there is no reason to think there's any guarantee that we're going to, quote, unquote, win the AI arms race, because, you know, they're, they are quite, quite advanced and they are right there along with us. And the innovations with regard to Deep Seek, you know, really pushed the, the boundaries in terms of efficiency and, you know, requires much less power usage than the models that were developed here. So, yeah, that's. It's a very real dynamic. But that McDonald's thing kind of blew my mind.
- [52:47]
Sagar Enjeti
Absolutely. That's a good point.
- [52:48]
Krystal Ball
Sort of like a Sputnik moment in a weird way.
- [52:50]
Sagar Enjeti
Yeah, it's a good point. I'm not sure I would care so much about the largest place being bubble tea, but I'll try it. I'd be happy to try it. Apparently it's all over Asia. I would love to go. Not usually a bubble tea guy, but they have soft serve, so that sounds pretty good. But yes, no, you're absolutely right. And this is part of the chauvinism in the United States. I've recently started been looking back at the Soviet atomic bomb industry or the Soviet atomic bomb program. Absolutely fascinating time. Everybody can tell you the story of the Manhattan Project. I watched Oppenheimer, et cetera, but nobody really thinks about that four year period where the, the Soviets went from not having an atomic bomb to be able to compete. And actually the hydrogen development which sparked the arms race. And I think what was so fascinating about that time period of the early Soviet Union was a chauvinism here in the United States of, you know, even in the early days of the Cold War where they're like, we've got it, we don't really have to do all that much. And there's no way that these backwards Soviets could be able to compete. And that's where Sputnik came in. Deep Seek obviously is a version of that. But part of the other issue is culturally right now is we don't appreciate the ability of alternative systems to deliver extraordinary results. We had a foolish notion here in the west that by cutting Russia off from the international banking system they would collapse. What we forgot is that countries are not stock markets. They are places that have natural resources and the ability to produce guns, bullets and pull oil out of the ground is actually all that really matters whenever you're in a time of war. Same with the Chinese. I mean they have all of these minerals and factories, industries and supply chains that are totally vertically integrated that have enabled these incredible breakthroughs in their car industry, in their battery technology, and now with AI I have no doubt then in the next 10 years they'll be on parody with us on the chips as well. And we have to grapple with that.
- [54:41]
Krystal Ball
Yeah, that's right.
- [54:42]
Sagar Enjeti
This is something that all Americans. I'm watching the Europeans do this right now. They're having huge debates. I saw a headline in the Financial Times, like Europeans, we must slash our welfare states to compete on defense. And I was like, man, that'd be a bitter pill to swallow if I was a Frenchman or if I was a German. And I've been used to a life of 75 years of universal healthcare. So I'm curious to see how that works out for them. But that's my point. Too is that everything is a trade off. And to just sit here and think that we are just naturally willing inherit the earth is ludicrous. And you will find out very, very quickly. I encourage. That's why I talk about those Chinese EVs all the time. I don't think people know. And you can just go on YouTube, you can go watch it for yourself. It's crazy. You would buy one too. If we're all being honest, every one of us would buy one if we're talking about the price. And so think about it and just say like, how do you get there? Well, it's not that easy. You need a government, you need a plan, you need supply chain. You know, you need your Elon and you need the government to like come together like this. Otherwise you're gonna get left in the dust.
- [55:49]
Krystal Ball
Well, and China's got Elon too.
- [55:51]
Sagar Enjeti
Yeah, that's true. Good point.
- [55:53]
Krystal Ball
They can have a muscle.
- [55:54]
Sagar Enjeti
Their Elon Musk, BYD guy. That guy is crazy. He is. Like I said, Charlie Munger said he was the smartest guy that he's ever met in his entire life, which I think is extraordinary.
- [56:02]
Krystal Ball
Well, and last thing on this, part of the hubris is assuming that our version of capitalism is the one that is going to create the most innovation. You know, we just assume that that's the case. And part of what has happened that, you know, is something that Matt Stoller certainly shines a light on is since we allowed these giant tech monopolies to grow, oftentimes they focus more on, you know, financial tricks and gains than innovation. They have few competitors because. Because they're giant monopolies. And so it certainly has not been the best way to encourage innovation and keep us at the leading edge. China obviously has a very different economic system and, you know, parts of it are effectively socialist. And that has the way that they've been able to marshal state resources in critical industries and, you know, create supply chains and actually, yes, efficiencies that have enabled this technological development and have also made some intentional decisions to keep their society from going down the path of just everything being financialization and all of their top graduates going into the equivalent of Wall Street. That's also a significant part of the story as well and part of the hubris because after we won the Cold War versus the Soviets, we're like, all right, our system's the best. This kind of capitalism is amazing. It's going to win forever. And here comes another economic model that is, you know, rivaling or in a lot of ways out innovating and out competing us. I don't think a lot of people here have wrapped their heads around that or want to wrap their heads around what that means.
- [57:40]
Sagar Enjeti
Yep, you're right. Turns out just eating McDonald's all day, watching OnlyFans or Netflix or all that doesn't produce the best scientists. Shocking. Absolutely shocking.
- [57:51]
Krystal Ball
This is Ashley Kineti from the Ben and Ashley I Almost Famous podcast.
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Sagar Enjeti
You probably know somebody who's on Ozempic or Semaglutide right now.
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Krystal Ball
Now these are really popular medications that.
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If it seems like all other options.
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Krystal Ball
Results may vary.
- [58:20]
Sagar Enjeti
Sponsored by Future Health Stop hitting snooze on new tech Upgrade the whole team@lenovo.com Unlock AI experiences with the ThinkPad X1 Carbon powered by Intel Core Ultra processors so you can work, create and boost productivity all on one device. Win the tech search for business PCs@lenovo.com Lenovo Lenovo at AMECA Insurance we know it's more than just a car. It's the two door coupe that was there for your first drive, the hatchback that took you cross country and back, and the minivan that tackles the weekly carpool for the cars you couldn't live without. Trust Amica Auto Insurance Ameca Empathy is our best policy. All right, let's get over to Gaza.
- [59:25]
Krystal Ball
Yeah, so we have some significant developments here. Let me go with the latest one first. So Trump put this message up on. I guess this was Truth Social to begin with. Let's put this up on the screen. So he writes, shalom. Hamas means hello and goodbye. You can choose release all of the hostages now, not later, and immediately return all of the dead bodies of the people you murdered or it is over for you. Only sick and twisted people keep bodies and you are sick and twisted. Unmentioned is the fact that Israel is holding hundreds of bodies. But we'll put that aside. I am sending Israel everything it needs to finish the job. Not a single Hamas member will be safe if you don't do as I say. I have just met with your former hostages whose lives you have destroyed. This is your last warning for the leadership. Now is the time to leave Gaza while you still have a chance. Also, to the people of Gaza, a beautiful future awaits. But not if you hold Hostages. If you do, you are dead. Make a smart decision. Release the hostages now or there will be hell to pay later. Donald J. Trump, President of the United States of America. Now, this comes at the same time as let's put this next piece up on the screen. The Trump administration is actually meeting directly with Hamas. Now to me, when you are engaged in negotiations, it is a no brainer that you want to engage in those negotiations directly with the people who you are negotiating with. But this is not the way things are normally thought of in Washington D.C. and of course, if the Biden administration had negotiated directly with Hamas, of course there would have been like massive freakouts all across the right, etc. About negotiating with terrorists. But the presidential envoy for hostage affairs, Adam Bowler, actually has been communicating directly with, with Hamas. And so, you know, that to me is the fact that you even have talks occurring in that way is certainly an encouraging sign. But then countervailing forces, you have that very belligerent Trump message on True Social and you have the fact that he seems still committed to his insane mass, you know, complete ethnic cleansing plan in the Gaza Strip. And it all amounts to a, like, I don't really know where things are and what is going to happen next. Also, last thing before I get your reaction, Sagar, to keep in mind as we covered on Monday that Israel has completely backed away from the ceasefire deal. You know, Bibi had always told his domestic fanatic partners that they were only going to do phase one and then they were going to go back to the war. Now what they're doing is they're reinstituting the complete siege, including considering cutting off water to the Gaza Strip as well. So, you know, the situation is quite dire at this point.
- [62:06]
Sagar Enjeti
Yeah, it is. The signals are everywhere. So on the one hand, talking with Hamas is great. That's what we should be doing from day one. And of course all these idiots in America, oh, we don't negotiate with terrorists or whatever. I'm like, well, Israel's tried to kill him for two years and they're still standing. So what do you want to do? You know? And their answer is actually simple. They're like, oh, just kill them all. And you're like, okay, well that didn't work. Or at very least I don't want any part of that. So this is the alternative option. How do you think you got out of Afghanistan? You do what Trump did. You sign a deal that says we are negotiating with the Taliban. It was an absurd, this idea that the United States is not gonna negotiate with The Taliban over a 20 year occupation of that country and an insurgency with the same problem here. So let's just put that on the table. I do also this is the problem with Trump. I've been thinking about this. He already gave that ultimatum previously and nothing happened. He said they have to release all the hostages. They didn't.
- [62:59]
Krystal Ball
Or they'll be held to pay.
- [63:00]
Sagar Enjeti
Was or they'll be held to pay. Literally not a single thing happened. My guess is that this is part of trying to pressure the negotiations and the direct US talks right now with Hamas. But in terms of the credibility that they will be received, that's a bit of an issue. I would also say at the very end there he said, people of Gaza, release the hostages or you're all die. I'm like, okay, so America's gonna do it now. We're not even gonna let the Israelis do it. I mean that's pretty insane. I think Jeremy Scahill has a official response now from Hamas that just came out. Yep, here we go. Just in the last hour. I can read it here. In response to Trump's statement directed at Hamas. Only sick and twisted people keep bodies. On February 23, the Palestinian National Campaign for the Recovery of Martyrs Bodies announced that they're going through the bodies thing. They say according to the bodies, they're among retained. They're talking what you said about Israeli bodies. And finally they say the campaign note of these figures do not include bodies held in the Gaza Strip since the onset of aggression. However, Israeli sources have revealed the occupation is holding over 1500 martyr bodies at the. What that Saad Tayat. I forget exactly how to say it. Where the rape occurred in occupied southern Palestine. So you can see that they are hitting back on the body's claims, but they are not actually talking specifically about this claim over hell to pay. So there is an open question. I will also say it's funny that this is such a subversion of the Israeli strategy because. Because Israel's previous strategy was to kill all of the people who were reasonable ish inside of Hamas so that there was nobody to negotiate with. And yet even still, as we can see here correctly at this time, there's still no bombing yet and perhaps there is some path to some sort of phase two deal. This is how we would actually get there if it were to ever exist. Is the United States is the big brother, just as in Ukraine. Yes, you have to talk to Putin. Sorry people, that's how it works. Same here in Hamas. No, they don't have a nuke, but they exist and they have at least some number of fighters in the Gaza Strip who are still able to mount a resistance. They have some support there, nobody really knows how much, but yeah, you have to talk to them. So this is the duality, I guess, of Trump and the two directions where he's torn. His Israeli supporters want him to just blow em all away and basically bomb and give. That's the other thing. I will give Israel everything they've already been given. What are they asking for? They're not getting. Is there any evidence? I have not seen one. And you and I both know if there's a weapon system they wanted that they weren't getting, they would leak it. They would have leaked it, you know, last week. Oh yeah, I can't think of a single thing that they're getting that they don't have other than a nuke, which they also have. So it's like, well, what do you want?
- [65:35]
Krystal Ball
Yeah, and they just rushed through a quote unquote emergency, you know, war, billions of dollars of weapons to Israel. So yeah, we all know Israel's getting everything they want, don't worry. And not a question. Remember there was like one shipment of 2,000 pound bombs that got held up and you know, they were up at arms over it. How dare you withhold this one shipment that made no difference in terms of their ability to completely decimate the Gaza Strip. You know the other thing that was not encouraging as we could put the next piece up on the screen, is that a bunch of Arab nations came together and put together, you know, pretty reasonable plan for next steps in terms of Gaza. And Trump and Netanyahu immediately rejected it. Like, you know, this was a considered plan, multiple nations involved, you know, significant planning goes into this and then it's just sort of rejected out of hand. They said this in Haaretz. They said it's the result of a months long diplomatic effort to create an off ramp that would end the war and let reconstruction begin. The plan contains hundreds of pages and appendices, yet the Trump administration seemed to have killed it with the a single paragraph. That paragraph was quote, the current proposal does not address the reality that Gaza is currently uninhabitable and residents cannot humanely live in a territory covered in debris and unexploded ordinance. Of course that's consistent with Trump's plan of like, oh, we gotta ethnically cleanse all of these people out of the Gaza Strip. And by the way, they're never allowed to return. That was, this was a spokesman for the National Security Council. Adding that President Trump, Trump remains committed to his plan to forcibly evacuate the entire population of Gaza and claim the territory for the US Netanyahu rejected without even putting out a little paragraph saying why. So this is the other piece is like, if that idea is a negotiating tactic, then okay, well, the Arab nations got together, they came up with the counter proposal, so let's negotiate. But the fact that they immediately stopped so hard to his just like both evil and absurd and preposterous notion of the US Is going to take over the Gaza Strip and push out every Palestinian and not allow them to return, that is obviously deeply troubling. And listen, maybe they'll come back. The Arab nation said, okay, well, we don't consider that to be final answer. So we're gonna keep working on it. We'll see where it ultimately goes. But not my biggest sign.
- [68:01]
Sagar Enjeti
My biggest signal was he didn't mention it at all as state of the unit. He made one thing about the, he made one mention of the hostages. There was not nothing about ceasefire, about the Gaza plan. Even though I do think he is serious, he did not mention it there. I don't know. I have no idea what to say. I just hope Steve Witkoff just keeps sending him there. He's got a good track record. Keep talking to Hamas. Let's get to some sort of phase two. Whatever this Gaza moronic idea is. I don't even know about that. But in the interim, you know, it's still better, at least for now. But if Trump does start to provide not only just weapons to Israel, that's par for the course. If he starts to directly intervene from the US military, I think you would see a titanic pushback here in the United States. I genuinely don't think a lot of people would stand for that about a direct military and a bombing campaign. In fact, it would be a nightmare for Israel and for a lot of their supporters because people would start asking all kinds of questions whenever it's actually US Military weapons, jets and others that are directly being used inside of the Gaza Strip. So we'll see. Maybe they will catch their own tail because that will create a serious pushback, I think from the United or both. Also in terms of backlash against the United States, very, very troubling situation.
- [69:22]
Krystal Ball
This is Ashley Kineti from the Ben and Ashley I Almost Famous podcast.
- [69:26]
Sagar Enjeti
It feels like everyone is talking about GLP1s these days. Those are Ozempic and Semaglutide.
- [69:32]
Krystal Ball
And with Future Health, you can find.
- [69:34]
Sagar Enjeti
Out if they're right for you too. Maybe you feel like you've been struggling with your weight for years and no matter how much you diet and exercise, you just don't feel healthy. Just go to try FH.com to find out if weight loss meds are right for you.
- [69:47]
Krystal Ball
Try fh.com future health is not healthcare.
- [69:50]
Sagar Enjeti
Services provider Meds are prescribed at provider's discretion. Results my very Sponsored by Future Health Stop hitting snooze on new tech. Upgrade the whole team@lenovo.com Unlock AI experiences with the ThinkPad X1 Carbon powered by Intel Core Ultra processors so you can work, create and boost productivity all on one device. Win the tech search for business PCs@lenovo.com Lenovo the Novo @ Ameca Insurance, we know it's more than just a car. It's the two door coupe that was there for your first drive, the hatchback that took you cross country and back, and the minivan that tackles the weekly carpool for the cars you couldn't live without. Trust Ameca Auto Insurance. Ameca empathy is our best policy. All right, let's get over to the Tate brothers. And so let me just say at the top, I have not had the time to explicitly parse every statement by Andrew Tate, every one of his human trafficking claims or all of that. I do know that he has definitely advocated some stuff that I definitely am against, of which I guess the Romanian authorities found and bear investigation. But the funniest thing that I have seen now so far is this civil war happening right now over Andrew Tate's basically, what, fleeing, vacationing, according to him, back to the United States. And a split overall in the conservative movement where, where many people, we had Ali Betstucky on the show, for example, to be like, actually no, Andrew Trade is not really a male model at all for anybody who is conservative or wants to see like family life or, you know, there's. So I could go down the list in terms of so many of the different things that the guy has said. But the split now has opened up a fight legally here in America, where the attorney general of the state of Florida said he is going to pursue an investigation of Andrew Tate, specifically around the human trafficking allegations. Let's take a listen. Yeah, look, these guys have themselves publicly admitted to participating in what very much appears to be soliciting, trafficking, preying upon women around the world. Many of these victims coming forward, some of them minors, you know, people can spin or defend however they want, but in Florida, this type of behavior is viewed as a trial atrocious. We're not going to accept it they chose to come here and set their feet down in this state, and we're going to pursue every tool we have within our legal authority to hold them accountable. So we. We are in the process today. We have secured and executed subpoenas and warrants, and we're going to continue to move forward with full force of law. This is an ongoing criminal investigation, and we're going to use every tool we have to ensure that justice is served. You've opened a criminal investigation?
- [72:54]
Krystal Ball
Investigation.
- [72:55]
Sagar Enjeti
There is an active criminal investigation, yes. Do you believe that there are any details of what? I can't comment on a pending investigation, but what I can tell you is if these guys did criminal activity here in Florida, we will go after them with the full force of law and hold them accountable. So the Florida Attorney General saying there was an active criminal investigation. Andrew Tate then responded. Let's put this up there on the screen. He put out his Tweet saying, Ron DeSantis is attacking me because he was worried I would support Byron Donalds over his wife, knowing I have monumental political weight and trust our Commander in Chief, President Trump's recommendations completely. They attacked me to prevent me from destroying his wife's political ambitions. Interestingly, I had no interest in Florida politics until I learned how communist the DeSantis administration is. Game on. Well, it might surprise everyone to learn that actually, even Byron Donald's not really playing ball with all this. So, guys, can we go ahead and play E3, please? Let's take a listen. Andrew Tate and his brother Tristan, because in Romania, where they just came to.
- [74:03]
Krystal Ball
Florida from, there were charges of rape.
- [74:05]
Sagar Enjeti
Sex with minor and human trafficking. Do you support the Attorney General's actions here? I do. I think those allegations have to be fully investigated, and then we go from there. The key thing is we don't tolerate the trafficking of women or, frankly, the abuse of women. We do not tolerate that. So if the Attorney General finds cause under Florida law to investigate that, then I wish him the best and I support whatever he's going to do on that matter.
- [74:31]
Krystal Ball
Are Andrew and Tristan Tate welcome in Florida?
- [74:33]
Sagar Enjeti
No, quite frankly not. Because if you listen to some of the dialogue, I find it to be demeaning and disgusting. It's not about being. That's not about being an alpha male. It's not about being a strong man. What they stand for, in my view, is something totally different. All right, so Byron is actually backing up the Attorney General here. So bit of a plot twist. And Andrew is now saying, Andrew Tate says, let's see, E4. Can we put that on the screen, please. He is now claiming that his flight to the United States is. That his flight to the United States was just a vacation. It's a strange feeling to be so adored that when you go on a two week holiday to Miami, the entire world talks about it. It. It's wild. I'm going back to Romania in a few days anyways, so there we go. Crystal, before I play the crazy. Andrew Tate's reaction, but I wanted to get yours first.
- [75:19]
Krystal Ball
Back to Romania is a surprise. I guess he feels like, yeah, he's under investigation there.
- [75:24]
Sagar Enjeti
I wouldn't want to go back to Romania.
- [75:26]
Krystal Ball
I mean, maybe he feels like, because, I mean, it looked very much like the Trump administration intervened directly with the Romanian government. So maybe he feels like he's got more protection in Romania, this point courtesy of Trump and Rick Cornell in particular, than he does, clearly in the state of Florida. I mean, I don't know if you guys have seen the videos floating around, both of things that he has said, which, you know, if, if true, if acted upon, certainly would constitute criminal behavior or some of the alleged videos that are floating out there of actual abuse. I mean, it truly is horrifying. So for a party that has any semblance of caring about family values, you can understand why there's some contingent that's like, like, you know, maybe this guy really isn't the role model that we want to embrace here. And it is utterly disgusting that the Trump administration intervened on behalf of this dude. Like, whatever you think of him, that they spent their diplomatic resources getting this guy free is, I think, just absolutely disgraceful. You know, with regard to the politics of it, it is kind of interesting because I'm curious how you read it, Sagar, but to me, it reads like, like Ron DeSantis, first of all, I'm sure bitter about the presidential campaign and blah, blah, blah. And he wants his wife to get the Senate seat and Senate seat, right? Or governor. Which one is it?
- [76:40]
Sagar Enjeti
Governor. Governor.
- [76:41]
Krystal Ball
Governor, yeah, after he goes. And so there's that piece. But also, I think he's positioning himself for a theoretical post Trump gop, where in theory at least, this is the last time Trump can run for president. And I think DeSantis, perhaps foolishly, is calculating that maybe after this term there will be a desire for someone who showed a little bit of independence from Trump, had a little bit of principle on something somewhere that they can point to that was distinct from just being part of the Trump band of sycophants. But I'm not really sure that he's right about that. But I do think that that's kind of the calculus that he's engaging in here.
- [77:25]
Sagar Enjeti
It could be. But then I don't know why Byron Donald, who is like as MAGA and as Trump as it gets, would back him up. Because. And that's actually the other thing too.
- [77:33]
Krystal Ball
I think that's political calculus. I mean, because most people are gonna look at this dude and be like, yeah, this is abhorrent. So if he wants to run, if he's running in the state, which he is, I just read that as feeling some political pressure to take a stance against something that would be wildly unpopular.
- [77:49]
Sagar Enjeti
I think it's possible. I will tell you, that whole Trump thing is not confirmed 100%. It was according to the Financial Times. They claim Rick Grenell Grinnell denies it. So that's the only, like, thing that's come back to. Don't forget, I mean, he is an American citizen. He's a dual Romanian American national, has full entry rights to the United States. He can come and go as he please. Not a defense. I'm just saying he's got the U.S. passport, okay? So like he doesn't have to, he doesn't have to apply or whatever to be released. It is of course noting that he was barred from leaving the country for almost two years while that continues. Like I said, you could spend 90 hours going back and forth as you said about there's things on video, there's things he said claims never did them. There are people who have anonymously sued him. There are multiple people, I think, in the UK where they want and seek his extradition. I know there is an American unidentified woman who claims to have been a victim of the so called human trafficking network, et cetera. You could even put all that criminal stuff aside and actually just focus purely on all this demonization of family life, marriage. You know, so many of the views that he has espoused in the past. Look, I think he has the right to say them, but, you know, I don't think necessarily is a good thing or whatever to be celebrated. And that's part of the reason why I find it pretty annoying. It's also pretty. I had this discussion with Andrew Schultz. It's like as much as this guy shits all over America and he's like pushing his like weird quasi Sharia slash, it's like Islamic hedonism, whatever his brand is now, currently, it's like, oh, you've come back to bid big bad America whenever it suits you. Now doesn't it as much shit have you talked now over the years. So even pinning down this guy's personal views or whatever is pretty difficult. I find it all pretty abhorrent and gross. I understand why. If you're a 14 year old dude online. Yeah, I get it. Why it might resonate a little bit with you. But overall, politically, this from the desantis administration, I haven't seen much organic pushback against it. I could be wrong, but I do think that the dam has broken a little bit, at least on the conservative commentary and all of that that are backing up DeSantis. And I don't see some grand army that's gonna be going against Byron Donald and or Ron DeSantis for either accepting or pursuing this investigation against the Tate brothers. It is a fascinating saga, though, in and of itself.
- [80:22]
Krystal Ball
Yeah, well, and he was on with Candace Owens and, you know, explaining his, you know, his position and very upset and whatever. Let's take a listen to a little bit of that.
- [80:33]
Sagar Enjeti
Arrest me perp walk me, put me on the news, tell everyone I'm a human trafficker. You think I'm not versed? You think I'm not ready? I'm a Navy SEAL in this. Come get me, raid my house, take my stuff. You think I sleep with a full phone full of evidence? You think I don't wipe my phone every night? You think I'm dumb? Come get me, arrest me, let's do this all over again. Why is he wiping his phone every day?
- [80:53]
Krystal Ball
I was gonna say, actually, you think you're kind of dumb, because if you're like, I don't sleep with a phone full of evidence. I wipe it every night. It's like, okay, well, what evidence was on there that you're trying to hide?
- [81:04]
Sagar Enjeti
So that's a little weird.
- [81:06]
Krystal Ball
Not really the kind of thing that people who are innocent of these said allegations typically do. But there you go.
- [81:13]
Sagar Enjeti
Innocent till proven guilty. Yeah, I mean, their tell to me was, oh, I'm going back to Romania. Cause I'm like, okay, well, then you're a lot more. And by the way, you should be more afraid in Romania. Look, I'm only assuming, no offense, Romania, but it seems like a place where you could probably buy your way out of some trouble. You're here in the United States of America. You're gonna need a few billion dollars to buy yourself out of trouble, not a few hundred million or whatever from your multi level marketing scheme. So, anyway, it's fascinating, fascinating story. We'll continue to keep everybody updated. Already sure that this will go extremely viral. Just in terms of all this coverage of this fascination over the Tate brothers, I do recommend everybody go watch our Ali bettstucky interview about Andrew Tate, maybe from a year or two ago. I thought she did an excellent job on that.
- [82:03]
Krystal Ball
Yeah. And she really was kind of a leader on it because at that point I think it was much harder for someone who's conservative to come out and say the things and be critical of him in the way that she was. So she was, you know, principled on that. And then the last thing I'll say in terms of just like investigations and charges, just keep in mind that if it was state charges that were filed against him, like, Trump can't pardon him for the. So, you know, I think that would be another part of the calculus of like, yo, I was just here on vacation. I'm just like, I'm leaving now, headed back to Romania. See you guys later. Was never really planning on staying. But yeah, some interesting pseudo divides in the MAGA coalition that remind me also of some of the discussion which we also talked to Ali Bestecky about, about Elon and Ashley St. Clair and the, you know, the whole whole baby mama drama situation there with him too.
- [82:54]
Sagar Enjeti
Yep, absolutely. So, Crystal, what are you taking a look at? This is Jenny Garth from I do part two. Everyone's talking about GLP1s like Ozempic semaglutide.
- [83:05]
Krystal Ball
With Future Health, you can find out if they're right for you too. Just go to tryfh.com that's trifh.com and.
- [83:13]
Sagar Enjeti
Find out if weight loss meds are right for you in just three minutes.
- [83:17]
Krystal Ball
Try fh.com futurehealth is not a healthcare services provider. Meds are prescribed at providers discretion. Results may vary.
- [83:26]
Sagar Enjeti
Sponsored by futurehealth. Stop hitting snooze on new tech. Upgrade the whole team@lenovo.com Unlock AI experiences with the ThinkPad X1 carbon powered by Intel Core Ultra processors so you can work, create and boost productivity all on one device. Win the tech search for business PCs@lenovo.com At Ameca Insurance, we know it's more than just a house. It's your home. The place that's filled with memories. The early days of figuring it out to the later years of still figuring it out for the place you've put down roots. Trust Amica Home Insurance. Ameca Empathy is our best policy.
- [84:29]
Krystal Ball
Well, we've just received some new troubling economic News. According to ADP, private employers added just 77,000 jobs last month. Month that is far fewer than the 148,000 that they expected. Now, this adds one more sign that the economy is teetering on the brink of a crash. But the Trump administration, they've got a solution. They're implementing a plan to cook the books and make it look like things are going better than they actually are. So it all started, as most things do in Trump 2.0, with Elon, who offered some significant cope on Twitter in response to a new projection from the Atlanta Fed that GDP was set to fall off a cliff. Cliff. So Elon tweeted this. A more accurate measure of GDP would exclude government spending. Otherwise, you can scale GDP artificially high by spending money on things that don't make people's lives better. For example, you could shift everyone who is building cars to working at the dmv. That would result in no cars and a much worse standard of living. But GDP would appear to be the same. So, as is often the case, his post was hit with a community note as users responded. Hey, we actually already have that metric that you're looking for. It's called value added by private industries. What's more, that metric has continued to rise as a percent of overall gdp, even under supposed big government Democrats like Obama and Biden. But since Elon is our unelected CEO dictator king, his random Twitter musings are now rapidly becoming government policy. Days later, Commerce Secretary Howard Lutnick took to Fox News to announce he was looking at changing how GDP is calculated in line with exactly what Elon just said. Take a listen.
- [86:09]
Sagar Enjeti
How worried should we be about an economy that is slowing? In all of this, we saw the GDP last week. There are new worries that the Wall Street Journal wrote about worries mounting that the Trump agenda testing economy's resilience.
- [86:22]
Krystal Ball
The Lindsey Group out with a report.
- [86:24]
Sagar Enjeti
Can Doge induce a recession? Are any of these moves worrying you that we're actually going to see it cut into growth over the near term negatively? No.
- [86:36]
Krystal Ball
No, no. So let's. You know, the Commerce Department runs the statistics of gdp. You know, the governments historically have messed with gdp. They count government spending as part of gdp. So I'm going to separate those two and make it transparent that lower government spending, it's one thing. It goes like this.
- [86:54]
Sagar Enjeti
If the government buys a tank, that's GDP.
- [86:57]
Krystal Ball
But paying 1,000 people to think about buying a tank bank is not gdp. That is wasted inefficiency, wasted money. And cutting that while it shows in gdp.
- [87:10]
Sagar Enjeti
We're going to get rid of that. We're going to show you how that is.
- [87:13]
Krystal Ball
So Let me just decode that for you. Since Republicans led by Elon are in the middle of destroying the government, mass firing workers, and attacking Medicaid, they don't really want the numbers to accurately reflect the way that their austerity for you, socialism for the rich agenda is actually really bad for the entire economy. So instead they're just going to hide it. But that's not all. The Trump administration just announced they're completely disbanding two different committees that both assist in producing accurate economic statistics. According to the Wall Street Journal, one of the committees was particularly important for tracking inflation. Employment, economic growth. Seems pretty important to know about those things. So GDP is being quote, messed with and committees that help to keep statistics accurate are being eliminated. They're asking you to not believe your lying bank accounts. Now, Lutnick and Elon's alliance is actually an important one to watch. It's kind of interesting. This isn't the first time they've been hand in glove with their ideological agenda, which mainly centers around austerity for you and billions for them and for their rich buddies. You might recall Elon backed Lutnick for Treasury Secretary, which is generally considered a more powerful position than Commerce Secretary. He tweeted at the time that Lutnick would, quote, actually enact change over the quote. Business as usual, Scott Bess. Now, Lutnick also famously introduced Elon at that infamous Madison Square Garden rally, asking him how much he would rip out of Biden's wasted budget. Let's take a listen for the greatest.
- [88:42]
Sagar Enjeti
Capitalist in the history of the United States of America, Elon Musk. All right, I've only got one question for you, then I'm getting out of here because this is your stage. But we set up Doge. Yes. How much do you think we can rip out of this wasted $6.5 trillion Harris Biden budget? Well, I think we can do at least. Two trillion. Yeah. Yes, two trillion. I mean, at the end of the day, you're being taxed. You're being taxed. All government spending is taxation. So whether it's it's direct taxation or all government spending, it's either becomes inflation or it's direct taxation. Your money is being wasted, and the Department of Government Efficiency is going to fix that.
- [89:37]
Krystal Ball
So I suspect Elon sees Lutnick as a pretty useful ally in advancing Elon's agenda. And that's, of course, to gut and defenestrate the government so it can't check the power of his own company. And also, of course, to loot the treasury so he can become a trillionaire and make it to Mars. Two goals he must have realized were really pretty impossible without hijacking the whole of the US federal government. This new scheme to cook the books on GDP also aligns with Elon's anarcho capitalist ideology which views all government activity as quote, non productive. Except of course for that government activity which flows into the pockets of Elon himself personally and helps to finance and further his own ambitions. Now changing GDP to ignore government inputs both backs up his tech feudalist ideology of mass privatization and also is going to help cover up the damage that Doge is causing in real time. Now listen, GDP is far from a perfect metric. It certainly shouldn't be used to judge general well being if that's the only thing you're looking at. In fact, assuming GDP growth is the end all be all was one of the core failures of the neoliberal era. Who cares after all if GDP grows if all the gains are ultimately flowing to the top? But as with most everything in the Trump administration, the proposal here would take something that is already bad and make it much worse. Do we really believe that government spending and investment is meaningless and contributes nothing to the economy? We're talking about infrastructure, research, electricity generation, public schools, all meant to be ignored as drivers of real productive economic activity. It's insanity. It's stupidity. It also creates absurd situations like a private for hire fire department being hounded towards GDP and the traditional government backed variety not or private school teachers counting, but not public school teachers. This new selective metric would do more to confuse and hide than to illuminate. But of course that is exactly the point here. Now the economy is turning sour fast. Not that it was really amazing before. Again the theme of taking something bad, making it even worse. Worse. But consumer spending has dropped by the largest amount in years, consumer confidence falling off a cliff. The housing market is truly paralyzed, the stock market, it's all over the place. Job creation is plummeting and contrary to what Elon and Lutnick want you to think, gutting government, firing workers, slashing social safety net programs. That is going to be really bad for the economy overall and specifically for regular people and their experience of the economy. In fact, the oligarch agenda that has been rapidly implemented is deeply destructive to the non GDP metrics that actually really do matter for people's lives. The Wall Street Journal recently reported A record breaking amount of our economic activity now is just from rich people spending money, since increasingly they're the only ones who actually have money to spend. The top 10% of all earners make up now half of all spending. Just three decades ago, back when I was a teenager, they only made up a third third of all spending. That represents an extraordinary concentration of wealth and power among the few. A realignment of resources, a collapse of prosperity for ordinary people at a record breaking pace. Now the response this new Gilded Age by the Trump Admin is a cartoonishly pro oligarch agenda. They'll hike prices through tariffs, massively regressive impact there, gut the agencies that curb the scams that benefit the rich, destroy the threadbare programs that working class and poor Americans rely upon, and implement a $4 trillion tax cut debt that goes straight to the rich, all while opening new foreign opportunities for American billionaire plunder. So how successful do I think these efforts to cover up economic reality will ultimately be? How will their cooking of the books go? Since people have their own personal experience of the economy, I kind of doubt that it's going to be all that successful. You can ask Soviet Russia how these sorts of projects typically go. Or you could ask the Democrats who wanted to deny the reality that for ordinary people the Biden economy was far from great.
- [93:30]
Sagar Enjeti
Great.
- [93:31]
Krystal Ball
The fakery will be unable to fully mask economic reality. But I will say Elon and Trump, they are both masters at concocting alternative realities with far greater talent at it than people like Biden and Schumer. They have hardcore cult followings who've proven willing to suspend reality in order to believe the pronouncements of their dear leaders. These manipulate economic statistics will be one weapon of gaslighting to feed their fabricated fantasy land and further their postmodernist project where facts and truth are discarded in favor of vibes and narratives. How successful this elaborate gaslighting is going to be? Well, that depends on how undeniable the fact of economic pain becomes. All right, guys, we've got Zoran Mandami for us next. Let's take a listen. So you've really got a pretty interesting race shaping up for New York City mayor. You've got the scandal plagued Eric Adams, who still is refusing to resign at this point. Andrew Cuomo has chosen, just entered the race, also sort of scandal plagued, but kind of a political juggernaut as well. And leading the pack of the more progressive candidates right now is a really interesting upstart Democratic socialist candidate. He's an assembly member named Zora Zoran Mandami. Let's take a look at a little bit of his campaign ad.
- [94:53]
Sagar Enjeti
New York Mayor Eric Adams has been indicted by A federal grant.
- [94:57]
C
Every politician says New York is the.
- [94:59]
Sagar Enjeti
Greatest city on the globe.
- [95:01]
C
But what good is that if no one can afford to live here? City hall is engulfed in corruption. The cost of living is the real crisis. New Yorkers are being crushed by rent and childcare. The slowest buses in the nation are robbing us of our time and our sanity. Working people are being pushed out of the city they built. A mayor could change this, and that's why I'm running. I'll make buses fast and free so.
- [95:30]
Krystal Ball
I can just get where I'm going.
- [95:32]
C
I'll make childcare available to all New Yorkers at no cost.
- [95:36]
Sagar Enjeti
I want to raise my kid in New York.
- [95:38]
C
And I'll freeze the rent for every single rent stabilized tenant.
- [95:42]
Sagar Enjeti
These Eric Adams rent hikes are killing us.
- [95:46]
C
Life in this city doesn't need to be this hard.
- [95:49]
Krystal Ball
And Zoran Mandami joins us now. Welcome. Great to have you.
- [95:53]
C
Thank you so much for having me. It's such a pleasure.
- [95:55]
Krystal Ball
Yeah, of course. So it's been really exciting to see, you know, your polling numbers have taken off. Of course, Cuomo's jumped in the race, and like you said, he's kind of a political juggernaut. But just talk to us a little bit about who you are, your platform, and why you think that it is resonating at this point with New Yorkers.
- [96:12]
C
Absolutely. I was born in Kampala, Uganda, and East Africa, and I grew up here in New York City. I moved here when I was seven years old. And I am now in my third term as a State assembly member. And in my time in office, I have fought alongside taxi drivers to secure more than $450 million in debt relief for the working class drivers who were sold alive by the city. I have defeated the 8th largest carbon emitter in the country when they sought to build a frack gas power plant in Astoria and won more than $100 million in increased subway and bus service, as well as a reduction in the fare hike alongside a historic fair. Free bus pilot in New York City. And all of those things are driven by a politics whose north star is the fight for working people. And that is ultimately what this campaign for mayor is about. Making this city more affordable for the working class who built the city but are being priced out of it.
- [97:04]
Krystal Ball
I want to play a little bit of Cuomo's announcement video here, which was was quite lengthy, I must say, but I just want to get your reaction to it and the way he's positioning himself. Let's go ahead and take a listen to a little bit of what he had to say.
- [97:18]
Sagar Enjeti
You feel it when you walk down the street and try not to make eye contact with a mentally ill homeless person, or when the anxiety rises up in your chest as you're walking down into the subway. You see it in the empty storefronts, the graffiti, the grand, the migrant influx, the random violence. The city just feels threatening, out of control and in crisis.
- [97:44]
Krystal Ball
So what did you think of his video and the way that he is sort of situating himself in this race?
- [97:51]
C
Well, I'd be interested to know when the last time was that Governor Cuomo actually walked down the stairs and took the subway, because I can't recall that off the top of my head when it comes to him, given the fact that he hasn't lived in New York City for more than two decades. You know, he is trying to portra this as a city in chaos that requires someone like him to deliver a steady hand through that time. And the irony of it all is that he is the chaos. Many of the issues that he has identified are ones that are direct results of policies that he pursued as the governor of the state. Whether it was shuttering hospital capacity across the city, whether it was cutting funding for New York City, whether it was stealing money from the mta. There is so much of what we are living through right now that is a direct result of his time in Albany as a disgraced governor. And I understand why Andrew Cuomo is running away from his record, because if that was my record, I would try to do the same as well.
- [98:46]
Krystal Ball
What do you think will be different for you in this campaign versus other progressives who ran against Eric Adams last time? Because, I mean, I hear this Andrew Cuomo message. It sounds very similar. They're stylistically somewhat different, but very similar to the way Eric Adams position himself. I'm being tough on crime. The chaos is going to be over. We're going to, you know, deal with this issue of your. Of your personal safety, etc, and kind of a law and order approach. So he's very much trying to put himself into that lane at this point. And look, last time around, it was successful. So how do you sort of respond to that and reassure people that, you know, you're going to be serious about the. The issues that they're concerned about that led them to vote for Eric Adams in the first place?
- [99:29]
C
Place, you know, to your point, Andrew Cuomo is running for Eric Adams second term. It's the same agenda, the same donors, the same chaos, the same corruption. And I think a lot of New Yorkers can see through that. But to your point about 2021, one of the things that I recall is Eric Adams running on a promise to New Yorkers that they need not choose between safety and justice. And I think it's easy for us to characterize him as a candidate then as if he was a full representation of him as a mayor now, when in fact he did run with messages beyond that of the mayor he has become. And that's why so many New Yorkers feel betrayed, is that they did vote for him in the hopes that it was the son of the working class to deliver the outer boroughs into City Hall. And yet he has been a mayor for the millionaires and billionaires of the city and described himself as real estate. And the campaign we are running is a campaign laser focused on the cost of living crisis. It is a campaign that says while we must tackle the crisis of corruption in City hall, that most New Yorkers cannot even afford to worry about that crisis because of the cost of living. Because if they can't afford their rent or their childcare or their groceries or their MetroCard, they can't afford to worry about anything that's happening in local politics. And that also means being serious about safety. And I'm excited that in the next month, we're going to be putting forward a proposal that will be unveiling a new department within city government called the Department of Community Safety that will tackle these issues that Andrew Cuomo is pretending to address and actually deliver substantive solutions. Because ultimately, what we're seeing, whether it's from Cuomo or Adams or a whole host of establishment politicians, are the same ideas to the same crisis that has pervaded for years and is only going to deliver us the same results. And what New Yorkers deserve are outcomes. And what we're excited to present is data driven proposals that are built off of the successes we've seen in cities across the country that New Yorkers finally deserve to call their own.
- [101:29]
Krystal Ball
You know, zooming out a little bit from your race and relevant to the comments you just made, you know, the knock on people like you and me who have very similar politics is that, oh, it only appeals to this, like, sort of small sliver. Sure, an AOC can win in New York City, but it doesn't have a broader appeal. It's these, you know, affluent, young, mostly white people in Brooklyn that are sympathetic to your style of politics. How do you get beyond that caricature? How do you build a truly working class base, you know, multiracial working class Coalition. And what also are the lessons for the broader Democratic Party about how to achieve that? As you know, those constituencies have been fleeing or just staying home or moving over to the right and voting for Republicans.
- [102:19]
C
You know, I think there's often a temptation in the Democratic Party to treat non white constituencies purely through the prism of race, as opposed to also addressing the immense way in which class shapes every person's life in this country. And what we've found is an incredible amount of success in speaking to black New Yorkers and brown New Yorkers and every kind of New Yorker with that same focus on an economic agenda. Because when we look at the impacts of this crisis, of a cost of living, these impacts are racialized. And what I mean by that is they disproportionately push black and brown New Yorkers out of New York City. From 2010 to 2019, we lost nearly 20% of the city's population of black children and teenagers, nearly 20%, because of how expensive the city had become and that their families had to leave. That is something that needs to be tackled head on at the source of it, which is the fact that rent is too expensive, childcare is too expensive, even our Metro cards are becoming too expensive. And I think that the way that we actually build a message that resonates beyond one strip of the waterfront is by ensuring we're taking this message to all five boroughs. And I was very heartened to see in the last fundraising period, we had the most donations from more than 100 different zip codes across New York City, that we raised more money than any other campaign did, so from more New Yorkers than every other campaign combined. And ultimately, an inspiration for this politics is also thinking about Bernie's runs for president, where even when he came to New York City, he managed to win More than 40% of the vote on Staten island, which is often considered a place where Democrats are that simply in name only, when in fact, Staten Islanders are just like any other borough where people are feeling left behind by the economic policies of this mayor and of this party. And it is an urgent moment for us to respond by putting forward an alternative path that actually speaks directly to working people.
- [104:21]
Krystal Ball
What has your reception been from the sort of mainstream Democratic Party? I've seen, you know, I've seen some people, Hakeem Jeffries, unwilling to say, like, hey, Eric Adams, maybe you should resign. Kirsten Gillibrand being sympathetic to Andrew Cuomo, even though, you know, she was at the forefront of the. The MeToo movement previously. But what if. What have some of the, you know, know, what has the overall reception been? Have people from the mainstream Democratic Party reached out to you? Because I think it's undeniable the way you've been communicating and certainly your grasp of social media and how to make viral content and how to understand the attention economy, like, these are things that the Democratic Party really should be, like, trying to learn from. Do you get any sense of that? Or are they just, you know, afraid because you represent a different, different brand of politics that's not going to be beholden to the, the corporate and the billionaire class?
- [105:15]
C
I think there's definitely a little bit of that fear. I think also there's been quite a bit of surprise. You know, when we launched this campaign, there were many who treated it as an interesting idea at best, and it was discussed as if it was something that would come and go in the span of maybe a few weeks at best, maybe a few months. And now being the best place progressive challenger to the failed mayorality of Eric Adams and the disgraced governor of Andrew Cuomo, that is something that many did not expect. Now, we always believed that there was a pathway for this kind of politics, because ultimately, I think there's been a misreading of our political context in New York City, where people have thought that Trump winning more votes than a Republican nominee for president in many years in this city, a. A rightward shift across New York State, the most of any state in the country, is all indicative of a shift towards the right wing when, in fact, almost five times as many people who voted for Trump over Democrats as they had in 2020 instead stayed home. And what I think that speaks to is the need for a politics that is, for something that is fighting for working people that requires no translation, that when I say the platform, you know what it means in your life, and that's freezing the rent, making buses fast and free, delivering universal childcare, building 200,000 affordable homes. These are things that people understand because it's the very things that they're missing in their life. And I think that's what's created this pathway for us, and we'll continue to do so over the next three and a half months.
- [106:46]
Krystal Ball
Last question for you. What is it going to take to be able to defeat Andrew Cuomo, and how can people support you if they're so inclined?
- [106:54]
C
I would say there's two things. The first is money. Andrew Cuomo's allies are already setting up a super PAC with the goal to raise $15 million. We're lucky in New York City that we have a public matching fund system where the city matches a New Yorker's contribution eight to one. We've already raised $4 million. We can raise another 4 million through this program. And so I would ask anyone who's interested in supporting us and in defeating disgraced New York executives, whether past or present, to visit zahran4nyc.com and the other thing I would say is that we are going to knock on a million doors across the city. So if you would like to canvas, go to that same website and you will find many an opportunity to knock on your neighbors doors and tell them that there is a city we can win and it's one that their neighbors can actually afford.
- [107:39]
Krystal Ball
Well, I know from my New Yorker friends that you have really captured people's imagination and generated tremendous energy. So congratulations on that to begin with and good luck to you as well. Thank you so much for joining us.
- [107:50]
C
Thank you so much. It was such a pleasure.
- [107:52]
Krystal Ball
Yeah, it's our pleasure.
- [107:54]
Sagar Enjeti
All right, guys, thank you so much for joining us. You know, Crystal was at home, but everything will be all normal next week. At least for now.
- [108:00]
Krystal Ball
I'm gonna say that whatever that means at this hour, just wait.
- [108:03]
Sagar Enjeti
Something's gonna happen. You know, Emily's actually gonna be in for me three days a week. I'm joking, I'm joking. System's normal.
- [108:11]
Krystal Ball
We are planning on doing some kind of mini show tomorrow as well, so, so keep your eyes out for that and we will see you guys back here next week.
- [108:19]
Sagar Enjeti
See you guys later. Hey, Jenice Torres here and I'm Austin Hankowitz. We're the hosts of Mind the Business Small Business Success Stories produced by Ruby Studio and Intuit QuickBooks. Catch up on seasons one and two and join us for a brand new season of the podcast as we talk to small business owners about how they manage and grow their businesses with the help of platforms like Intuit QuickBooks. Listen to mind the Business small business success Stories on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts. You know more about the PayPal debit card than you did at the start of this podcast. You know that the PayPal debit card gives you the ability to pay everywhere. You know that you earn 5% cash back on a category of your choosing on up to $1,000 of monthly purchases. And you know that you get to pick a new category every month. Apparel for back to school, Groceries for the holidays. Start earning 5% cash back with the PayPal debit card today. Don't just pay PayPal terms apply. See PayPal app. This card is issued by the Bancorp Bank NA pursuant to license by MasterCard International, Inc. Creativity doesn't wait.
- [109:34]
Krystal Ball
It moves, shifts, evolves. Just like you. And with the Yoga PC from Lenovo.
- [109:40]
Sagar Enjeti
Your tools finally, keep up.
- [109:43]
Krystal Ball
Stunning, smart and sustainably sourced yoga PCs.
- [109:46]
Sagar Enjeti
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- [109:49]
Krystal Ball
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- [109:51]
Sagar Enjeti
Whether you're sketching, editing, animating or composing, yoga moves with you adapting to your creativity, to your rhythm.
- [110:00]
Krystal Ball
With beautiful displays in the flexibility to shift from laptop to tablet, yoga unlocks.
- [110:06]
Sagar Enjeti
New ways to inspire and create.
- [110:08]
Krystal Ball
Because at Lenovo, we believe your tools should fuel your flow, not hold you back.
- [110:13]
Sagar Enjeti
Yoga PCs from Lenovo support you at every step of your creative journey. So check out lenovo.com yoga and supercharge.
- [110:22]
Krystal Ball
Your creativity with yoga, empowering creators everywhere.