5/14/26: JD Gaslights On Trump Not Caring About US Finances, US Test Scores Plummet, Tucker Humiliates Kevin O'Leary

Summary

Podcast Summary: Breaking Points with Krystal and Saagar

Episode: May 14, 2026 – "JD Gaslights On Trump Not Caring About US Finances, US Test Scores Plummet, Tucker Humiliates Kevin O'Leary"
Hosts: Krystal Ball & Saagar Enjeti | Guest: Zach Exley

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Episode Overview

This episode tackles three pressing and contentious issues in contemporary American politics and society:

1. JD Vance’s denial of Trump’s indifference toward Americans’ financial struggles amid the Iran war, and a deep dive into the war’s impact on US inflation and consumer hardship.
2. A sobering report on the dramatic and sustained decline in US student test scores in math and reading, with cultural and technological factors under scrutiny.
3. A provocative conversation with Zach Exley on AI’s economic disruption, the local backlash against data centers, and why capitalism as we know it may not survive the coming wave of automation.

The hosts blend sharp analysis, spirited debate, and moments of levity while maintaining a consistently critical and inquisitive tone toward power and the status quo.

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1. Trump, JD Vance, and the Financial Cost of War

(Segment starts at 02:42)

The Controversial Denial

• Context: Trump, in talks on Iran, said Americans’ financial situation was irrelevant to his decision-making on war with Iran. VP JD Vance was questioned about this and denied Trump said it.
• Direct Quote – Trump (03:46):
  “Not even a little bit. The only thing that matters when I'm talking about Iran, they can't have a nuclear weapon. I don't think about America's financial situation... that's all.”
• Krystal’s Reaction (04:11):
  “At a certain point what do you even do? You just deny that it ever happened?... Not good. And Vance having to just lie about him... shows you what a devastating quote it ultimately was.”

Economic Fallout from the Iran War

• Inflation Rising Rapidly:

  • Saagar (04:18): Summarizes a New York Times report — “Producer Price Index... rose 1.4% in April and was up 6 % from a year earlier... attributable to a war of choice in Iran.”
  • Wholesale and consumer inflation are at multi-year highs.
  • Inflation’s Source: War with Iran blamed directly; "energy prices jumped by 7.8% in April after rising 10.1% in March" (06:16).
  • Corporations are passing costs to consumers and using inflation to justify even higher price hikes.

• Personal Impact Stories:

  • Krystal (06:16-08:44): Discusses how energy price shocks ripple out; illustrative anecdotes about travel costs skyrocketing; sticker shock for ordinary expenses.
  • Saagar (08:44): Highlights rising credit card and mortgage delinquencies. “Numbers here have skyrocketed... This is a very poor sign for the US economy in spite of... job gains... you see these incredible signs of stress throughout the economy.”

• Long-Term Malaise:

  • Krystal (10:39):
    “Instead it’s just year after year after year it gets more expensive. The house price goes up, the mortgage rate... It’s like this slow grinding thing...”

• Climate, Food & Energy Compounded:

  • Wheat futures spiking after the lowest projected harvest since 1972, due to drought and weather extremes, foreshadow food price increases and even famine in poorer nations (12:24-13:52).

Notable Quotes

• Saagar (13:52):
  “In poor countries, famine.”

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2. US Test Scores Plummet – Causes and Culture Clash

(Segment starts at 17:11)

National Decline in Student Performance

• Krystal (17:11):
  Reviews a New York Times investigation showing “a generational long decline” in reading and math across all demographics, beginning before COVID and worsening through and after.

  “Reading scores were down last year in 83% of school districts... Math scores were also down in 70%... It’s cultural, almost certainly, and it’s technology.”

• Saagar (20:39):
  “It’s not just about the phone... All the homework has to be done on Chromebook. Yeah, I think that's gotta go. Honestly... No PowerPoints, nothing. Paper homework, period.”

• Even bans on phones/chromebooks in schools don’t reverse the overall trend: “the declines continue even in schools with bans.”

Technology, Culture, and Parental Struggle

• Mass Screen Time:

  • Both hosts argue screen culture has replaced educational pastimes like board games, impacting math and critical skills (23:24 – board games and card games as basic numeracy training).
  • “Screens take up everything... Other activities that were more educational... are pushed out to the side.” (Saagar, 23:24)

• Parental Limits Aren’t Enough:

  • Krystal (24:54): “You have to be rich and you have to be f---ing crazy... The point is, even if you're a 'low tech' family, you're really just not that far off from the tech-heavy families.”
  • American children on average now log 19 hours/week of internet device use.

• Risk Aversion and Independence:

  • Today’s kids are far less likely to go places unsupervised, compounding the cultural narrowing of experiences (29:56).

• Class Inequality in Recovery:

  • Richest and poorest students bounced back better post-pandemic (private resources for the rich, targeted programs for the poor), leaving the middle class most behind (25:17).

Notable Quotes & Moments

• Saagar (32:46):
  “When you meet like an 18 year old New York kid, you're like, you're like 30 dude.”
• On AI/Education Dystopia:
  • Mocking Israeli and Melania Trump’s AI-in-schools push (33:57)
    • Krystal: “That’s my line for sure. Oh, you start. Put GPT in a five-year-old’s face. No, no, no, no, no.” (34:40)

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3. Zach Exley Interview: Data Centers, Economic Collapse, and Post-Capitalist AI

(Segment begins at 37:08)

Data Center Backlash and Surveillance Society

• Lead-in: Saagar highlights viral Tucker Carlson–Kevin O’Leary debate over huge data center projects in rural Utah, suggesting the US is replicating China’s surveillance state (38:31).
• Local opposition is fierce: “7 out of 10 Americans said they would oppose a data center being built near them. More would rather live near a nuclear plant.”

Exley’s Take: AI, Automation, and the End of Capitalism

• Exley: “I think it's great people are fighting back against data centers... but it’s not a solution to the whole problem of AI.” (41:20)

• The core insight: AI will soon be able to do “anything that a human can do at their computer,” ultimately rendering much of human knowledge labor obsolete.

• Key Mechanisms:

  • Limitations to full automation (memory, linking to input devices) are technical and solvable (47:13).
  • Once solved, a single AI agent could replace whole teams, sectors; “Projects that would have taken a year... I can now do with it in days.” (47:13)
  • Saagar (52:16):
    “This really gets to your thesis that capitalism... cannot handle these changes. Can you lay down why you think it will lead to... collapse?”

• Capitalism’s Fatal Flaw with AI:

  • Capitalism requires customers; automation eliminates jobs, which destroys demand – the “demand doom loop.”
  • Governments have interrupted such spirals with bailouts in the past. Exley argues this time, replacement jobs won’t exist.
  • “We are not going to have value as workers for capitalism. And that means they're going to lay us all off.... Capitalism seizes up and really cannot function anymore.” (53:27)

• Elite Escape Fantasy?

  • Even if only the rich remain customers, they alone can’t sustain the economy; if the elite retreat and build their own “capitalism,” it’s actually a form of socialism for themselves (57:11).

• What Comes Next?

  • The transition: Exley urges political leaders and movements to prepare for mass economic change, advocate for taking over failing assets (data centers, companies) as collapse unfolds, and design a post-capitalist economic system.
  • “We need to take possession of this stuff and, you know, we can just buy it up as it's going out of business… I'm not cheering for the collapse so that we can do this. It's just that I think it's very clear this is what's going to happen, I think, in the next year or two.” (60:12)

Notable Quotes

• Zach Exley (52:34):
  “Capitalism needs customers. And it’s so basic and simple... When capitalism runs out of customers...”
• Zach Exley (56:51):
  “We are not going to have value as workers for capitalism. And that means they're going to lay us all off.”

---

Memorable Moments

• Tucker Carlson eviscerating Kevin O'Leary on democratic process:
  (39:31)
  “How hard is it for Kevin O’Leary and Amazon and Microsoft and Google to subvert three county commissioners in rural Utah?”
• Krystal’s line in the sand on AI in schools:
  (34:40)
  “Oh, you start. Put GPT in a five year old's face. No, no, no, no, no.”

---

Key Timestamps

• 02:42: Trump & JD Vance on financial considerations in war
• 04:18: Inflation and producer price index surge
• 08:44: Credit card & mortgage delinquencies
• 12:24: Drought, wheat futures, food prices
• 17:11: US student test scores and causes
• 29:56: Decline of childhood independence
• 33:57: Dystopian AI education initiatives
• 37:08: Zach Exley interview: AI, data centers, and the future of capitalism
• 47:13: How close AI is to replacing knowledge workers
• 52:34: Capitalism’s fatal flaw in the AI era
• 60:12: What to do in the coming collapse

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Tone and Takeaways

Breaking Points delivers a skeptical, anti-establishment perspective, heavily critical of elites and technocratic solutions, while rooting for empowering social and political movements as a response to economic and technological upheaval. The episode balances alarm, realism, and (between hosts) an authentic, lived-in banter about the daily impact of political and economic decisions.

---

For further reading:

• Zach Exley’s report, "Why Capitalism Can’t Survive AI," at New Consensus

End of Summary

Transcript

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[Krystal Ball]

Hey guys, Sagar and Krystal here.

[Saagar Enjeti]

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[Krystal Ball]

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[Krystal Ball]

We need your help to build the future of independent news media and we hope to see you@breaking points.com.

[Saagar Enjeti]

let's turn to how things are going domestically in the US As Trump is at his big meeting in China. So you'll recall yesterday we covered Trump getting asked whether he considers Americans financial situations when thinking about the Iran war. And he said no, I don't think about that at all. Well yesterday Vice President JD Vance got asked about those comments and just straight up was oh, I don't think he said that at all. Let's take a listen. When approaching the war with Iran, do you agree with the President's position that Americans financial situations should not be a consideration in that decision making process?

[Krystal Ball]

Well, I don't think the President said that. I think that's a misrepresentation of what the President said. But look, I agree with the President that Iran should not have a nuclear weapon. We're obviously engaged in a very aggressive and very engaged diplomatic process to try to ensure that that doesn't happen. And the President has a lot of options.

[Saagar Enjeti]

So he thinks that was misrepresented. He doesn't think the President said that. Just as a reminder, here are the President's own words. When you're negotiating with Iran, Mr. President, to what extent are American financial situations motivating you to make a deal?

[Krystal Ball]

Not even a little bit. The only thing that matters when I'm talking about Iran, they can't have a nuclear weapon. I don't think about America's financial situation. I don't think about anybod. I think about one thing. We cannot let Iran have a nuclear weapon. That's all.

[Saagar Enjeti]

That's the only thing that motivated. There's a whole quote, literally I don't think about Americans financial situation. Sagar.

[Krystal Ball]

Yeah, I mean at a certain point what do you even do? You just deny that it ever happened? I guess it took queer context apparently.

[Saagar Enjeti]

Not good. Yeah, not good. And Vance having to just like lie about him. I don't think that's what he said. Just shows you what a devastating quote it ultimately was. So let's take a look at American's financial situation. Shout. We got another very hot inflation reading. Let's put C3 up on the screen. This was wholesale prices that jumped in April from the New York Times they say prices rose at their fastest rate in four years. The latest sign that the war with Iran is taking a toll on the US Economy. The Producer Price Index, a measure of the cost that businesses pay for goods and services, rose 1.4% in April and was up 6 from a year earlier. You can see the spike there, guys, on that chart. And it's very clear what that is attributable to. That is attributable to a war of choice in Iran that this president decided to start at the urging of Benjamin Netanyahu. That is why these prices are going up, they go on to say. The news came one day after the government reported the better known Consumer price index rose 3.8% in April from a year earlier, the fastest pace of inflation in nearly three years. Producer Index typically gets less attention than the consumer index, but economists watch the measure closely, especially during periods of global disruption, because it gives an early look at how costs are filtering through the supply chain. So these are wholesale prices. This is what businesses will be paying. Do you think that they're going to just absorb those costs and decrease their profit margins? Of course they're not. They're going to pass those costs on to you and very likely then some. In addition, because we hear them on their earnings call, Sagar, we saw this play out during COVID where they were bragging to their investors about, hey, because of inflation, we're able to raise our prices above and beyond even what our increase in costs are. Which is why corporate profit margins have continued to go up and up and up no matter what the inflation numbers are doing and whether their actual costs have risen at the same pace.

[Krystal Ball]

Yeah, exactly. And actually initially, what they had seen in the last time that this happened from last month, the BLS said that PPI rose only by 0.5% in March, which they said at the time was an encouraging sign that the energy price shock was not setting off a broader inflationary spiral. However, after two months, they say that optimism is now called into question. The increase in March was revised up and April's gain was triple what forecasters had expected. Energy prices jumped by 7.8% in April after rising 10.1% in March. And the price increases were not limited to energy key point core producer prices. Energy and other volatile categories were up 4 to 5% from the year before. Suggests that the oil price shock, as well as the tariffs is working through the supply chain. I will just challenge anybody in the world to tell me that a 17% increase in energy is not going to show up in a bill somewhere. I mean, obviously be real, like, you know, just take a look at credit card debt at all of the other consumer, you know, goods that are beginning to price. Honestly, I still don't even think that we've begun, began to see really any of it because right now the increase, it's only been two months. It's only at the gas pump and with diesel, there are contracts being booked out six months from now. There are hotels that people haven't booked yet for August or for September. There's some guy out there, maybe me, who's supposed to have done a rental car who hasn't done it yet. Like there are guys like that who. It's been on his task list from his wife for over six months and he's just going to push it to the end. There's a guy out there, again, maybe me, who is going to be paying probably triple for what he was supposed to have paid if he had just done it whenever he was told. But that is one of those which is just going to continue to ripple out, I think, through the economy where their sticker shock at these things is just so crazy. I was just talking to my parents because they flew back from India and they're saying if you want to avoid the Middle east, like right now, the price, the going rate for an economy seat is literally what people were paying for business like a year ago. Again, if you want to take the risk of, oh, I don't know, getting shot by a drone on your approach into Dubai International Airport, that's the reality of just like basic international travel plus jet fuel, grocery price. I just think really it has not even begun to show up.

[Saagar Enjeti]

Let's get forward to C6 just to show you the level of stress that the American consumer is already under. So this is credit card delinquencies, 90 days plus delinquent. The numbers here have skyrocketed. And this is not just Iran, war and gas prices. This has been, for the past two years, those numbers have been going up and up and up. And you can see mortgage delinquencies there at the bottom. 90 plus days delinquent. Those are edging up as well. These are dire warnings for and signs that the American consumer is tapped down. This means they are using credit cards to sustain their lifestyle, perhaps even just sustain their ability to pay bills at the end of the month. And they are running out of Runway because now they're not able to even pay those credit card minimums at the end of the month. So this is a very poor Sign for the US economy in spite of. Was it Kevin Hassett that went on and was bragging about like, oh, credit card spending's up. As if that was somehow a good thing Again, it's a good thing I guess if you are one of those credit card issuers. But for ordinary people this is obviously a disaster and shows just how stretched people are and the ends they're having to resort to in order just to keep it together. So while unemployment continues to be relatively low. We did the last hiring report was relatively good. It was over 100,000 jobs that were added. You see these incredible signs of stress throughout the economy. And you also just see logically the way that the growth sectors in the economy, which is largely like AI and I guess gambling, do not benefit. And in fact they are predatory and exploitative of the American public. You add on top of that the negative impacts, increase in inflation, increase in gas prices on the American consumer because of the Iran war and it's a very bad looking picture.

[Krystal Ball]

Yeah, I mean look, the credit card stress one, I don't know, it's hard to say. We've said we've covered it now for five years. It's one of those where I think a lot of people often have a modal outcome of like 2008, like one big moment. I don't really think that that's what's happening here. I think what's happened is what's reflecting in our politics and in the general happiness and feeling levels. It just gets worse every year. Nobody's breaking. There's no great kumbaya moment where everyone's like, oh, it's all fake, this entire thing. Cuz that's very cathartic. And instead it's just year after year after year it gets more expensive. The house price goes up, the mortgage rate. It's like this slow grinding thing that where you can just look back over the period of your life and say, oh wow, it's actually a lot worse. It's really shocking whenever you confront it from a. I think I've talked about, I always talk about my McDonald's stories because that genuinely is like a five year difference of him. Like wait, what? And I'm sure everybody has felt that at some point. People, coffee. I know you're not a coffee person. I buy specialty coffee. The price increase is so insane. It's up 100%. Literally 100%. I was looking at my old orders for what we would pay with the stuff that we drink here in the studio compared to what it was I was Like, I can't believe this. Now, granted, it's already specialty or whatever, but then I looked at the wholesale price and I was like, oh, so this is actually reflective of the whole market. But the thing is, if you experience it daily, then the 5% or whatever cumulative inflation year over year, you get conditioned slightly to it. But it's only when you look back at the long increase of 21, 22% that you're like, wow, I really have materially become way worse off in terms of what I'm spending.

[Saagar Enjeti]

Yeah, yeah. One more thing here, C5 that was flying around yesterday. Chicago Board of Trade wheat and KC wheat futures climbed by their daily trading limits on Tuesday after the U.S. deposit Department of Agriculture projected the nation's harvest will drop to the lowest level since 1972. Now, I think a lot of people saw this and assumed this is because of the Iran war. Those effects from the Iran war, those are ones we're still waiting on that will come in the next harvest. Okay. When fertilizer was so expensive that we're already having farmers, farmer bankruptcies have been accelerating. We're already having farmers saying we can't afford to fully plant our crop. That is all in our future. This is a warning sign of what is to come though, because this is because there was a devastating drought and very strange like weather patterns last planting season. This is wheat that's sown in the fall and then, you know, now is when it should be harvested. And there was massive problems because of this drought and then unseasonably warm weather in certain parts of the country that screwed up this crop for a lot of farmers. Again, this is, you know, very likely fallout from climate crises that has been exacerbated over the years and is something we can continue to expect in the future, but definitely not because of the climate crisis. This time we can expect for sure we're going to have problems because of the issues with fertilizer and the increased cost there for farmers.

[Krystal Ball]

So in general, low harvest means what? Limited amount of supply, which means higher

[Saagar Enjeti]

prices and it means in poor countries, famine.

[Krystal Ball]

Famine, fertilizer, oil, credit card. I don't think, I don't think anything is yet at a so called breaking point or anything. I do think if we get to six, seven dollars a gallon, that we will be. And I still not far off. I mean, nothing has happened.

[Saagar Enjeti]

It's very stable.

[Krystal Ball]

Absolutely nothing has happened. How much is gas up? Let me take a look. Yeah, 453. It was 452 yesterday. So it just, you know, give it a week. Every week it goes up by 6%. 7%. Gas is 614 a gallon. In California it'll probably be 7. I think I saw that in Los Angeles it's around 650, almost $7 a gallon. Very not uncommon to see $8 diesel or any of these things. The national average of Diesel today is 566gallon and the all time high is 581. So give it what a week and we'll probably be there or another bombing or something like that to happen. I don't know. All right, let's get to test scores.

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[Jacob Goldstein]

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[Krystal Ball]

Turning now to test scores, this is a really depressing investigation from the New York Times with a lot of data behind it. I encourage you not only to go read it for yourselves, but there's a tool where all of you can go and look at your individual school district and see what is Almost certainly a 10 year decline in the test scores for children for math and reading. So let's go and put this up here on the screen. They say why test scores are in a generational long decline. And in general, what they see is that across America, whether you're rich, whether you're poor, whether you're black, whether you're white, whether you're Hispanic, whether they've done this program, whether they've done that program, students are performing worse than their peers 10 years ago. District level test data which was released by the Educational Opportunity Project at Stanford reveals that compared with a decade earlier, reading scores were down last year in 83% of school districts where data was available. Math scores were also down in 70%. The declines have affected rich and poor and crossed racial and geographic divides. The new data provides the first national comparison of school districts through 2025 and shows a detailed picture of individual school districts have performed over time. From 2017 to 2019, students lost as much ground in reading as they did during the pandemic. Reading scores continued to fall at a similar rate through 2024. Immediately after the pandemic, there was hope that students would recover quickly. New data shows that scores have inched upward in reading last year and have climbed more steadily in math since 2022. But it's been nowhere near enough to make up for lost grounds. So in other words, the Decline began in 2017. If you look on this long timescale, however, it got exacerbated but way worse by Covid then there's been a modest uptick, but it's still lower than where we are in 2017. And I think that's what you know. And the funny thing is when everybody starts to look at like, oh, what is it? Here's the thing about the education system and I see a lot of conservatives. Like the whole education system is corrupt. You think the education system is corrupt in Utah? Because school district is down in Utah.

[Saagar Enjeti]

Okay.

[Krystal Ball]

Math and reading is down in Utah. Education is one of the last bastions of localism that we have here in the United States. If you as a citizen want to have an impact, as we saw during all the CRT debates and all that, you actually can, like, you actually can have an impact on your school district if you want to as a parent. That's what property taxes are for, by the way. And one of the reasons you pay them is because you have an investment actually in it. Yes. Even if you're childless. Boomer. Or if your children are no longer in the education system. But the point that you see here, the whole nation, it's one of the most decentralized systems in the world. Right. Every school has funked by the local school board and the state. There's been all of the. I mean, how many pilot programs have there been, right? Charter schools and this school, and that's magnet schools. And New York City does something this way and California does something that way. At the end of the day, the test score has gone down, which means only one thing. It's cultural, almost certainly, and it's technology. I just, I do not see a way out of it. And let me just put my cards up here at the front. Technology alone in the school is not gonna save you. Because as they point out, they've still continued to see declines, even in schools where they have had phone bans.

[Saagar Enjeti]

Yeah.

[Krystal Ball]

Cause it's not just about the phone. We were talking earlier about Chromebook and you were telling me about how your kids school, like they issue them all Chromebooks. All the homework has to be done on Chromebook. Yeah, I think that's gotta go. Honestly, at this point, I even think the overhead projector's gotta come back. No PowerPoints, nothing paper homework, period. Because I mean, you read these stories, the Wall Street Journal, Chromebooks, and somehow, you know, there's some whiz kid, as we all used to do with LAN on our computers. This is 20 years ago, you know, to play Halo or whatever. People will always figure it out. Some mother discovers that her son's been watching 7,000 hours of YouTube two years on his school issued. 7,000 hours of YouTube on his school issued Chromebook. That's an extreme example, but I'm just giving one of what it is. The fact is, is that the mass distraction in college. Cuz remember, this is, this is also being found in college and universities is we are seeing it now across the entire United States. And that's why, you know, a lot of conservatives were like, oh, it's being woke. I'm like, again, like, you literally, like, it's in Florida too, guys. It's in Utah. It's the whole nation. It's a much more. It's a much bigger problem. Like you can have those individual debates, but I don't know, I see no other evidence. Like, it's just technology.

[Saagar Enjeti]

And there are. I think, if memory serves, I could go back and look at the chart. There were three places that defied the trend. One of them was dc.

[Krystal Ball]

Yeah, And Mississippi.

[Saagar Enjeti]

Mississippi was another. And I think Hawaii was the third, which shows you to your point. Those are very different places ideologically, you know, so this isn't really a liberal versus conservative thing and we should all be looking at Mississippi and dc.

[Krystal Ball]

Part of what I hate to say this, Mississippi and DC were so shitty that being modestly increased is like, so let's be on. Look, no disrespect, but it's true. D.C. i remember they did that.

[Saagar Enjeti]

I don't think Hawaii was great shakes either.

[Krystal Ball]

Remember the documentary about D.C. schools and how awful they were with that eight? What was that woman?

[Saagar Enjeti]

Oh yeah, the.

[Krystal Ball]

The Asian lady.

[Saagar Enjeti]

Yeah. Gosh, I forgot too. She came in, she was a big charter school proponent. Whatever. Anyway, I know part of what they did in D.C. is there's this very. It's very controversial, like the way to teach kids to read. Even though there's a very science based analysis that teaching phonics is the way to go and like doing it in a, you know, rather than the sight reading ways that, you know, people used to do in the past. Whatever. Anyway, so DC really fully implemented that and that seems to have worked for them well. But to your point about. This is obviously a national issue, it's obviously a cultural issue. I don't really know that I would pin it so much on the Chromebooks and the school. I think it's more about culturally, like people, they don't read books. Right. Instead they're on their screens. That's a big shift. You know. Another one that people don't talk about is another thing that screen time replaced is board games.

[Krystal Ball]

Yeah.

[Saagar Enjeti]

Now board games are very good in terms of math skills, like just very basic. I have to roll the dice and I have to add them together and know how many places to move and be able to count that out. Or, you know, dealing with money if you're playing Monopoly and these sorts of things. This is Something that one of my children's teachers told me she was like, you know, older towards retirement. She said one of the big differences she notices is kids coming into kindergarten, they don't have that basic numeracy because they're not playing card games, they're not playing board games. So that's another one. I mean, this is just, you know, the screens take up everything. And so that means that other activities that were more educational and help to develop brains more effectively are pushed out to the side. And the other thing that this data shows you is that whether you looked at families where they were like, go wild with the screens or families that considered themselves to be more restrictive, they did a little bit better. But there is a huge increase in screen time for everyone. And this is where I get sort of frustrated with some of the conversations, the debates that unfold online that's like very judgmental about parents and how much screen time their kids are getting. And listen, we have restrictions in my household. I do my best. I know every parent is out there doing their best for their kids to try to figure all this stuff out. But you are up against a multitrillion dollar industry. I know you are up against an entire culture. The idea that you are going to be able to just individually bootstrap your way to avoid the complete dominant culture, I mean, it's impossible. It's genuinely impossible.

[Krystal Ball]

You can, you have to be rich and you have to be fucking crazy. You actually have to be crazy.

[Saagar Enjeti]

And then there's downsides to that because then your kid is weird. Like they're not in total touch with the dominant culture. And there's something to be said for being weird, right? I mean, some of the greatest thinkers and insights and creatives and whatever come out of people who don't grow up in the mainstream culture. And so they have a different perspective. But you know, most people are not going to be able to pull that off. The other thing that came out in this data that I thought was really interesting is in terms of the post Covid improvements, the two sectors of society that have done the best are the rich. Predictable, because they can invest in tutoring and whatever supports they need, blah, blah, blah. And the poor, because there were programs there was money put in place of like, okay, we know we had this learning loss during COVID we've got to do something. And it's actually the sort of middle income, just like your average middle income district and family that has seen the least improvement post Covid because they don't have the resources of the Rich to helicopter parent in and do everything possible and potentially with one stay at home parent that can do all the work on the side and they don't have the extra support from the state and from the government to help get their kids back up to speed. So I thought that was really noteworthy as well.

[Krystal Ball]

Yeah. And to your point here about the culture and this is, when I say Chromebook, I'm not blaming just the Chromebook. I'm saying that it's about the ethos of doing things on the screen. You know, there's been a ton of evidence about education and retention of information. Typing is not the same as writing. It's just not. And yet what do we teach? Oh, all homework has to be done on the Chromebook. No paper needs to come back. And look, it's one of those for retention, patience, lack of instant gratification. It's like a whole ethos around it. So when I say ban the screens and the Chromebooks inside, I'm talking about introducing friction and learning and retention, which at this point only exists in private school, which I'm personally very against. Like I don't, I'm not saying we shouldn't have the option. I'm saying for me personally, I don't believe in private school, like literally in terms of my own family a. Because I think it's kind of antithetical to a social project. But more so. More what I'm saying is what it means, the American project of mixing and actually getting to know a lot of different people I think is very important. I support people's right to do so. Homeschool or private school or whatever if they want to, religious school, if that's your thing. But I'm saying the way that I look at things. And that's why though I think the government policy around this is so vital and important. Let's go to the D2. This supports your point here about technology. So American children now spend a massive amount of time on Internet enabled devices. And this is the best part. All families, it's all the way up. What you also see though is families who say they are low tech and prioritize out outdoor play. Not all that different than the families who say they encourage engagement with technology. There's a gap, but it's not that big. The point is, is that based on the reports of parents, 40,000 children reported by 24,000 parents that adults have may have reported children as using multiple devices simultaneously. It shows the weekly combined hours that a child use any Internet enabled device that has steadily climbed up with their age that ultimately culminates in some 19 hours per week that a child is on an Internet enabled device. And I think that points out the. Even if you're one of the conscientious people that you're really just not that far off from even the people who are like, oh yeah, whatever, you can use an iPad. So when I said you have to be crazy, like I really mean it, like you have to be nuts. And you can also see this in terms of broader culture. Go to the next one. This is another fascinating one. You could tell me more about this. Because your kids are older, American children are not allowed to go many places. The percent of children at each age allowed to walk, bike or drive given distance without an adult accompanying them, according to each parent. So what you see is that there has been a dramatic decrease of the ability for children to not go to many places, cannot leave the house, cannot leave the street, cannot leave the yard and cannot leave the neighborhood. And that obviously children become more independent as they get older, but the age at which they're allowed to like go and to be able to do things is steadily climbed. Some of this is probably, you know, there's all this talk about anxious generation. A lot of this might be, you know, surveillance, like with technology. Just because people literally know like where you're going with. What's that app called that all these families are using, like Life Life360. I think that's what it is. It's like a tracker, which I get, you know, but in general, the lack of independence of the story you're talking about with board games, critical thinking. I just think a lot of these formative experiences have dramatically declined over the last 20 years or so. Even just compared to my childhood, which was already pretty embedded in the television culture, which was already dramatically different. There are trade offs. It's a value neutral phenomenon. But you have to observe it and say, what's the impact here on the education system?

[Saagar Enjeti]

Yeah, you know, I think I'm just thinking this through in real time about the increased like protection, about what you're allowed to do. So I'll just say my 9 year old, she's certainly allowed onto the house. She's. But, but if she was gonna go, I'm uncomfortable with her just like going around the neighborhood by herself, you know, at 9 years old. And I'm worried about cars. You know, people don't pay attention. Right. That's what I am fearful of. My 12 year old is allowed to go around the neighborhood by himself. You know, I want him to tell me before he leaves. But you know, when he's got his phone with him. That's another thing is the 9 year old doesn't have a phone. The 12 year old does have a phone. So that's a difference as well. So that's, you know, the balance that I struck when I was, When I was 9, 10, I was allowed, I lived in a much larger neighborhood and I was allowed to go anywhere on my bike at any time. And so I know that it's different and I'm not sure why there's a different level of comfort for me. And by the way, if my mom was watching my kids, like she's putting even more limitations on them than I am, even though she raised me in a much more permissive way. So something about the culture and the mentality has changed. I think part of it is that there is just people have fewer kids and so there's a lot more invested in these, like fewer numbers of kids that people have. And you see that in everything. You see that in the number of activities and the amount of time that people spend. Even as women have entered the workforce in large numbers at this point, women spend more time spending time playing games with teaching their kids than they did in previous generations. So there's just like a lot invested in them. So it makes the stakes really high of like, I don't want anything to happen to them. So I think there also was a shift with like the crime wave panics of the 80s and 90s too. There was a lot of emphasis on local news about, you know, this kid getting kidnapped out of the blue. And I think that led to a lot more protective parenting as well. So it's lot a whole, whole host of reasons why we've had this shift. But you know, I try to push my own comfort zone with, you know, my kids doing things that are a little bit risky even. Cause I think it's important for kids to be able to manage their own risk levels without always having a parent jumping, don't do that, it's not safe, blah, blah, blah. But there's no doubt that I raise my kids in a more restrictive way than I myself was raised.

[Krystal Ball]

Yeah, but you're already probably still out of step because most of these helicopter parents around, like where I live and others, nobody's gonna leave the house probably till like 13, 14 in terms of neighborhood. Yeah.

[Saagar Enjeti]

I mean, granted I live in a rural area, so it's a little different.

[Krystal Ball]

See, this is why where you live matters. It really does.

[Saagar Enjeti]

I will tell you Some of the parents that do the best job of this are like New York City. Because I know New York City parents where you know, if you're, you're a teenager, you're riding the bus in the subway around the city, you're going to school on your own on public transit from the time you're certainly in high school, even middle school. And there I feel like there's a lot more independence baked into that culture. Yeah. That culture than there is in most of American life.

[Krystal Ball]

Makes sense. Yeah. I remember I would like when you meet like an 18 year old New York kid, you're like, you're like 30 dude.

[Saagar Enjeti]

Yeah. So much more. Yeah. Together and like self sufficient than your average human.

[Krystal Ball]

There's a few other elements here. Oh yeah. We wanted to put this up here. D6. We're always keeping an eye on other countries. What are they doing? This is an interesting one out of Israel. Benjamin Netanyahu. We're speaking of different systems. Their system. They have unveiled a sweeping summer AI initiative where students will be trained in GPT, cloud tech and more before matriculation exams, while also closing wartime gaps. The Education minister says over a billion shekels will be invested with July counted as a full but optional school month. And Bezel Smotrich is framing it as freeing parents to work while delivering real learning, not babysitting. Calling it so it's like a national Vision 2040 system where all of Israel's future will be shaped through AI and training in GPT. Not really what I would wanna sign my kids up for.

[Saagar Enjeti]

Sounds appropriately dystopian for that country.

[Krystal Ball]

Yep. And then in terms of hours, there was this great bit from Tim Dillon. Let's put this here on the screen. You may have missed it. Melania Trump doing this event at the White House with the Queen Consort Camilla where children are all donning VR headsets for quote AI powered cross cultural educational program.

[Saagar Enjeti]

So frigging dystopian. Melania has been on this weird like wanting to put AI in the school systems and like this is her thing this time around and I. Yeah. I don't know. No, thanks.

[Krystal Ball]

Nope.

[Saagar Enjeti]

Good on that. Thanks.

[Krystal Ball]

Thank you. I'm exiting. That's that. Those are the. If those start showing up in public schools, that's where I'm gonna go private. That's why we need the ability.

[Saagar Enjeti]

There is a line.

[Krystal Ball]

If we need to.

[Saagar Enjeti]

There is a line.

[Krystal Ball]

That's my line for sure. Oh, you start. Put GPT in a five year old's face. No, no, no, no, no. All right, now Continuing on this vein, we've got great guest standing by, Zach Exley. Let's get to him.

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[Saagar Enjeti]

So as you guys know, we've been covering the development of AI and some of the local opposition to AI extensively on this show. Joining us now to talk more about a new vision for how we should think about the development of AI is Zack Exley. He's a former senior advisor to Bernie Sanders, co founder of the Justice Dems, alongside my own husband, Kyle Kalinsky, and founder of the new consensus think tank. Welcome, Zach. Great to have you.

[Krystal Ball]

Good to see you.

[Zach Exley]

Thank you. It's really exciting to be here, you guys. I have to say, you guys are really the one place where progressive populists are doing it right.

[Saagar Enjeti]

Oh, thank you.

[Zach Exley]

And yeah, I mean, you've got this amazing combination of viewpoints and I really think the right perspective that is going to serve us going into the decades as of the rest of our lives. So I'm really grateful for what you're doing here.

[Saagar Enjeti]

It's our pleasure. Thank you very much for that. It means a lot coming from you. And you've been doing a lot of work on AI. I wanna broaden out in just a moment, but first I wanted to talk a little bit about the immediate bipartisan backlash that is really building into sort of a grassroots movement against data centers being located in local areas. And the bipartisan nature of this was on display in a recent Tucker Carlson debate with Kevin o', Leary, who is behind this massive data center build out project in Utah. Tucker challenges him quite aggressively on that. Let's go ahead and take a listen.

[Interviewer (Tucker Carlson)]

I would think since you disagree with the Chinese way of life, which is pretty civilized in a lot of ways, but the one way in which it's barbaric is that it grants its citizens no real rights. And so I would think that you would be very worried about aping their system, which we are now doing. Like they have total surveillance. It's a panopticon in China. We should create our own. Let's take 40,000 acres in Utah and make it possible for the government to know where you are at all times and what you're thinking. Listening to you on your phone, like we have that

[Kevin O'Leary]

you have to choose the less of two evils in your scenario. And I'm telling you what you should do is say, I want Kevin o' Leary to succeed. I want him to beat the Chinese in compute power and then use the laws of the United States to make sure that you keep that compute power in check whichever way you want.

[Krystal Ball]

But.

[Kevin O'Leary]

But to not have it available to put down my shovel. I don't think people want me to do that. Even the people in box elder, the majority of them want me to hold my shovel and start digging. And that's basically the debate we're having.

[Interviewer (Tucker Carlson)]

How do you know that. That the majority of them.

[Kevin O'Leary]

Because they voted for it unanimously before the Chinese guys.

[Interviewer (Tucker Carlson)]

There was a referendum.

[Kevin O'Leary]

Like all this crap that's being spewed up.

[Interviewer (Tucker Carlson)]

Hold on.

[Saagar Enjeti]

Yeah.

[Interviewer (Tucker Carlson)]

And I may have fallen for some of it. So you correct me. There was a referendum among citizens or did some like county board vote.

[Kevin O'Leary]

We actually went through the whole process that you have to do by their laws and were granted three to zero. The commissioners of the county said we want to.

[Interviewer (Tucker Carlson)]

Three people voted. The people of the county elected officials.

[Kevin O'Leary]

That's how you do it.

[Interviewer (Tucker Carlson)]

How hard is it for Kevin o' Leary and Amazon and Microsoft and Google to subvert three county commissioners in rural Utah?

[Kevin O'Leary]

They wanted. They asked us to come. They asked us to bring $15 billion. They asked and they voted. And they. It was a 3 to 0 vote. That's how it.

[Zach Exley]

Had fun.

[Interviewer (Tucker Carlson)]

Google and Kevin O' Leary got three county commissioners in rural Utah on their side. Good work.

[Saagar Enjeti]

And just to add some numbers to the level of opposition that has grown to the development of these data centers locally could put F3 up on the SCRE recent poll that found 7 out of 10Americans said they would oppose a data center being built near them. Opposition is so intense that more Americans would rather live near a nuclear power plant than a data center. That's music to Sager's ears on that one. But in any case, Zach, I mean, this is relatively recent. Previously there was a lot more openness. People have drawn this kind of line in the sand around data centers specifically because it is the pressure point they have. It's the one place where they have some control potentially over what development looks like and what gets built in their own neighborhoods.

[Zach Exley]

Yeah. And I think it's great that people are fighting back against data centers. It's really important because they're harming communities. They're in all kinds of ways. They're raising utility bills at a time when they're already incredibly high. And also there's an aspect of the Luddites who threw their wooden shoes in the machines to just destroy the machines that were displacing them. Like, there's. There's an aspect of people seeing that AI is going to take away their livelihoods. And so, you know, there's a bit of a just like, let's fight it wherever we can fight it, you know, aspect to that, which I think is fine. It's. And it's good and people should be doing it we should be doing it as much as we can, but it's not a solution to the whole problem of AI. This is really something that is going to completely transform, transform our world, our way of life, whether we like it or not, no matter what we do. And I think that progressives, especially progressives and lefties, like, have a hard time seeing that, because I think there's this instinctive. This is a new product that these billionaires are pushing on us. It's just like social media. It's all over again. It's this new thing that we don't have any control over. That's all components completely true, but it's also something completely different than that. And it's an emergent phenomena in our universe where human intelligence is spilling out of humanity into these data centers. And even if we stop all of the data centers, the way the technology is advancing, you're going to be able to run amazing AI on your phone in another few years. Like, there's just. There's no stopping this phenomenon of our intelligence. You know, this last skill that humans had that made that, you know, that machines couldn't do, these skills, these abilities are just pouring into the physical world, into silicon. And. And so we're. I don't. I don't think there's any way to stop it. But the good news is that we are still a part of the process of this stuff being built. We're still a part of this technological explosion. And as long as we're a part of it, maybe just for another few years, we can change course and we can turn it into something that really benefits us.

[Krystal Ball]

Yeah. Zach, let's put F2 up here on the screen. Continuing on this data center project around Lake Tahoe, you could see that nearly 50,000 have been told their utility will stop providing power because it's redirecting that power to data centers. Nevada Energy has supplied most of Lake Tahoe's electricity for decades, says next year it will stop servicing homes in the area and instead direct that electricity to the growing demand of Nevada data centers. So how is it, though, that you can see this happen in not only in a US State, but have the consumers and the citizens have no even say over something like this?

[Zach Exley]

Well, I mean, that's how our economic system works. We, we here in the US People all over the world, we've got very little say over what's happening to us economically. You know, we've been. Just to pick a random example, you know, we've been exporting our waste, you know, including all Kinds of toxic waste to poor countries all over the world and, you know, just killing tons and tons of people and making millions of people sick. Nobody even talks about that. You know, there's a million other things like that. This is just in the news now because I think, because people can see that it's actually much bigger than our utility bills going up. This really is something that's going to eliminate work for just about everybody. And the incredible thing, and this is really what we've got to refocus to because this data center stuff is, yes, we have to fight it, but it's like really kind of a distraction if we're not really keeping our eye on the really big consequence, which is that really in just a matter of a few years, everybody, like, if you could do your job in the pandemic on your computer, if you can do your job remotely now, your job is going to be done by AI, right? And people, you know, people still haven't accepted this. They're still coming up with explanations about why this isn't going to happen. And I don't know if you guys would like to get into that now. It's a difficult conversation to have because, you know, there's just, there's so many completely new things about this that, that we're having a hard time getting our heads around.

[Saagar Enjeti]

Yeah, I do want to talk a little bit more about that first. Let's put F1 up on the screen. This is some of your work at New Consensus. You've got a provocative headline here, which is, you say why Capitalism Can't Survive AI. And you get into the details of why this is different from the Industrial revolution, let's say, or you know, some of the past transitions that people point to of like, oh, this technological advance. There was all sorts of naysaying and doom and gloom around it, but ultimately created more jobs than it destroyed. You've got some details about how you think the collapse is going to happen and then you have ideas about what we need to do. So let me start here playing devil's advocate for the idea that it is going to be this transformative, because I think you're right. I see a lot of progressives and people more broadly on the left who see this all as like marketing gimmicks are like, yeah, sure, these people are selling you this bill of goods that they're going to replace all of labor. The reason they're saying that is because to justify their valuations, they have to claim that this technology is going to be hyper productive and be able to replace all sorts of human beings. That's where the value comes in for the companies that they're trying to sell this to and in the minds of the shareholders and the investors that they are trying to promote to. So what is your response? Why are you so confident that this is going to be something other than a basically glorified Google search? How it's going to be this truly transformative technology, unlike something we've seen in the past?

[Zach Exley]

Yeah, and that's one of the questions. Is it really going to be smart enough and capable enough to replace humans? And let's just start with that. First of all, it is replacing a lot of humans in a lot of knowledge jobs. You know, what's happening in software development is just absolutely incredible. But there's still some limitations to these AI agents and the kind of AI that people are using to really try to do jobs. There's still some limitations that are preventing them from replacing tons and tons of employees. But those limitations are really mundane. They're not at the level of science or real advanced software development. It's stuff like just wiring the AI to a memory. The memories are really bad right now, but there's like a thousand companies and thousands of open source developers all working to build memory systems. And it's such simple stuff. Really. People who aren't even software developers are building some of these systems because it's really just creating ways for the AI to make notes to itself. And if you get into studying how the brain works, you realize that that's really how our brain works too. We're not fully conscious and aware of everything all at the same time. Our brain has intelligence built into all these circuits and it has memories and it goes and fetches those memories as it needs it. So the last pieces, the other really mundane piece that AI needs that's holding it back right now, now is just access to your keyboard and your screen. Right. And it's funny, like I do a ton of work with AI, all kinds of software projects and research. We use it at new consensus and you know, that leads a lot of people to yell at me online whenever, whenever they hear me say that. But it's, you know, I'm using it so that I can really know how this actually works. And it really is like working with a human being. It's just really, you know, and it's the capacity that it has for the work that I do with it is just incredible. Like, I have managed teams of software developers before on multimillion dollar projects. And this one AI for $100 a month can do the work of a team of 10 people. Projects that would have taken a year or just would have been plain impossible. I can now do with it in days, right? But also on the research front, it's incredible and I mean, I'd love to tell you all about it, but it's really incredible, incredible what it can do, but it's like working with a human being. But it's funny. And actually the agent I work with and I, we actually joke around about this, that it can, you know, it can solve these huge, incredible problems. You know, it can tell me stuff about any corner of human history because I've loaded thousands and thousands of books and sources into it, and yet it cannot click on the submit button button on a website on my screen, right? But that problem is going to be solved, right? So when I try to get it to go buy a plane ticket for me, it just can't do it. But that problem is going to be solved with some really mundane tools. Like I'm sure you've heard about openclaw. There was a lot of hype around that. And that was a new product that an open source developer on his own with no money just wired together that basically gave the AI the ability to see some stuff that it couldn't see before. But then of course OpenAI hired him and all progress stopped there. But it's okay. There's thousands of other people out there that are doing that wiring. So the thing that's going to happen which is going to change everything is that in a couple years or maybe a few years, these problems are going to be solved and an AI is going to appear in your Google Meet at your team meeting at work, and it's going to be fully capable of doing anything that a human can do, anything that anybody on your team can do. But it's going to be, the reality is it's going to be smarter and better and faster and it's going to it. This one being is going to be working with everybody all across the company, all at the same time. So how long is it going to take until that being can just do all of the work of the company of, you know, all of the work of everybody that does their jobs on computers. And so the next step is the CEO is just going to talk to that AI and realize, hey, we don't need the people anymore. And then guess what's going to happen next? The board of directors is going to talk to the AI and realize, we don't need that CEO. Anymore. But the changes are going to be so much bigger than that because when this starts to happen, like entire industries don't make sense anymore. Like management consulting, you know, financial management, money management, insurance. There's, you know, all these industries just don't make sense anymore because everybody will be able to do everything for themselves. Like no company will ever hire McKinsey to run the same AI to answer questions that they can run themselves, you know.

[Saagar Enjeti]

Well, and this really gets to your thesis that capitalism as it is structured now cannot handle these changes. Can you lay down why you think it will lead to a sort of, of collapse? What will be the mechanisms? What will that look like?

[Zach Exley]

Yeah, and this is hard because capitalism has run so smoothly for so long, like ever since the World War II basically that I mean, you know, I know there have been booms and busts. Yeah. But if you actually look at how capitalism used to work right before the Great Depression, you know, all through the 1800s, like there was a Great Depression every day, decade. And they were way more severe than the Great Depression in a lot of ways. Huge chunks of the population starving because the entire capitalist system just shut down. And all of those crashes, just like the Great Depression were basically caused by overproduction machines getting really efficient, producing tons and tons of stuff. The financial bubbles are mixed in. So you have financial bubbles around whatever new technology is out there. Is this sounding familiar?

[Saagar Enjeti]

Sure.

[Zach Exley]

But you know, and so the thing that we forgot, you know, we haven't experienced this with capitalism. A moment when capitalism runs out of customers, Right. And like the same way that an animal needs oxygen to breathe, capitalism needs customers. And it's so basic and simple. Like it's such a stupid thing to say, but it's, but it's absolutely true and it's inescapable. And so this is what has basically caused long periods of unemployment and economic catastrophe in the past. When capitalism builds out too much stuff in a bubble and then they realize it was all silly and there's not enough people to buy. People don't have the money to buy this stuff, so they start laying people off. Well, it's a self fulfilling cycle, Right. Everybody needs to understand this because this is what's going to be happening. There's, it's called a demand doom loop. You know, it's a demand, it's a self reinforcing demand, downward spiral. Right. So there's, people have less money to buy stuff, so that creates less demand. So companies lay people off, which lowers, you know, which lowers demand even more. We've Stopped that, you know, since World War II, by jumping in, the government jumps in and just gives everybody money. And then capitalism gets back on its feet. This has worked for a few centuries now. Well, even without the bailouts, capitalism has eventually started investing again and employing people again. Because it's true what they say, that new technology creates new kinds of products and new kinds of services, which means new companies, which means new jobs. So people got automated off the farms into the factories, and then they got automated out of the factories into offices. And capitalism's, you know, amazing trick is that it can just limitlessly create new products and services, which keeps everybody employed and keeps the system expanding. There's a big problem now with AI because now AI is going to be able to do everything that a person can do at their computer, right? And there's a lot of other jobs that are going to get automated, too, that are getting automated in factories, in cars, obviously, and in all kinds of other parts of the economy. But it can do everything that humans can do with their brains. It will be able to very shortly. And so that means that this wave of automation is like when the horse got automated out of a job. And I think Ryan actually brought this up, or somebody on your show brought this up weeks ago, and this is absolutely true. And it's a great analogy because once you put. Once you connected an engine to wheels and some other contraptions, there was nothing that horses could do that machines could not do better. So obviously, people who like horses are going to have horses around. Horses can race. Okay? As humans, we're still going to have value to each other, but we are not going to have value as workers for capitalism. And that means they're going to lay us all off. That means no customers. And then that means capitalism seizes up and really cannot function anymore. And so we're going to have to choose what comes next. Whether you're a fan of capitalism or hate capitalism, we're all going to have to build a new economic system in the wake of this transition.

[Saagar Enjeti]

One question I have for you, Zach, is just to push on that thesis. Already so much of the consumer economy is dominated by the spending of the wealthy. Do they actually need us all? Like, is most of the population sort of irrelevant now to the functioning of capitalism, the functioning of our system at this point?

[Zach Exley]

Well, yeah, more than half of our consumption is done by the top 20% of our population. Those are the first people who are going to get laid off. Off with the AI collapse. Right? And so that, you know, so that is really going to create an incredible economic crisis because demand is really, really going to tank. Yeah, but I, but I think you're getting at this other idea too, which is, you know, like we have this idea that, that, you know, the people that own these companies and the top elites, the people that are financing all of this, they're just going to get wildly rich off of this. Like I already said, I don't think that that's actually going to happen because they need customers to get rich. They need the economy to actually function, to get rich. But let's do a little thought experiment. These people own the economy, right? They own means of production. They've all got their bunkers in New Zealand, right? So maybe hypothetically this is true. They could move to New Zealand, they could move some factories there, they could build their own data centers so that the AI can manage their little economy for them. And so you can imagine that, that the people that own the economy today could say, screw all these people. We just want everybody to starve and we're going to go build our own economy on an island somewhere. So first of all, that's not capitalism anymore, which is something interesting to observe. What you're talking about there is the rich building a little socialist economy for themselves. This has actually happened before. Look at the history of South Africa. The whites in South Africa got together and built themselves their own socialist utopian economy on the backs of everybody else. So it's not that weird of an idea, actually. But we should say that is absolutely absurd. We need to have a political movement and I believe we're going to, going into 2028 with the presidential campaign. We need to have a movement that says, screw you guys. That is because you can go to New Zealand, but you're not taking our means of production that we have all built together and we're going to see all these data centers going out of business. We're going to see the AI companies going out of business. And that's not just because there's not going to be customers. It's because their business models are just fundamentally ridiculous. They're not monopoly products, they're just commodities. And that's why these valuations don't make sense.

[Krystal Ball]

Sense.

[Zach Exley]

But when all this stuff is going out of business and we have planned for this on new consensus and it's, we have to con, we have to not just let all this stuff be sold off for parts. We, we need to not do government bailouts of this totally failed business model. We need to take possession of this stuff. And you know, I'm not even talking about. Don't worry, Sagar. I'm not even talking about expropriation here. This stuff is going to. These are going to be worthless.

[Krystal Ball]

I don't know why you thought. And I opposed to that.

[Zach Exley]

Okay. Okay, Sorry.

[Saagar Enjeti]

Yeah, go ahead.

[Krystal Ball]

Well, you know, that's basically what I want.

[Zach Exley]

Okay, good. Yeah, so we're, we're, you know, we. We need to take possession of this stuff and, you know, we can just buy it up as it's going out of business. You know, it's. In 2009, there was a guy in the Brazilian government, in Lula's government government, who actually proposed like, let's buy all of the Wall street banks because they were all less worth and less than a billion each. Right. And, you know, so we're. We could do that, right, in this moment of collapse. And I'm not saying I'm not cheering for the collapse so that we can do this. It's just that I think it's very clear that this is what's going to happen, I think in the next year or two. This is why I think it's really great for, like, we need leaders like you all to be ready for this because. Because in a year or two, it's going to start becoming clear to everybody what's happening. And, you know, and we're going to have a stage of presidential candidates running for the Democratic nomination, and some of them are going to be completely clueless and some of them are going to see, you know, what. How drastic the change is going to be, and they're going to be up to the challenge of talking about what comes next. And I think we might be surprised about, like, I really have no idea who's going to get it and who's not, you know, so.

[Saagar Enjeti]

Well, Zach, I think it's extremely important, the work that you're doing. And, you know, I think there has not been outside of your work enough thought put into. Okay, well, yes, we don't like the oligarchs, but what are we going to do and what is this all going to look like? So I really encourage people to go and read the report that we put up earlier. I'm gonna put the link in the description so that people can find it easily. And I hope you'll come back and talk to us some more. It's been great talking to you today.

[Krystal Ball]

That's very provocative. I got to think about it more. That's why I'm just sitting here.

[Zach Exley]

Absolutely. Thanks for having me on.

[Saagar Enjeti]

It's our Pleasure, Zach. Thank you.

[Krystal Ball]

Thank you. Thank you guys so much for watching. We appreciate it. We'll see you all tomorrow.

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