← Breaking Points with Krystal and Saagar
Breaking Points with Krystal and Saagar
5/19/26: Trump $1.8 Billion Slush Fund For Allies, Students Boo AI At Graduation, Kars4Kids Scandal Erupts
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- [00:00]
Krystal Ball
This is an iHeart podcast. Guaranteed Human
- [00:06]
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- [00:29]
Krystal Ball
Visit your nearby Lowe's.
- [00:35]
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What's up, y'?
- [00:35]
Krystal Ball
All?
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- [01:54]
Saagar Enjeti
Sagar and Crystal here.
- [01:55]
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.
- [02:03]
Saagar 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.
- [02:08]
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.
- [02:19]
Saagar Enjeti
We need your help to build the future of independent news media and we hope to see you@breakingpoints.com turning now to the slush fund. This one's getting a lot of attention. Let's put it up here on the screen now. The details are a little convoluted. So everybody stick with me. Donald Trump has basically been in a decade long fight with the the IRS. Yesterday he decided to drop this $10 billion lawsuit against the IRS over the leak of his tax returns. In exchange, a part of that settlement will create something called an anti weaponization fund of $1.776 billion 1776 to celebrate the founding of the American Revolution. Now that anti weaponization fund will allow people who believe they were targeted for prosecution for political pur, including by the Biden administration, to apply for payouts, creating a quote, lawful process for victims of lawfare and weaponization to be heard and to seek redress. The machinery of government, they says, should not be weaponized against any American. It is this department's intention to make this right the wrongs that were previously done while ensuring this never happens again. Now, there are a lot of very interesting things about this slush fund, if you will. It literally creates a fund of taxpayer dollars. These taxpayer dollars can be dispersed at the explicit, basically at the explicit instruction of the Department of Justice based upon their own review. Every previous compensation fund that has ever been set up by the United States and I actually went back and checked, or at the very least, similar types of funds like this are created by Congress. So for example, the 911 Victims Compensation Fund or you know, there's a lot of different ways and mechanisms that you can create this. There are also lawsuits. There's a different process where let's say you or I were improperly treated by the Feds, we can sue the federal government and then a judge and others will decide potentially in some sort of a settlement between those two. This preemptively creates the fund, inviting these so called like victims at the discretion of the Department of Justice to be able to release them. And look, we all know at this point, like this is going to be created for the benefit of the people who are on Donald Trump's side, either not just from January 6th, but a lot of his other allies who have faced either political prosecution by the previous administration or even prior to that by Robert Mueller and others. So this is crazier than honestly anything that he's ever done. And I know that may sound crazy because they're like, but what about the trading and Palantir? I'm like, look, all of that is fair, absolutely fair. But there's a plausible explanation. It is a very or even government contracts, technically a service is being provided, right? This is literally just cutting checks out from the US treasury, like United States of America.
- [05:17]
Krystal Ball
Yes, yes, taxpayer expense.
- [05:18]
Saagar Enjeti
It's a very different thing.
- [05:20]
Krystal Ball
The insider trading potential that we talked about yesterday, which is insane, to the tune of hundreds of millions of dollars. You know, that's not coming directly out of the taxpayer's pocket. It's incredibly destructive to the social fabric. It's illegal if it was, in fact, insider trading as it appears on its face. But here we're talking about direct theft of $1.8 billion of taxpayer money to dole out to your friends and allies as you see fit. It's crazy. And I mean, one minor correction on what you said, though. This lawsuit doesn't go back decades. This was something they filed last year against the irs.
- [05:58]
Saagar Enjeti
Right. He has two different lawsuits.
- [06:00]
Krystal Ball
So this one, this was filed just actually, sorry, not even last year, earlier this year based on this previous leak of his tax returns. So just think about that. To begin with, the president of the United States is suing his own government, expecting the taxpayers to pay out some sort of settlement to him for his alleged wrong. That was crazy to begin with. Now, there's a reason why they never let this thing go to court, because very likely a judge was going to look at this and throw it right out. So instead of going to court, now he has created this, quote, unquote, settlement again with his own government, which he runs as his personal kingdom, obviously, to create this $1.8 billion fund to dole out as he sees fit. Now, what sort of incentive does this create? Right, for the people who stormed the Capitol on January 6, some of whom just, quote, unquote, trespassed and some of whom committed violent acts, all of whom had their sentences commuted and were pardoned by Trump. Now, they have been rewarded for that activity. And that's the message that comes out from this, is first of all, that he uses the federal government, his own personal piggy bank, to reward his friends and allies. And second of all, not only will there be no legal consequences for you breaking the law, beating up police officers in service of President Trump, you're going to be financially rewarded for it. Think about the financial, the incentives that that creates. It's truly, truly mind blowing. And let's also talk about, okay, so who are some of the people who could get these bans? It's really anyone he feels like. Put C3 up on the screen. This is Ron Filipkowski, put together this list. Thinking about Steve Bannon, Peter Navarro, Rudy Giuliani, Mark Meadows, Stuart Rhodes, Enrique Tarrio, Sidney Powell, Jenna Ellis, John Eastman. These were key figures in Stop the Steal. Jeffrey Clark, another One, Boris Epstein, Joe Biggs. I don't remember who that is. And Walt Natta, but any of the January 6th people. We could put C4 up on the screen. Just as a reminder of the personal character of some of these pardoned insurrectionists. At least 33 of them have faced other criminal charges. A number of them have been charged with driving under the influence. And in four cases, they allegedly reoffended after receiving their pardons from Trump. One was charged with a felony for threatening to murder Hakeem Jeffries. Another was convicted in June for violating a peace order by following the mother of his child in violation of a court order. Two were charged in May with burglary, breaking and entering. Others had interactions with law enforcement that highlight the dangers posed by Trump's decision to grant them clemency. One was killed during a traffic stop when he reportedly resisted arrest and was armed. Another fired on police when they arrested him. And I believe there were, yes, six of the pardon January 6th insurrectionists were charged with committing child sex crimes ranging from sexual assault to possession of child pornography. At least five were charged with illegal possession of weapons, including at least two who had a previous domestic violence conviction. These are the sorts of characters that Trump already pardoned and who would now be eligible for a financial reward for their actions on that day. So it is so disgusting and depraved and deleterious to the fabric of a society that you can scarcely wrap your head around.
- [09:16]
Saagar Enjeti
I would say that it's very simple to. Because, look, a lot of Republicans and others, they're upset about the way some of the Jan Sixers were treated. I think it's fair. I mean, a lot of the prosecutions were extremely overzealous in some of the things that they did. Or the QAnon guy, he was hit with some ridiculous number of. The shaman was hit with some ridiculous number of time. That's honestly a completely different argument outside of pardoning. And even in terms of their ability, let's say if they need to seek redress, which they easily could, you know, through the legal system, it's a totally different one to create some sort of a slush fund. And honestly, it, you know, amplifies a lot of the same stuff that they get furious about whenever we're talking about fraud or checks that are getting cut out, you know, from the government. And look, I mean, let's not deny, like, this is a long held thing that a lot of government, a lot of people have wanted to do in the past for, like, sympathetic victims, but here they're Just like, oh yeah, we're going to do it, right? Like, we're just going to create this fund for people we believe have been unjustly prosecuted. And it's like, okay, I mean, in terms of like a lot of these Jan6 people who were pardoned, I honestly don't even disagree with a lot of the pardons, considering how far they went and especially considering how a lot of people who rioted in 2020 were not prosecuted literally whatsoever. However, to cut them checks from the feds and then is what is gonna stop, you know, some future Democratic administration from saying the same, from compensating James Comey, you know, for being prosecuted now for this eight. That's why we don't have things like this. And it should be set up by Congress. I mean, I'm sure it will face an immense amount of legal scrutiny on the IRS front. The only thing I get confused about is he previously had also sued the IRS whenever he was getting audited, if you'll recall, in 2016, which is why that one goes back a decade or so. But the truth is, is that this is one where originally also I'm sure you've seen, they didn't even necessarily want this so called weaponization fund. He had wanted to be, you know, personally compensated. Compensated. Whenever they decided that that one probably wasn't gonna be able to work out. This seemed to be like the so called compromise. I actually do think out of all of the things Trump has done, this will be the one which is going to get much more legal scrutiny in the future than anything. There is just something fundamentally different about cutting a U.S. treasury check at the total discretion of the President and or of his Attorney General to somebody with no real process created taxpayer dollars effectively by fiat power with no congressional oversight. This is the one that I actually do think will genuinely be a serious problem in the future. Well, and a lot of people think I'm like being exaggerated. Yeah, this one really is different. It's different. And I think it's important to recognize that.
- [11:59]
Krystal Ball
Well, and you're about to have Democrats have some power in the House and potentially also the Senate. I think very likely at this point that they're going to take both the House and the Senate and, you know, so can't prosecute, but they can start building the case. They can do all the investigations, they can subpoena, they can dig into. Okay, how is this process playing out? Who are these people, how are they being selected, et cetera. So there may be some movement on that quickly. We'll See, but just one more piece here because this is significant. This administration has been the most anti law and order administrators you can imagine when it comes to white collar crime and their own, of course, criminality. So you now have U.S. prosecutors dropping these fraud charges against an Indian billionaire, one of the richest people on the planet, Gautam Adani. And these were fraud charges that were, you know, the initial prosecution was under the Biden administration. Essentially the allegations are that there were hundreds of millions of dollars of bribes that were paid in order to secure deals within India. Now you might say, okay, well, that was India. What does that have to do with us? Well, US Investors were misled on the basis of the presentation, denying these alleged bribes, et cetera. So because you have the nexus of misleading US Investors about this company, that's why the US has jurisdiction here or claim to have jurisdiction here. So Trump, of course, immediately Adani, once Trump gets elected, he's congratulating, oh, you're such an incredible leader. You're gonna do such great things, blah, blah, blah. I believe he hired a lawyer that's close in with the Trump family. And he played the whole game. And they all know how. I mean, it's a whole pay to play operation to get charges dropped or to get your pardons, et cetera, at this point. We've seen this with these, you know, these crypto guys who've been let off the hook as well. The lowest number of white collar crime prosecutions that we've seen in modern history under this administration. They just don't care about white collar crime. They have defenestrated the regulatory apparatus so that these, you know, oligarchs can get away with whatever they want as long as they stay on Trump's good side.
- [14:08]
Saagar Enjeti
Yeah, I didn't realize that. The other person on here is also named Sager. Sager Adnani, his nephew.
- [14:13]
Krystal Ball
Yeah. It's a little different, though.
- [14:15]
Saagar Enjeti
It is, yeah. With one a Sagar, I will say this one is even crazier because they proposed the $10 billion investment that was proposed by the government, but it wasn't cited by the DOJ when they dropped their case. So it was basically an order from the top. They say in the final weeks of the administration, the prosecutors had unsealed the indictment and the case, which along with the sec had basically been in limbo since then. I wouldn't be surprised. However, just being honest is if the Indian government had something to do with this. I don't know how much of this is also Adnani, because Adnani And Modi are like this.
- [14:53]
Krystal Ball
Yeah. And they, you know, in the recent meeting Modi got asked about and he described this as a, quote, personal matter and said, oh, we didn't talk about this, whatever whatsoever. But I wouldn't doubt also.
- [15:03]
Saagar Enjeti
Well, I don't know if Modi talked to him about it now did Indian find finance minister, bring it up or something like. So I would just. That's my only flag is this may not. This may be above like pay to play and much be much more. I mean, he's one of the richest men in all of India. He's very important to the government. So I actually think that might have probably played a bigger role. But look, it's important to flag because it's like you were saying about fraud. Now all this fraud stuff, that drives me crazy too. Okay. And I will say, you know, I do think that there is like a disparity in the way that a lot of it is covered. Like, for example, liberals tend to forgive poor people committing fraud and are obsessed with rich people committing fraud. I think both are bad. Okay. Now a lot of Republicans tend to overly focus on poor people committing fraud. And then when their rich friends are committing fraud, they're like, well, it's different. No, it's all bad. Okay. And this problem though is that by. And you know, I get it, you know, a lot of Americans feel like the deck is stacked against them and they don't have as much against like some Medicare fraudster or some whatever. What was those, PPP loan fraudster. As opposed to a multi billionaire. I totally understand. I do think both should be prosecuted to uphold the rule of law. But that's what blows a hole in their whole crusade against fraud. When they're talking about a million or a billion or something like here in California, you're setting up slush funds, you're letting off billionaires, you're reducing white collar prosecutions, you're pardoning all of these guys who commit white collar crime because they happen to hire the right lawyer out of Mar a Lago. It's like you have no standing, I think in terms of the public eye about this actual issue of fraud. And that's honestly tragic because what it does is it creates this. I think, I genuinely thought that the fraud story, not just in Minnesota, but California and all this, it is a real issue. It is. Now I'm not gonna say it's the number one biggest fiscal threat, but it's a problem if you want a well functioning social safety net, which I think you and I do People need to have confidence in said safety net. And a lot of people, if you watch some Somali guy who's not even from here, who comes over here and starts ripping you off, yeah, it makes me mad considering how much FICA that I have to pay. But it's also gonna make me mad when I see some Ponzi scheming piece of shit who gets pardoned from Trump and then go out to Ponzi scheme again after he's been let out. So I can't live in that reality of both, if that makes sense. So I don't know, I just feel like the fraud issue has become like socio cultural in a way. And instead like there are well meaning people, I think, left and right, who really would want to see a genuinely like, orderly society and things like this. Genuinely like both the Somali case and this are so utterly destructive to like any of your thought. Because every rich guy in the world right now is like, screw it, I'm not. You know, everybody knows that when you're self employed and all that, what you pay, it's not like a real formula. There's no like X times Y. Like Whenever you're a W2, you could write this off and then you're like, well, what's my audit risk? Whenever it comes to this. And a lot of it, a lot of the tax code is in the gray area. I have some friends who are actually like filthy rich. And I'd even ask them, I'd be like, hey, how do you calculate their taxes? They're like, man, it's a game. Like, it's a game. The famous Rumsfeld letter that he would say, he said, this is what I'm paying you. I have no idea whether this is correct or not because of your IRS go convoluted tax code. It shouldn't be that way. But everybody knows under this administration, that's the way that it's going. And that is really intolerable whenever poor people are having such a hard time right now.
- [18:41]
Krystal Ball
Completely, yeah. Where you're throwing the book. I mean, this was actually my legitimate criticism, I think, of the way the January 6th prosecutions went about. I think people who, I think people who committed criminal acts on that day should be prosecuted.
- [18:53]
Saagar Enjeti
Sure.
- [18:53]
Krystal Ball
But it's also gross to see like, you know, Trump, who really is responsible for the whole thing, be completely let off the hook and all of the top level players effectively be completely let off the hook. And I think it's the same thing overall when you look at like, oh, we're gonna go after these small time fraudsters. But if you're a billionaire who's got access at Mar a Lago, then forget about it. You can pillage the country and the global economy with impunity and they're gonna let you off the hook. I mean, I will say, just to quibble like, dozens of prosecutions of Somali fraudsters started under the Biden administration, many more so than under the Trump administration. So I 100% agree with your view of we should have equal application of the law.
- [19:32]
Saagar Enjeti
That's all I want.
- [19:33]
Krystal Ball
And it is important if you're going to get people to buy and believe in a large social safety net, that people feel like their money is not being pillaged and that it is being distributed fairly and people aren't, you know, gaming.
- [19:47]
Saagar Enjeti
Because I'm sure you don't feel like when I paid my taxes in April, I felt sick. Like I actually, with the war going on, I'm like, I feel ill. Well,
- [19:54]
Krystal Ball
and that has for me more to do with the war and the genocide than it does with, you know. Well, I mean, yeah, that's, that's the big thing that makes me just.
- [20:03]
Saagar Enjeti
Sure.
- [20:03]
Krystal Ball
But I mean, I know where it's going. It's going to war.
- [20:06]
Saagar Enjeti
That's fair. But I mean, I felt that way. I'm saying with the war with Iran, it's, it wasn't just like what you were talking about with Israel. I'm like, my own countrymen are being killed in this stupid war. All this money's being pissed away. 168 Iranian schoolgirls are dead and that's what this shit is paying for. And then, oh, I look, you know, I go outside my front door and some guy's doing the fentanyl lean. I'm like, great, awesome. Better not call 911. Nobody's gonna do a fucking thing about it. Like, that's the true reality, I think for a lot of people, especially, you know, we're self employed, so we literally have to pay our own taxes, which is somehow psychologically harder than whenever it's taken out of your.
- [20:43]
Krystal Ball
It's taken out.
- [20:44]
Saagar Enjeti
Yeah, yeah, it's much easier, trust me, whenever it's taken out of your W2 paycheck. But the thing is, is that for, you know, I'm sorry to derail this whole fraud combo, but I do think it's important it gets to the heart of why Doge and a lot of the Trump revolutionary spirit was popular in the first place. Which, yes, I know how it turned out, but try to remember what the Vibes and the feeling of that were like, people do feel like the government doesn't do anything for them. That experience I just laid out of your neighborhood looks like shit or there's crime and people literally don't do anything about it while our money's getting pissed away in Israel or Gaza or in Iran or Ukraine and all that. It's an enraging experience. Or whenever you pay your health, when my healthcare premium goes up by 25% or whatever and then some fraudster out there is getting free health care in an emergency room makes me mad and. But it also makes me mad when I see these Ponzi schemers who all who are doing Medicare fraud at a high level, who are become, I don't know, United States senators, Senators without impugning anybody's character, you know, or legal justification.
- [21:50]
Krystal Ball
I mean, I do think this is why Zoron's model in New York is so important, because he does take seriously the things you're talking about. They did a whole audit of the entire budget and you know, they did their own like version of doge, but also maintained the public spending on education and public libraries and the things that people genuinely benefit, collectively benefit from in the city. And you know, I think so far he has really demonstrated that level of responsiveness where people feel like, okay, you know, I'm paying in, but I'm also, I can see that there's like a care and concern about what's happening in the city. So yes, that is the type of
- [22:27]
Saagar Enjeti
governance and a lot of Nordic social welfare states with the strongest ones, they have crazy fraud departments you wouldn't even believe. Like Denmark and a lot of these countries. Like you really should study how they handle it's on immigration too. They do not fuck around in the same way that they do. So anyway, do some studying of that. I do think it's a really important issue and it's really actually gross to see it like cynically exploited. And I think what this will do will further degradate the norms and create governments of the immediate term political allies in the same way that late stage republics always do. They become basically. What did we decide on yesterday? Kleptocracies. We will basically just create new versions of kleptocracies with individual constituencies fighting over who gets to loot the treasury while they're in power.
- [23:16]
Krystal Ball
That's certainly the precedent that is being established right now. So we'll see if that continues. All right, let's talk about the rejection, mass societal rejection of AI and data
- [23:26]
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- [25:03]
Krystal Ball
First of all, a significant update in a lawsuit that Elon Musk filed against Sam Altman's Open AI. Let's go and put this up on the screen. So a federal court has rejected these claims against OpenAI, but based on a technicality, saying effectively that the statute of limitations had run, that the lawsuit had been filed too late. We've covered some of previously on the show. Basically Elon and Sam Altman with others started OpenAI with the idea that they were concerned about the direction of AI development. They wanted it to be nonprofit and they also wanted it to be open source, elon alleges, and I think with some standing here, some standing in the claims that he's making, that Sam Altman abandoned those promises, turned it, and this is clear, into a for profit entity. And also it went from being Open source to. Obviously it is no longer open source. So that's what this lawsuit is over again. Thrown out of court. But not based on the merits of the claims, based on the fact that it was filed too late. Not that I think there are really any heroes in this story. Cause Elon has just, you know, Elon's trajectory is actually very interesting. Cause originally he was very concerned about the AI development and you know, keeping it under control. And we have to make sure that this doesn't become an existential threat to humanity. And then basically after this split with Sam Altman, now he's just like, okay, well if it's off to the races, then I'm gonna be off to the races as well. I'm gonna be as like unscrupulous a, you know, a steward of AI development as anyone else, if not more so. Grok has been one of the worst in terms of just taking all of the guardrails off and you know, sort of letting a rip. So in any case, it's still not even that good. No, and it's the worst one.
- [26:41]
Saagar Enjeti
It's not even good.
- [26:42]
Krystal Ball
Yeah, I mean, he's desperate, right? It's honestly the worst one of the major model.
- [26:46]
Saagar Enjeti
What he is doing is he's doing the chip stuff. It's actually interesting not to derail this entire thing. But the chip project that they're working on is actually very interesting. The one that's backstopping the. What is it? The backstopping anthropic which is allowing them higher levels of compute. But back to the core claim, Elon was obviously correct. Like what happened with OpenAI is insane. I still have no idea how it is legal. You have a nonprofit which splits into two kind of to create a for profit trillion dollar company which will when it IPOs, create more billionaires in a single day than any time in the history of humanity. So, okay, like it was all founded. A for profit company was founded on the basis of we need open AI, quite literally so that all of humanity can benefit. And so it will be researched and done in such a way that it is not gated. It is made it so that it's open for science and for everything else. How is that humanly possible in a 10 year period that this is exactly where we have ended up? It's so ridiculously absurd because they all
- [27:44]
Krystal Ball
get into the same mentality of well, if I don't do it, then this person's gonna. Then it's gonna be Dario, then it's gonna be Zuckerberg, then it's gonna be the Chinese or whatever. And so they all get into this mentality of that's why I have to sort of abandon caution, throw caution to the wind and just develop as fast as I can and for as much money as I possibly can. And so basically they all have the same mentality. You know, I think anthropic has been the most responsible. But still, as long as this development is in the hands of a few oligarchs, this is a very dire situation for the, for America, for the world, all sorts of risks. And the public is really waking up to this, as evidenced by the fact you've had a number of commencement speakers who were booed when they brought up AI development. Now it's also sort of extraordinary that they didn't anticipate that this would be a controversial topic, to say the least, speaking to new graduates who are facing down a job market that has been degraded by the advent and continued development of AI. But in any case, we put together a little compilation here for you of some of the most noteworthy events where speakers are getting booed. And I think we're starting here with Google's Eric Schmidt. Let's go ahead and take a listen to that.
- [28:56]
Saagar Enjeti
Last December, Time magazine selected its person of the year for 2025. And it was this time it was the architects of Artificial intelligence. Interesting. It will touch every profession, every classroom, every hospital, every laboratory, every person and every relationship you have. I know what many of you are feeling about that. I can hear you. There is a fear. We do not know.
- [29:33]
Krystal Ball
The rise of artificial intelligence is the next industrial revolution. What happened?
- [29:50]
Saagar Enjeti
Okay, I struck a chord. May I finish?
- [30:02]
Krystal Ball
Only a few years ago, AI was not a factor in our lives.
- [30:16]
Saagar Enjeti
Graduates, everyone who is standing, here's what's happening. We're using a new AI system as our reader.
- [30:31]
Krystal Ball
Yeah,
- [30:33]
Saagar Enjeti
yeah. So that is, that is a lesson learned for us.
- [30:40]
Krystal Ball
So in case you didn't catch what was going on in that last one, they used a new AI system to read off graduates names and it forgot, I don't know how many. And so the ones who were still standing were the ones who never had their name called because their new AI system. Why do you need an AI system to read people's names anyway? Screwed up and failed to announce them. So they didn't get to do, you know, walk across the stage and do their whole thing because of this. But I mean, pretty wild to see the overwhelming negative response among new graduates to even the mention of AI from these people. And you can see that second woman like, very uncomfortable and giggling and like, oh, I didn't really know that this was gonna go that way.
- [31:21]
Saagar Enjeti
I loved it. I like to make them uncomfortable. The kids are all right. Look, I actually think this is an important view. So what are these kids booing? Because I can guarantee you 108% of them used ChatGPT, Claude or Gemini to help them while they were in school. Probably literally, like, I would be hard pressed to find a single one who was actually graduating college today who had not used it. So what do they think? They recognize the utility of AI. We do, too. We recognize the utility as a tool to help human accomplishment. What they do not recognize is the term industrial revolution and of the replacement rhetoric, which every One of these CEOs fundamentally believes in. And I think that is the difference. We can celebrate. Not necessarily celebrate, but we can say, wow, this technology is useful. It makes things more efficient. That does not mean that I am going to fully embrace the techno utopian vision of all the CEOs and others behind it. And that's what explains. Because I see there's so much criticism that I see every, like what I just said, every one of these kids use AI to help them graduate. I'm like, yeah, but you're not getting it, bro. They used AI to help them graduate, to have a degree and to learn. You're trying to have AI replace their need for a graduate degree at all, Period. So that's the difference. They can use the tool, but they do not want and are definitely not signing up for some sort of a revolution where it will entirely replace them and all of their human labor. And I think that's how everybody needs
- [32:58]
Krystal Ball
to square this around and where their whole future is being put in the hands of this handful of oligarchs. I mean, that's the part too, is it's like, we have not given consent. We have no say over this. This is something that is being done to us versus something that we have some sort of democratic control over. And say that, for me, is the biggest rub I can imagine a reality, a very different reality than the one we live in, where I'm just, like, excited about AI and like, oh, this could be really amazing. And I already see, you know, I tinker around with it. We've, you know, we've tinkered with it here. The things that it can already do is incredible. Not to say there aren't hallucinations and there aren't still problems to be worked out, but, you know, I would love to be in a place where I Could just be excited about this. Where I felt like human beings would be centered versus right now. These oligarchs, they're traitors to humanity. They want to. They prefer the robots. They want to replace us with robots. That's who we're up against. That's what the boos are about, is the fact that they see these oligarchs who are controlling AI as traitors to humanity as they should. Had a recent interesting comment here from. Or actually, let's do the polling first. But D3 up on the screen. This just reflects the trends that we're seeing. AI skepticism grows among us youth backlash is growing. The U.S. especially among young people. Former Google CEO Eric Schmidt was booed as he gave a university commencement. As we just showed you, polls show 70% of Americans think AI is moving too fast. Over 50% of Americans have negative views of it. You ready for this? Just 18% of young people say they feel hopeful about it. Partly they are turned off by AI's upending of the job market. Quote, every other day a new AI agent is being released in the market. Said a recent graduate of UC Davis who's applied to 500 jobs so far. Quote, what am I doing with my life? So that is, you know, I mean, it's very understandable. They're coming out into this new world. You can see that companies aren't doing mass. There are some layoffs, but companies aren't doing mass layoffs. They're just not hiring these new grads because they already see the way they're able to integrate AI to replace them, to lower the number of human beings that they need to add on. And they're richly rewarded for that by Wall Street. So it creates even more of an incentive. Even before they figured out how they can fully replace the humans, it creates even more of an incentive to adopt this technology and show they're moving in that direction.
- [35:23]
Saagar Enjeti
Yeah, the polling is really important because what they're concerned about is they see all of the rhetoric that comes from them. And also, look, I mean, the richest, most powerful people in the world are all celebrating. Not just like I celebrate, whenever it can save us a little bit of time. I'm not gonna be sitting around celebrating talking about, oh, look at its ability to replace all of this different human labor. So, for example, D4, let's take a listen. This is Ken Griffin talking about AI, one of the richest financiers in the world.
- [35:52]
Ken Griffin
Let me just share a few thoughts with you on this. Number one is, in the last few months, there has been A step change function in the productivity of the AI toolkit. It is profoundly more powerful than it was just nine months ago. And for us at Citadel, that has allowed us to unleash a much broader array of use cases for AI. And it has been really interesting to watch, to be blunt, work that we would usually do with people with Masters and PhDs in Finance over the course of weeks or months being done by AI agents over the course of hours or days. So these are not, these are not mid tier white collar jobs. These are like extraordinarily high skill jobs being, I'm going to pick a word, being automated by agency, AI. And I got to tell you, I went home one Friday actually fairly depressed by this because you could just see how this was going to have such a dramatic impact on society. And when you witness it in your own four walls, when you see work that used to be man years of work being done in days or weeks, it's like, wow. Like that's the first time I've seen real impact in our four walls.
- [37:25]
Saagar Enjeti
There you go. What's his net worth? Like 40 billion, something like that. Like whenever you earn, run one of the top finance trading desks in all of Wall Street. And he even said these are not mid tier white collar jobs. These are extraordinarily high skilled jobs. I'm going to be, pick a word, automated by agentic AI. And he said that that's what made him depressed. That is the vision, the goal and that's what people are rebelling against.
- [37:51]
Krystal Ball
Well, and it's very interesting because typically and certainly in recent times here with tech, technological innovation, it's usually young people who are most excited and embrace it first. It's usually, I mean, think about it. It's usually the older people who are like, back in my day and it wasn't like this, and these kids with their screens or whatever and young people are like, no, this is great, I'm enjoying this. And I can see what social media is gonna do for the future. Now it turns out the older people may have had a point with some of that stuff.
- [38:17]
Saagar Enjeti
Yeah, the silent gen was right about Facebook and it's time to admit it.
- [38:20]
Krystal Ball
Yeah. In any case. But normally that is the way it works. Young people are just excited about, oh, this is changing, this is new and this is, this is gonna change the world. That's positive. And older people are wanting to maintain the way things previously were when they were growing up and their understanding of the world. Here you have a total reversal where it's older Americans who Have actually less exposure to the new technology, less understanding of it, who are the most excited about it, who are the most open to it. Whereas younger people who have a deeper understanding of the technology and more use with it and see more directly its impact on the world are the ones who have the deepest reservations. I think that's very telling. I think that's actually really quite a dire sign of where things are heading. Because the very people who are most exposed to it are the ones who have the lowest opinion of it and want to put the genie back in the world.
- [39:15]
Saagar Enjeti
They're also the victims of technology. We were young enough to be naive about the promises of social. I mean, I mean, come on, there wasn't a little part of you that was tingling around the Arab spring rhetoric in 2011?
- [39:28]
Krystal Ball
Of course there was.
- [39:29]
Saagar Enjeti
You gotta be honest, I was in college. Yeah, I have Egyptian friends. They're crying about their families finally free and Twitter. I believed it, man, I really did.
- [39:39]
Krystal Ball
Yeah.
- [39:39]
Saagar Enjeti
When I got that iPhone4, I was like, this fucker's gonna change the world.
- [39:42]
Krystal Ball
Oh, this is gonna be a new day for democracy. And people are gonna have input, you know, I mean, in this. It could have gone that way too, by the way. There was a possibility that it could have gone that way, but I mean, I don't know, maybe, but there was. You know, the early days of the Internet were much more open and much more grassroots versus it became much more controlled and much more top down, algorithmically driven, et cetera. But yeah, you're right about that. Now they've seen the wreckage of the promise, previous promises of the technological development. And so there is a wariness there to begin with. And then you add to that the fact that they're looking, they're thinking about college. I mean, my daughter literally graduates today. Congratulations. But you know, they're looking at college thinking about what to study or what job to try to take up. And it's impossible to know.
- [40:31]
Saagar Enjeti
That's the toughest question.
- [40:32]
Krystal Ball
It's impossible to know, what should I study?
- [40:33]
Saagar Enjeti
I'm like, dude, I don't know.
- [40:34]
Krystal Ball
Nobody knows.
- [40:35]
Saagar Enjeti
I really don't know. You know, it would be easy to be like, oh, learn a trade. But they're like, what if I don't want to? You know, what I usually say is, learn how to read and learn how to think. I know it's a total cop out answer, but I'm like, at the very least, that one will not be automated, hopefully anytime soon. If you learn how to think, how to study decision making, and the various different approaches that people have, then that will hopefully put you in a good position whenever it comes time to make big decisions in your own life. That's genuinely all I can give you. I can't give you coding or accounting or don't do coding. Literally. Yeah, anything.
- [41:07]
Krystal Ball
Definitely don't do that.
- [41:08]
Saagar Enjeti
But I'm saying, or literary or physics or any of these things, just because I don't see how that won't, you know, at the very least be attacked sometime in the future. Anyway, it's been, you know, interesting discussion. Let's get to cars for kids.
- [41:25]
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- [43:00]
Saagar Enjeti
We talked a lot about fraud earlier in our show, and it's a very interesting case out of the state of California with a jingle that many of you might remember 1877 Cars for Kids Stuck in the brains Of a lot of, I think they called it an earworm. But this new court case in California exposes something truly shocking. Let's go and put it up here on the screen. A court has now banned these Cars for Kids ads in the state of California as they report here in the local NBC News Bay Area. Cars for Kids, known for its catchy jingle, will no longer broadcast ads in California. The Orange county judge found that the charity violated false advertising laws. The case stems from a lawsuit in 2021. A man sued the charity's affiliated organization, URA Inc. Where he discovered that the money from the car he donated was not going to underprivileged children in California. Instead, the money landed with an Orthodox Jewish group in New York and New Jersey that sends teenagers on gap year trips to Israel with their families. Cars for Kids ads will be banned in California until there is an audible disclosure on the charity's religious affiliation, the region of where the money goes, and a more accurate age range of the recipients. Now, to be clear here, Cars for Kids is denying that they weren't open about this. Let's put E5 up here on the screen. They say that the California court order to pull its ads is deeply flawed and claims that their religious affiliation was clear.
- [44:32]
Krystal Ball
I don't know. Was it clear to y'? All? Wasn't clear to me.
- [44:34]
Saagar Enjeti
You can certainly make up your mind for yourself. Cars for Kids says it is well known we are a Jewish organization and referred to the suit as a lawyer driven attempt to siphon off charitable funds from their own gain. Again, the organization is based in the predominantly Orthodox Jewish city of Lakewood, New Jersey and claims it has helped quote hundreds of Californians. Now, some of the details here are genuinely shocking. So just to read here a little bit from the New York Times in their write up of what actually happened is it primarily funds this New Jersey based Jewish organization, Aura, which provides programs including an adult matchmaking service, trips to Israel for teens and summer camps in New York. The only program in California that Cars for Kids sponsored was a promotional giveaway of Cars for Kids branded backpacks. Similarly, what they write is that there was testimony where they testified actually that about $45 million a year that they raised, 60% goes to URA, its sister organization, which operates out of that same building in Lakewood, New Jersey. Another 30% is spent on in house advertising, 6% on administrative costs. URA has also spent the money overseas, the Judge wrote, including $16.5 million to buy a building in Israel. And so when we went down a little Bit further. Let's put E4. Some of the photos that we were able to find from ura, this organization. They include, you know, some of these. By the way, I literally pulled this image. It's from their own website. Include if anybody's accusing me of doctoring it. This, for example, is Last Chance Deadline. It features their mascot 5 which is a $5 bill, speaking into a microphone saying the biggest event of the year or athan. They have several images that they show of this mascot in some cases with orthodox Jewish children which are around it. So it is, I mean, look, it's shocking to me because of the ubiquity of the jingle of the 1, 8, 7 7. Everybody knows that. And this gets to what we were talking about earlier with fraud. Just the other day I told a story at our ama. I was at Old Navy and there was some organization where the guy was like, hey man, we buy clothes, like cheap clothes for foster kids. I'm like, you know, I put a 20 out of my wallet and I was like, here you go. Now. I'm like, I don't know, you know, this, this, something like this. I'm like, maybe I'm an idiot. You know, it's like a drug addict who is pretending or something. I have no idea. I hope that's not the case. Maybe I got bamboozled. But this is the type of stuff which really makes you think about it. And yeah, I mean, I had a hard time getting through a lot of that with a straight face. But I mean, it's crazy. It's objectively crazy. One of the most famous jingles on all of television, a nonprofit based organization that it ends up. This California court decision finds that their religious affiliation is undisclosed and that the testimony from the actual court case reveals how much of that money is being funneled to this separate Orthodox Jewish court group. There's nothing wrong with people who want to support an orthodox Jewish group or whatever they want to do. That's fine. That's your right. As Americans, however, using this advertising, which a lot of people, well meaning folks, people like me, who are like, yeah, let's give money to foster children and then if that is then used for a different purpose, that's a very, very different story.
- [48:02]
Krystal Ball
Yeah, yeah. I mean, the assumption, when you hear that right, the, the intended assumption which is made is that they're taking these cars and they're, you know, selling them off for parts or whatever and the money is benefit underprivileged children of all stripes. That is what you assume. And by the Way this organization, aura, it's not just about kids even. It's like adult matchmaking services and whatever. There's all kinds of stuff that they're doing, but it's not anything approaching what most people thought that this money was probably going towards, which is why this judge in California, and I think the standard for false advertisement, fraudulent advertisement, is pretty high. Oh, it definitely is. You see a lot of claims on TV which are like, that's not really true. You can make a lot of claims on TV without it being deemed to be fraudulent advertisement. So it's a pretty high bar. They had to meet to be like, no, this is too far. You are deliberately misleading people to thinking that their money and their donation is going to something which it is not going to. I told you yesterday. I'm pretty sure I have to go back and double check. But I'm pretty sure that my old Volvo that I donated to Cars for Kids, I'd had it a long time and had, like, 200,000 miles, and I stopped working, and I was like, all right, I need to get rid of this thing. What's the easiest thing? Oh, Cars for Kids. That's the first thing that pops to mind. And now, yeah, I feel like if I'm, like, I should have investigated them more. I should have looked into where does the money actually go, et cetera. But like, many people just assumed, okay, this is an easy way to get rid of my car, and I'm straight up, whatever.
- [49:37]
Saagar Enjeti
You have no real. You know, it's like, Save the Children.
- [49:40]
Krystal Ball
Yeah. I mean, it's solving a problem that I have, and I assume it's going to some sort of reasonable purpose, so we're just going with it.
- [49:46]
Saagar Enjeti
Right? I mean, here in the dmv, you are inundated with street canvassers, you know, Save the Children, Planned Parenthood, whatever. Right. So it's common, but at the very least, like, you know, I usually just pretend that I'm on a phone call whenever I walk past them, but. What was that? Sorry, can't hear you. But one of the things that you at least know about those organizations is they're usually, like, pretty well vetted, you know. You know what Save the Children does? You know what Planned Parenthood does? You know what? You could disagree. You know, whatever medications, frontier, any of these organizations. But then I again, very naively assume Cars for Kids is in that category. How else can something be on the air for over 20 years, right. And nobody. Nobody from the Better Business Bureau of.
- [50:31]
Krystal Ball
Oh, it must be legit. Yeah, it's gotta be ubiquitous, right?
- [50:33]
Saagar Enjeti
And, you know, joke's on me. It's fair. Totally, totally get it, you know, for being too well meaning or any of those, for not doing more investigation. But honestly, people do deserve to know. And the fact is, is that all of the quotes that I read from the money and the percent wise comes from the Chief Operating officer's testimony before the State of California, who the judge herself described as strikingly candid whenever it came out. The only question is about whether any of this is going to be applied in the future. And if anybody from the White House, you know, they're very upset about fraud and all that. I welcome your interest in this particular case. I am not in any way alleging fraud. I'm just saying, you know, based upon what was.
- [51:18]
Krystal Ball
Well, I mean, they were found guilty trial, you know.
- [51:20]
Saagar Enjeti
Well, no, no, they weren't found guilty. As if they have to repay. They just have to amend their advertising.
- [51:25]
Krystal Ball
Their advertisement were banned in California based on a court decision. I wonder if other states are also going to follow suit because. I know, yeah, I mean, when I lived in New York, I saw these things more than anywhere. Makes sense since it's a New Jersey organization. So it's right there. Had a couple of updates. Speaking of trips to Israel and all of these sorts of things, I have a couple of updates with regard to Israel. Put E6 up on the screen. There's a report from Haaretz, by the way. The ICC is disputing this, but there's a report from Haaretz that the ICC prosecutors seeking warrant warrants for the arrest of Ben GVIR Smotrich and several other Israeli officials for war crimes. So, like I said, the ICC is denying this report. Previously, warrants had been issued for the arrest of several other officials, including Netanyahu. I believe it was Netanyahu and Yoav Gallant for whom arrest warrants have already been issued. So we'll follow this and see what comes of that. But also wanted to make sure to highlight and make sure it doesn't fall out of the news what's going on in Gaza right now. We told you before, first of all, the cease fire was completely bunked. They continued to strike and kill Palestinians within Gaza. The Israelis have taken control of much more of the Gaza Strip than they were supposed to in accordance with the ceasefire plan. The idea that, you know, you'd start with a phase one and you'd move to a phase two, which included reconstruction and, you know, some governance apparatus, et cetera, that has never come to fruition. I Think it was never intended to come to fruition. And instead you have this just horrific limbo where people in Gaza are still living in objectly horrific, unsanitary conditions, suffering gravely, you know, inadequate food, inadequate medical care, the sanitary conditions are horrifying, rats infestations, just everything terrible that you can imagine. And Netanyahu went out and was bragging about how much of the Gaza Strip the Israelis now control, and saying, and we'll see what happens next. Today it's 60%. Tomorrow we'll see. Let's take a look at this. So he said, and I quote, we returned all our hostages, the last one of them. And we did this without giving back territories. Did you hear? We returned all our hostages. There were those who said, leave, go outside. We did not go outside. Today we control how much? 60% of the Strip. Tomorrow we will see. Tomorrow we will, will see. So just overtly bragging about annexing the Gaza Strip. You know, I mean, the. The idea that there was going to be some, like, great resolution here and it was going to be amazing, was always quite fraudulent. And now he's just happy to. To brag about the fact that they are completely annexing this territory at this point.
- [54:08]
Saagar Enjeti
Yeah. And by the way, everyone will be interested to know Netanyahu's corruption trial was cut short, his testimony again today for the second time in a row, because of diplomatic and security reasons. So just I just wanted to make sure everybody was aware of that while that's happening and for why maybe that war might need to resume sometime soon if that testimony and trial continues, which just happens to very conveniently get delayed for national security reasons all the time, in addition to now having literally, what is it, a thousand new kilometers of Gaza and now this new expulsion of a significant part of the west bank, which has nothing part to do with Gaza. No, that's where we are. All right, we have Chris Rabb standing by. Let's get to it.
- [54:49]
Krystal Ball
Looks like State Representative Chris Robb had a scheduling snafu today. Busy day, election day, so understandable. We'll be following the results closely tonight, and Ryan and Emily will cover that and so much more tomorrow. We will see.
- [55:16]
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- [55:47]
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- [56:47]
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- [57:17]
Krystal Ball
This is an iHeart podcast. Guaranteed Human.