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- [00:15]
Amy Goodman
From New York. This is democracy now.
- [00:19]
Juan Gonzalez
Hostilities and displacement orders continue to claim lives and drive people from their homes. The scale and uncertainty of these orders make them almost impossible to comply with, safely bringing into question their effectiveness, a requirement under international humanitarian law.
- [00:34]
Amy Goodman
In Lebanon, Israeli forces kill eight people in the southern city of Tyre following new evacuation orders as President Trump claims a peace deal with Iran is days away. There appears to be no agreement as to whether Lebanon will be included. We'll go to Beirut for the latest. Then to the big news on Wall Street.
- [00:54]
Eric Gardner
SpaceX is going public this month. It could be the biggest IPO in history.
- [00:59]
Quinn Slobodian
It could also make Elon Musk the
- [01:01]
Eric Gardner
world's first trillionair of Americans like you and me are about to become SpaceX shareholders. We won't buy a single share.
- [01:09]
Amy Goodman
Rigged. We uncovered a hidden wealth transfer in the SpaceX IPO. You're holding the bag. That's the title of a new report by More Perfect Union's business reporter Eric Gardner. We'll talk to him and Quinn Slobodian, co author of Muskism. Finally, President Trump is booed by hometown basketball fans here in New York City last night. We'll talk to sports journalist Dave Zirin.
- [01:39]
Juan Gonzalez
First of all, Donald Trump is the reason why the New York Knicks lost that game last night. His presence, his distraction, the horrible vibes he brought to the arena. But we have to remember that the boos he received are not just because of the present politics, but because of a 50 year abusive relationship that that man has had with the city of New York.
- [01:57]
Amy Goodman
All that and more coming up. Welcome to Democracy Now. Democracynow.org, welcome to the War and Peace Report. I'm Amy Goodman. President Trump says the United States is nearing a peace agreement with Iran, claiming he's in the final throes of a deal that could be completed within days. It's at least the 37th time since late March Trump has said publicly Iran and the US Are closing in an agreement or that Tehran is eager to reach a deal. Trump's latest claim came after Israel and Iran halted drone and missile attacks against one another following the largest escalation since the so called ceasefire was declared in April. On Monday, Iran's parliament speaker and top negotiator Mohamed Bagar Galibaf said Iran is responding to U.S. and Israeli violations.
- [02:53]
Eric Gardner
What caused these tensions was that the Americans committed a blatant violation of the ceasefire, both through the naval blockade against the Iranian nation and by violating the agreement made on Lebanon and the ceasefire. The remarks made by the US President about the Memorandum of understanding contradicted parts of that had been agreed to. This showed that they are seeking neither a ceasefire nor dialogue.
- [03:15]
Amy Goodman
In Lebanon, Israeli forces ordered all residents of the coastal city of Tyre and its surrounding suburbs to flee north of the Zahrani river just hours before it began, heavily bombing the area. Five people were killed, eight others injured when Israel struck near a Red Cross center in Tyre. Four of the wounded were paramedics. The attack also damaged a UNESCO World Heritage site. Lebanon's Health Ministry reports Israel's killing killed more than 3,600 people in Lebanon since March 2, including 245 children. More than 900 children have been wounded in Gaza. Israeli forces have reopened border crossings into the besieged Palestinian territory after closing them Sunday in retaliation for Iranian strikes. UN Secretary General Antonio Guterres had urged Israel to immediately reopen the passages, which are the only route for desperately needed humanitarian aid, which Israel severely limits. Meanwhile, Israeli strikes killed at least seven Palestinians Monday, including a child, as Israel's army pushes the so called Yellow Line deeper into Gaza. In one attack, an Israeli drone fired at people gathered in Jabali refugee camp, killing three. Among the dead eight year old Jad Salman, a young boy whose father Yousef was seen clutching his son's school bag saying a final goodbye.
- [04:41]
Quinn Slobodian
My son is 8 years old. What wrong did he commit? He was leaving his school. He was leaving school. This is his bag with blood on it.
- [04:49]
Amy Goodman
Nigeria's military says it's freed360 people abducted by Boko Haram in southern Borno in the northeastern part of the country. But villagers in the region say joint U S Nigerian airstrikes killed dozens of civilians during operations in May when Africom and the Nigerian army claim they killed 175 so called terrorists over three days. Nigeria is facing a decade long insurgency in the north, where armed groups have routinely carried out kidnappings for ransom. In California, progressive Los Angeles City Council member Nithya Raman will advance to a November runoff election against incumbent Mayor Karen Bass, who's seeking a second term. A count of mail in ballots from the June 2 primary showed Rahman surging ahead of former reality TV personality Republican Spencer Pratt. This comes as officials continue to count ballots in the race to succeed California Governor Gavin Newsom. With more than 80% tallied. Republican Steve Hilton has a slight lead over Democrat Tom Steyer in a close race for second place. One of them will advance to take on former Biden administration Health and Human Services Secretary Javier Becerra in the general election. On Monday, President Trump repeated his unfounded claim California's elections are rigged. Writing on his Truth social platform, quote, not possible for Spencer Pratt to have lost the L A runoffs after the big lead he had Third World Nation, unquote, Trump wrote More than half of Los Angeles voters are registered Democrats, compared to less than 15% who are Republicans. President Trump formally nominated his former personal lawyer Todd Blanche to serve as attorney general. He would succeed Pam Bondi, whom the president fired in April. The nomination comes just weeks after Blanche used his position at the Justice Department to protect Trump, his family and his business from any IRS investigation connected to tax returns filed before Trump's controversial $10 billion settlement with the IRS. In a statement, Public Citizen Co President Lisa Gilbert wrote, quote, this is yet another example of Trump assembling a team of henchmen whose primary qualification is doing his own bidding rather than serving the nation to staff the government, blanch demonstrate his toady qualities throughout his audition for this role and is being awarded with the leading role as a result. An immigrant from the nation of Georgia has died in an ICE Immigration and Customs Enforcement jail Mamuka Achmeladze is the 50th person to die in ICE custody since Trump returned to office. The 43 year old had been jailed at the troubled Wynn Correctional center in Louisiana for about four months when he was found unrespons. ICE officials have not disclosed further details about his death. He's the second immigrant to die while detained at Wynn Correctional center in less than two months. The facility is operated by the Wynn Parish Sheriff's Office and ICE contractor LaSalle Corrections. A recent inspection of the ICE jail found excessive use of force by guards, poor medical care and unsanitary conditions. New Jersey governor Mikey Sherrill conducted an inspection of the Newark ICE jail known as Delaney Hole Monday after previously being den to the jail where hundreds of immigrants began a hunger and labor strike in May. Governor Sherrill said her visit was closely controlled and limited and that she was prohibited from speaking to any of the imprisoned immigrants inside. In a statement, Sherrill said the restrictions during the visit continue to raise, quote, serious questions about the real conditions of the facility and the treatment of those held there, unquote. Sheryl has faced criticism after she deployed New Jersey State Police on protesters outside Delaney hall, run by the for profit private prison company Geo Group. Mutual aid volunteers have continued to support the families of those detained even after facing harassment from law enforcement. On Monday, educator and YouTube star Ms. Rachel, known to millions of children around the world, paid a visit to the volunteers as well as the children of parents detained at Delaney hall. She said on her Instagram, quote, met the sweetest children whose hearts are broken. They just want their parents home again, Ms. Rachel said. In related news, President Trump's so called border czar Tom Homan lashed out at Delaney hall protesters in an interview with Fox News, claiming government surveillance had revealed most of the demonstrators are not from New Jersey.
- [09:28]
Eric Gardner
Look, these are paid protesters. We got facial recognition of people from Portland. They're at Portland riots and many from the Minnesota this is a well planned,
- [09:39]
Amy Goodman
established thing they're doing. This isn't homegrown. In the same interview, so called border czar Tom Homan also laid out a plan by the Trump administration to deploy a massive surge of federal immigration agents to New York City in retaliation for new legislation recently signed by Governor Kathy Hochul that bans state and local law enforcement from collaborating with ICE and enacts other immigration protections. Homan's announcement came just days before the start of the World cup this week, with immigration activists leading campaigns nationwide to protect communities amidst an expected rising presence of ICE agents during the soccer tournament. New York City Mayor Zoran Mamdani pushed back against so called border czar Tom Homan's threats during a press conference with Governor Kathy Hoch on Monday, calling for ICE to be abolished and saying, quote, I believe that ICE raids are cruel, they're inhumane, they do nothing to serve in the interest of public safety, the mayor said. Mamdani also responded to the mounting barriers faced by World cup fans and soccer players from qualifying nations that are on Trump's travel ban and visa restrictions list.
- [10:51]
Unidentified Activist/Protester
The World cup is supposed to be a celebration of the world as a whole and some of the decisions that we've seen been taken by the federal administration, be it the denial of visas for journalists from certain countries or the rejection of a visa for a coach of a team, as well as single day visas for specific foreign national teams. This is anathema to what this tournament is supposed to be about. If we cannot even allow the players, the teams and the journalists covering those teams to come into this city and this country, then it begs a larger question about our commitment to the spirit of this tournament.
- [11:27]
Amy Goodman
A federal judge has ruled against President Trump's $100,000 annual fee on H1B visa applications, saying it's an unlawful tax. This decision comes days after another federal judge ruled against a Trump administration policy to freeze applications for asylum green cards, work permits and other immigration protections for people from 39 countries. And President Trump was loudly booed by basketball fans at Manhattan's Madison Square Garden Monday evening as he attended Game 3 of the NBA Finals between the New York Knicks and the San Antonio Spurs. The unwelcome reception drowned out the singing of the national anthem after a camera showed Trump saluting from a VIP suite surrounded by bulletproof glass.
- [12:15]
Quinn Slobodian
Who's brought stripes and bright stars through the perilous fight?
- [12:27]
Amy Goodman
Fans reportedly waited outside Madison Square Garden for hours due to a strict security protocol resembling tsa. And Trump's presence prompted the New York police to cancel a watch party outside Madison Square Garden that would have attracted thousands of people. We'll have more on this story later in the broadcast with the nation's sports editor, Dave Zirin. And those are some of the headlines. This is democracy now, democracynow.org, the war and Peace Report. I'm Amy Goodman in New York, joined by Democracy Now's Juan Gonzalez in Chicago. Hi, Juan.
- [13:01]
Host/Interviewer
Hi, Amy. And welcome to all of our listeners and viewers across the country and around the world.
- [13:06]
Amy Goodman
We begin today's show in Lebanon, where Israel is continuing to carry out deadly attacks despite a call by President Trump to halt strikes. In the deadliest attack, Israel killed nine people in the city of Tyre. Earlier today, Israel also ordered residents of Tyre to leave the city. On Monday, an Israeli attack near a Red Cross center and Tyre killed five people. Four paramedics were wounded. Meanwhile, Hezbollah said Monday it had fired rockets and advanced advancing Israeli forces in southern Lebanon. Israel's repeated attacks on Lebanon prompted Iran on Sunday to carry out its first strikes on Israel since April. Israel responded by retaliating against Iran. On Monday, Iran announced it would halt new attacks on Israel, but warned it would carry out a more severe response if Israel continues to attack Lebanon. We go now to Beirut, where we're joined by Leila Yunus, investigative journalist and writer based in Beirut. Her most recent piece for Dropsite headlined, you either leave right now or you die. Israel's ethnic cleansing of a village in Lebanon. Why don't you describe what you have written about Layla and talk about the Iran attacking Israel over what it's doing in Lebanon and then Israel striking back. Then apparently President Trump speaking to the Israeli prime minister Netanyahu and warning him to stop hitting Iran. So they agreed, but they're still attacking Lebanon.
- [14:38]
Leila Yunus
Cher. Thanks for having me, Amy. So first I'll take you to the village of Ainahara, which is a small village in the plains near the southern border. That's what I wrote about for my Last Drop site story, and it's the story of what can only really be described as the ethnic cleansing of that village. People return there after the ceasefire in mid 18. And I think this story, along with others, will tell you just how much the word ceasefire has lost its meaning in both Lebanon and in Gaza. But these villagers returned after the ceasefire. The first day that they're there, an Israeli group of Israeli soldiers visit the village, tell them that there's a curfew, and they set up a checkpoint on the southern end of the village. Twelve days later, they return in over 100 of them, streaming behind an armored bulldozer. My source, Naseen Abdullah, is at her corner store when this happens. They sweep into the village, they tell people, you have two hours to leave. They don't even give them that. According to Nasene. They go door to door at gunpoint telling people, you leave right now or we shoot you. And I think that this story is really emblematic of what we've seen among villages in the. And remember, Ain Arab is actually north of the so called yellow line, underscoring the arbitrary nature of these boundaries. So, you know, the kind of continued insistence that southern Lebanese people leave their land, head north with nowhere to go. And you know what sources have told me, whether in the city of Surtir, as you were just talking about in your headlines, or in the city of Nobody, or other villages across the south, more and more people saying, well, we actually refuse to leave because for months now, they've been forced into displacement. They've been forced to live in government shelters that are not adequate, are not clean. They've also been subjected to steep rent hikes and scrutiny because many of them are from the Shia community, which Israel has made a point of targeting even into their displacement. Now, as for the second part of your question, you know, Iran made very clear that an Israeli escalation in Beirut would derail negotiations. Israel clearly did not heed this call. They've been wanting to strike the southern suburbs, and they did in broad daylight in the neighborhood of Haya Selim. And then following that, Iran in the evening launched a volley of missiles towards Israel. Israel then responds, and then you have Trump on truth, social rights, stop shooting. And I think it's just really important to emphasize the absurdity of all of this. Right. Because Trump is kind of waving his hand saying, we want a deal, we want peace. Let's remember, this all began with the US Israeli assault on Iran. That's kind of what this whole thing was sparked from. And the US's continued support for Israel's aggression in southern Lebanon is the reason we are where we are right now.
- [18:09]
Host/Interviewer
And Lila, you've also said that the Israel Lebanon truce plan and the one that was reached in 2024, two years ago, was the so called ceasefires, that now there's these so called pilot zones where basically the Lebanese army is supposed to sweep in and demilitarize them. Can you talk about that?
- [18:30]
Leila Yunus
Yes. So basically on June 3, following another round of negotiations between the Lebanese and the Israelis at the Pentagon in Washing, they come out with a new agreement which resembles very closely the November 2024 ceasefire. The only difference is that there's going to be these so called pilot zones where the Israeli military in the areas that it's currently occupied will retreat and then will be replaced by the Lebanese army which will then search for Hezbollah's weapons store supposedly and destroy them. This is absurd for multiple reasons, the first of which is because the Lebanese army has demonstrated throughout the 15 month ceasefire period its to disarm Hezbollah. Secondarily, it is basically a legitimation of continued Israeli presence in the south. And thirdly, and I think most importantly, this agreement includes no similar stipulations for Israel. So basically Israel is allowed freedom of movement in the south of Lebanon in a scenario that many have begun comparing to the occupied West Bank. Remember in that 15 month ceasefire period, Israel invaded Lebanese terror territory over 1500 times according to the United nations peacekeeping forces based in the south. So you know, what they're basically looking for is impunity. They're looking for forever war where they are essentially able to continue their incursions and continue their drone strikes. And the Lebanese people are sort of supposed to accept this.
- [20:05]
Host/Interviewer
And what do you make of all the press reports, especially in the west, of a rift between Trump and Netanyahu? And Netanyahu using continued the invasion in Lebanon to subvert any possible peace agreement with Iran.
- [20:22]
Leila Yunus
You know, I really see this all as political theater because the United States continues its military support for Israel. It continues to support, even most recently Marco Rubio we heard convinced Trump to support Israel strikes on Iran. So you know, any sort of of rift that we might see in the media, an angry phone call between Netanyahu and Donald Trump is ultimately meaningless. When the basic conditions in the south and the basic goal of Israel, right, continued presence in southern Lebanon, continued occupation, right. As long as that is upheld, supported as long as they are granted impunity and arms by the United States, any sort of political theatrical phone calls are ultimately, ultimately meaningless.
- [21:15]
Amy Goodman
Leila Yunus, investigative journalist and writer based in Beirut, will link to your piece for Dropsite. You either leave right now or you die. Israel's ethnic cleansing of a village in Lebanon. Coming up, we look at Elon Musk's quest to become the world's first trillionaire. And SpaceX going public with the biggest IPO in history. Stay with us. Well, when I first enter this country, a stranger can. When first unto this country. Rendition by Nora Brown and Stephanie Coleman. This is democracy now. Democracynow.org, i'm Amy Goodman with Juan Gonzalez. Elon Musk's rocket company, SpaceX, is set to go public this week targeting a $1.8 trillion valuation. That's trillion with a. It's expected to be the largest IPO in history. It's also projected to make Elon Musk already the world's richest man. The world's first trillionaire. SpaceX is parent company to several Musk ventures. These include Starlink, the satellite Internet company, which is profitable and growing, and Xai, which operates at a significant loss. The SpaceX valuation is based largely on Musk's promise to launch and operate data centers in space. Space to power AI technology. That's not yet been proven. While Musk and other investors are positioned to see their own wealth skyrocket, what will the SpaceX IPO mean for regular Americans? The nonprofit newsroom More Perfect Union has released a new report from business journalist Eric Gardner. It's called Rigged. We uncovered a hidden wealth transfer in the SpaceX IPO. You're holding the bag. This is a part of that report.
- [23:32]
Unidentified Activist/Protester
I'm a guy that's into space. I hope we go to Mars and all that stuff. To see that get turned into a way to transfer wealth from ordinary people who are just trying to save for retirement to people like Elon Musk is just depressing.
- [23:47]
Eric Gardner
SpaceX is going public this month. It could be the biggest IPO in history.
- [23:51]
Juan Gonzalez
It could also make Elon Musk the world's first trillionaire.
- [23:55]
Eric Gardner
Millions of Americans like you and me are about to become SpaceX shareholders. We won't buy a single share.
- [24:01]
Robin Wigglesworth
The reason why I described it as a bag holder situation is because it feels like it's getting engineered to people.
- [24:08]
Eric Gardner
Bag holders, IPO valuations, sounds complicated. It's supposed to, but you don't need a finance degree to understand. You need 10 minutes. The whole scheme hinges on something you've probably heard of index funds. A good chunk of American retirement savings are tied to them. You pick a fund, it picks an index which picks the stocks. You don't think about it. That's the point. Index Funds are supposed to be safe, passive. The rules are the rules. Except if you look closely, the rules seem like they're being rewritten to make people like Elon Musk fabulously wealthy at everyone else's expense.
- [24:40]
Unidentified Activist/Protester
Every piece of evidence we have is that the IPO is being engineered to rise very rapidly after it prices and then fall very dramatically after that. That is a recipe for retail investors especially to take large losses.
- [24:55]
Eric Gardner
$1.75 trillion. That's the value Elon Musk has floated for SpaceX when it goes public this month. More than Walmart. Is it worth that?
- [25:03]
Robin Wigglesworth
SpaceX is a real company. It shoots satellites up in the sky. It provides things like Starlink. It's a very impressive engineering company.
- [25:13]
Eric Gardner
That's Robin Wigglesworth, editor at the Financial Times.
- [25:16]
Unidentified Activist/Protester
There is definitely real business to be done there and real asset value there. The question is whether it is as large as Musk claims it is.
- [25:23]
Eric Gardner
George Perky's advises investors where to put their money. Last year, SpaceX made about $19 billion, most of it from Starlink and government contracts. But a company's market value is partially a bet on what that company will
- [25:36]
Eric Gardner (continued)
earn in the future.
- [25:37]
Eric Gardner
That bet is called a revenue multiple. Facebook went public at roughly 10 times its projected revenue. SpaceX is asking for over 50 times.
- [25:48]
Unidentified Activist/Protester
The combination of sheer size and this extreme multiple is completely unprecedented.
- [25:53]
Eric Gardner
This valuation seems too good to be true. Some investors may need it to be. In 2022, Elon Musk raised $44 billion and bought Twitter. His backers, Andreessen Horowitz, a Saudi prince, the co founder of Palantir, and Jack Dorsey, the guy who founded Twitter in the first place. Musk renamed it Axe, and within a year it's worth less than half he paid. That's a problem. There was also a solution. AI was hot. Musk owned an AI company, so he merged X into xai. No cash changed hands. X investors received XAI stock. But that solution raised another problem.
- [26:31]
Robin Wigglesworth
XAI is essentially a money furnace.
- [26:34]
Eric Gardner
The solution? Musk has a rocket ship company. He uses it to buy XAI. Again, no cash exchanged. 3 companies, 2 mergers, $0 actually paid. Everyone who helped take Twitter private now holds SpaceX shares. Now, SpaceX isn't just a rocket company that sells Internet. According to Musk, it's the future data centers in space.
- [26:57]
Quinn Slobodian
If some of my predictions come true, SpaceX will launch more AI than the
- [27:02]
Eric Gardner
cumulative amount on Earth combined.
- [27:03]
Quinn Slobodian
Of everything else combined, I see no
- [27:06]
Unidentified Activist/Protester
evidence that it's a viable business opportunity. There are far too many physical challenges with doing this.
- [27:11]
Eric Gardner
But the value has to hold, because so far no one has been paid. Investor shares are only worth something on paper. To turn paper into cash, SpaceX has to go public. When a company goes public, it opens its doors early. Investors cash out, get paid for the risk they took. Everyone else gets a chance to own a piece of something that used to be off limits. It's called an initial public offering, or IPO for short.
- [27:36]
Unidentified Activist/Protester
It is a very normal part of a company's evolution and life cycle.
- [27:40]
Eric Gardner
There isn't just Twitter investors here. SpaceX's original investors took a big risk. Peter Thiel, Palantir's other co founder, Google and Andreessen Horowitz. But SpaceX's IPO is anything but normal. In a typical IPO, 90% of shares go to institutional investors, pension funds, banks, insurance companies. Regular people get 10%. SpaceX says they're changing that 30% to ordinary people. Main street, not Wall Street.
- [28:07]
Robin Wigglesworth
When you see an IPO give a far larger allocation to ordinary investors, it's usually a sign that they can't get professional investors to buy that. That price. The price is nuts. And if you can't sell it to professional investors while you sell it to unprofessional investors who don't know any better.
- [28:25]
Eric Gardner
If people want to invest in SpaceX's IPO, that's their right. The problem is Musk found a way to make people invest in SpaceX whether they want to or not. How? Index funds.
- [28:36]
Robin Wigglesworth
The index fund is one of the rare examples of the finance industry coming up with something that lines the pockets of ordinary people and not Wall street itself.
- [28:45]
Eric Gardner
An index is a list. Someone decides which companies go on it. A fund is a basket. Someone builds it to mirror the list. When a company gets added to the index, every fund mirroring it has to buy shares not because they think it's a good investment, but because the rules require acquire it.
- [29:00]
Robin Wigglesworth
Index funds have both outperformed the vast majority of active managers in every market in every country over any time frame. In the long run.
- [29:09]
Eric Gardner
Thousands of indexes exist. Nearly a third of American stock is
- [29:13]
Eric Gardner (continued)
tied to one of them.
- [29:14]
Eric Gardner
One of the most popular tracks the NASDAQ 100. The 100 biggest non financial stocks on the NASDAQ exchange. Under Nasdaq's index rules, SpaceX isn't eligible to be included in the Nasdaq 100. New companies have to wait up to a year. It's called seasoning.
- [29:29]
Unidentified Activist/Protester
Seasoning a stock is just the process of having it trade publicly for a while. Public markets tend to be unsure of how to handle certain kinds of investments. Novel sorts of companies really quickly.
- [29:42]
Eric Gardner
Like a rocket company that makes most of its money providing satellite Internet and wants to build AI infrastructure in space. If Musk could change that rule, he could trigger mandatory buying of SpaceX stock by every fund that tracks the index. This spring, Nasdaq changed the rules.
- [29:57]
Juan Gonzalez
Nasdaq is both an index provider and an exchange.
- [30:02]
Eric Gardner
Ben Shifrin spent 18 years at the Security and Exchange Commission which oversees the stock market.
- [30:07]
Juan Gonzalez
You know, it kind of used to be the case that the exchange, you know, wasn't really supposed to be this for profit money making entity, but now it is.
- [30:16]
Eric Gardner
Two stock exchanges compete for every major listing.
- [30:19]
Robin Wigglesworth
New York and Nasdaq or the Nasdaq stock exchange. Having SpaceX is a big win. You want big prestigious tech map companies to go public there and the New York Stock Exchange wants them to go public. On the New York Stock Exchange.
- [30:33]
Eric Gardner
SpaceX was the prize. Musk knew it. According to Reuters, Musk conditioned where SpaceX would list on one fast track SpaceX into their major index.
- [30:43]
Robin Wigglesworth
It's all gravy for NASDAQ.
- [30:45]
Eric Gardner
SpaceX pays NASDAQ to list their stock. The real money is somewhere else else.
- [30:49]
Robin Wigglesworth
All the date and trading fees that they then sell over time, year after year to other trading firms, asset managers.
- [30:56]
Eric Gardner
Nasdaq changed a rule that shapes trillions of dollars in retirement savings. No regulator approved it.
- [31:02]
Juan Gonzalez
If an index wants to change how it's going to include certain stocks in that particular index, that is not something that has to be approved by the securities and Exchange Commission.
- [31:10]
Eric Gardner
Upwards of $30 trillion is being directed by a process that's effectively self referenced, regulated.
- [31:16]
Robin Wigglesworth
I think at some point we are going to have to say that these are incredibly influential investment advisors in practice and they should be regulated and supervised accordingly.
- [31:27]
Eric Gardner
When I asked Nasdaq if the change was made because SpaceX demanded it and if there's a conflict of interest in being both an exchange and an index provider. Nasdaq never answered the conflict of interest question, but did say that the rule change reflects how markets have a All the consultation they said followed industry standards.
- [31:45]
Amy Goodman
That's an excerpt of business journalist Eric Gardner's report. For more perfect union, we're joined right now by Eric Gardner himself. Thanks so much. That's a fascinating report. So if you can talk more about the guardrails that were put in in fact, after Enron and the dot com bubble burst, what's the worst case scenario of SpaceX prematurely getting added to the indexes? And 401ks. And remember, you are talking to a world mainly of non economists.
- [32:24]
Eric Gardner (continued)
Yeah, thank you. Thank you for having me. Well, I think the worst case scenario is what frankly seems like it's going to play out over the next couple of weeks and that SpaceX is going to go public. It's going to go public at a price that is essentially double what independent analysts think that it should be be. And regular savers are going to be paying that price while early investors to most random companies will be able to cash out at that high price. As I mentioned in the piece there that you saw, a good way to kind of think about a value of a company is through what's called a revenue multiple. So if you have a restaurant and you do $3 million of sales a year and you sell it for $9 million, you have a revenue multiple of three. That's a standard kind of workable revenue multiple. That's not normal. Musk is asking right now for 94 times revenue multiple. It's a complete bonkers evaluate or it's a complete bonkers valuation. And unfortunately he has essentially financially engineered this IPO as a massive wealth transfer from everyday investors to insiders.
- [33:24]
Host/Interviewer
Eric, the long term goal of SpaceX is not simply to data centers in space, which itself is not yet proven to be able to be feasible. But they actually are talking about colonizing Mars and creating a self sustaining city of a million people in Mars. I mean who on earth wants that? And given all the problems we still have on this planet.
- [33:56]
Eric Gardner (continued)
Yeah. So when a company goes public, they file what's called an S1 with the securities and Exchange Commission and it basically outlines the company. And this S1 that SpaceX filed is effectively bonkers if you look into it. AI is viewed as kind of the saving grace of this company. It's referenced more time. I saw some analysis around this. AI is referenced more time in this S1 than Jesus Christ is in the Bible. It's a complete bonkers thing. As much as they talk about colonizing space and colonizing Mars, if you think about the that that cost a lot of money in kind of capital investments in building spaceships and building space stations, that's a huge investment. If you were to trace their actual investments, what they're making, more than half of it is into AI and so it doesn't really compute. Throwing out kind of a few more kind of a bigger picture for folks. One of the problems with this IPO is that SpaceX is basically three companies. There's SpaceX, the rocket ship company company There's Twitter and then there's XAI. SpaceX, the rocket ship company, is a real company. 2024, the last year before they all merged together, it did about $15 billion of revenue and generated about $800 million in profit. That's kind of a low end of an industrial, but that's a viable company. Last year, Elon Musk merged them all together in kind of a sleight of hand as he was running into troubles of the others. And now revenue is up to about $19 billion, but profit has cratered to under a loss of $4 billion. What's driving that? It's fundamentally AI. They've invested a serious amount of money in what looks like a business line that has no clear path for profitability, and the way out of it is through the public markets. Another way to think about this is that this looks like the first steps towards essentially socializing the loss of a huge investment into a product that doesn't seem to have a profitable path.
- [35:52]
Amy Goodman
Eric Gardner, we want to thank you so much for being with us. We'll link to your report for the nonprofit newsroom. More Perfect Union Headline rigged. We uncovered a hidden wealth transfer in the SpaceX IPO. You're holding the bag. This is Democracy now. Democracynow.org I'm Amy Goodman with Juan Gonzalez. On Friday, dozens of activists with student, labor and community group groups with the Stop Funding Billionaires campaign protested in front of NASDAQ headquarters here in New York to protest the upcoming SpaceX IPO. They chanted and held signs that read no Nazis on nasdaq. Quinn Slobodian now joins us. Quinn is a professor of international history at Boston University. His new book, book, co authored with Ben Tarnoff, is a guide for the perplexed. What concerns you most about this IPO offering and Musk being on the brink of becoming a trillionaire? Professor Slobodian?
- [37:05]
Quinn Slobodian
Well, there's a whole lot of things that concern me about it, but one of the things I find most striking is the way his relabeling of himself as the techno king of Tesla in 2021 is now becoming somewhat more of a reality at a larger scale through the SpaceX IPO. What I mean there specifically is he's really bending and reshaping corporate governance as a whole around his individual personality. The movement of his companies from Delaware to Texas means that he's not held accountable to shareholders in the way he would have been before the creation of a whole share structure so that he has 85% of the shares that would be required to vote him out of a leadership position means that he's produced a kind of ironclad, almost monarchical position inside of this company that actually completely short circuits the whole idea of the public company, which is that there's supposed to be a kind of a shareholder democracy, quote unquote, that can hold leadership accountable. In this case, if you look at that SpaceX IPO, it says that the key person risk, meaning everything hangs on Musk's shoulders, is so great that even if he dies, there actually isn't even a succession plan. It would be in a completely unprecedented zone. So the degree of influence being centralized in one extremely erratic and often dangerous personality is something that seems to be of great concern. Also, I think that there are a couple of other things we talk about in the book that help to get a handle on some of the stuff that Eric was explaining so well. One of the things we talk about in the book is something called attention alchemy. So Musk has been very good at turning himself into a kind of a human meme style stock. As Eric was mentioning, making retail investors have access to 30% of these shares means you're relying on the kind of hype cycles and a lot of the kind of hyper loyal fan base that Musk has built up online, especially in now his kind of bespoke social media echo chamber of x.com, so he's able to produce his own reality inside of that space of x.com such that for example, example, when you looked at yesterday what the top news, today's news was on X, both of those things were to do with Elon Musk. One of the thing wasone of the things was that Elon Musk questions whether colonialism had made Africa poor. And the other one said that Argentine President Javier Milei praised Musk for defeating the Woke Mind virus. If you look at SpaceX as he describes it, as a vertically integrated innovation engine stretching from a social media platform to satellites and rockets, then what he really seems to be saying he's going to do is create a closed communications ecosystem where that really does become today's news, where he can control the message and the content and then use this to kind of automate away the problem of social consent at scale. So above and beyond those problems that I think are accurately being identified of the average index fund holders being left holding the bag, that's kind of a larger ideological project at work here that I think we should all be very concerned that this is now becoming kind of the load bearing infrastructure for the global financial system. Another term we introduce in the book is the idea of state symbiosis. It seems that Musk is also creating a situation where he becomes deeply reliant on state contracts. The state becomes reliant on him. He has over $7 billion of defense contracts just this year. And the idea there, in the end, is that if this starts to teeter, then he'll be too big to fail, and the state will have to step in to bail him out.
- [41:02]
Host/Interviewer
And Professor Slobodian, could you talk about Starlink a little bit? It's already the world's largest satellite Internet provider, and the immense power that it has, not just in terms of economy, but in terms of warfare and state power around the world.
- [41:24]
Quinn Slobodian
Starlink is really kind of the crown jewel of the SpaceX offering. It's the part of the company that actually makes money. The rockets kind of break even. The AI segment is burning money at an unprecedented rate. Starlink satellites he first started putting into low Earth orbit in 2019, and by now there are around 10,000 in orbit. Orbit which accounts for over 70% of all of the satellites in the sky. So he's produced this whole new market sector of low Earth orbit. These things are only 500 km from Earth, much, much closer than the geostationary satellites. They're used by consumers. They're over 10 million subscribers worldwide, but essentially, they're also used by armed forces in the field, famously in Ukraine. And they're going to be a central part to the Golden Dome strategy that Trump has already started, started handing out contracts for. So there's something called Star Shield, which is a more heavily encrypted military network for satellites that is absolutely central to this missile defense program that is the source of a great deal of incoming revenue for people like Musk. So the idea is he can scale up from 10,000 to, as described in the SpaceX prospectus, up to 1 million, and thus create a kind of global telecommunications monopoly. However, this is also one of his greatest vulnerabilities. You can't just put satellites into the sky without getting approval. In fact, something called the International Telecommunications Union, which is an agency of the UN needs to approve these, and there's no way that they're going to approve his request for 1 million satellites. Also, individual countries need to accept his ability to sell the receivers down on Earth, and many countries are still unwilling to do that. South Africa has said no so far. India has said no when Musk refused to do content moderation in Brazil after the attempted coup there. Brazil went ahead and seized the assets of Starlink. So if you read that SpaceX prospectus, you also find out that there are a lot of weak points and choke points. And Musk's greatest vulnerability is still old fashioned legislation, regulation, laws made by democratically elected governments.
- [43:42]
Host/Interviewer
And there was at least one European pension fund, a Danish fund, that announced that they will be excluding SpaceX from their investments, claiming the CEO claimed the extreme concentration of power effectively prevents the board from exercising meaningful oversight and makes it impossible to remove Musk against his will. What is the potential danger to the, even to the US economy of so much investment, especially by index funds in SpaceX?
- [44:18]
Quinn Slobodian
Well, the problem there is, the situation we're in in the United States is a very small number of tech companies, companies are responsible for a great deal of the stock market rise in the last couple of years. Those small number of tech companies also have an unprecedented number of concentration of power in the figure of these founder CEO techno kings, if you like. If one of those founder CEOs starts to go off on a limb, as Musk has been very well known to do, to commit himself, let's say even more passionately to the neo fascist causes in Western Europe that seem to be be so important to him personally, then you could create a crisis within that company, within its profitability, which then doesn't just become a problem for that company, it produces a cascade effect of loss of investor confidence in the tech sector altogether. It drains money out of people's savings accounts and their retirement accounts. And it can be the kind of tipping point that leads to a crash in the sector altogether. So at a broad level, you know what the brave stance of the Danish pension fund should show us is not just that we need to regulate the outliers, the extreme, the more extreme members of this Silicon Valley leadership class. But we should ask a bigger question about why the political economy of the US and by extension the world, has become a one way bet on unproven technology. Why isn't there more diversification? Why isn't there more attention to forms of the green capitalist models, even that were so popular only a few years ago? Why is the biotech sector, the higher ed sector, not valued for the things that it brings, instead of only this often outrageous and absurd vision of launching AI data centers into the stratosphere?
- [46:04]
Amy Goodman
And finally we just have Mennequin. But one word we didn't use in this segment was Doge Elon. Musk is the face of cutting government spending, yet he is taking up more and more of government funding. If you could comment on that. And what the protesters held outside Nasdaq as they chanted no Nazis on Nasdaq, what they mean?
- [46:31]
Quinn Slobodian
Well, yes, I think doge is understood best not just as an effort to cut government across the board, but as a way to refashion and reformat government to make it more open to be be the site of injection for new services from Silicon Valley, specifically Palantir and Musk's AI tools. So it's not about demolishing the government, it's about making the government more compatible, ready for the kind of products that Musk offers and to make him then an indispensable part of the infrastructure. Already they're talking about commercial dominance in Musk's control of military communications infrastructure structure. When the politics of that person who is doing that is also consonant with the furthest right wing parts of the European identitarian movement, then one starts to see why people would hold up signs talking about Nazis in the Nasdaq. It makes us all ask a question that even if those stocks should do well, even if those retail investors are aren't holding the bag, as it were, by the end, let's say they keep profiting. And at the same time Musk keeps filling his feed with questionings about whether or not racism should be recalibrated back to a kind of normal status quo anti whether or not re migration is the right policy for Western Europe and the United States and whether or not any piece of democratic policy that goes against his best interests is simply a matter of corruption and bugs in the mainframe frame. That's what we really should be worried about, the possibility of those things to live together. Tech driven prosperity and radical right wing racist politics.
- [48:10]
Amy Goodman
Professor Quinn Slobodian teaches international history at Boston University. His new book is A Guide for the Perplexed. And we'll link to your Atlantic piece headlined Elon Musk's Space Endgame. Coming up, President Trump booed by hometown basketball fans here in New York City city at the Knicks spurs game. We'll speak to sports journalist Dave zirin. Back in 20 seconds.
- [48:50]
Quinn Slobodian
The songbird has lost her voice.
- [48:54]
Amy Goodman
It's hard to sing when there's no choice.
- [48:58]
Quinn Slobodian
The raven has lost his wings.
- [49:02]
Amy Goodman
Man, he wished he learned to sing. Songbird by Henry Furlan. This is democracy now, democracynow.org, i'm Amy Goodman with Juan Gonzalez. The worlds of sports and politics collided here in New York on Monday night, just blocks from our studio as President Trump attended Game 3 of the NBA Finals at Madison Square Garden. The San Antonio spurs beat the New York City Knicks. It was the Knicks first loss since late April. Due to Trump's appearance, authorities shut down the area around the Garden and ticket holders were asked to arrive hours early and go through TSA style security. Trump watched the game from a suite surrounded by bulletproof glass. During Avery Wilson's performance of the national anthem, many in the crowd booed when Trump was shown on the jumbo trip. The New York Times reports the New York crowd booed Trump more than they booed the spurs when they took the floor. Trump was also loudly booed at watch parties in the city after the game. Trump downplayed the incident.
- [50:19]
Juan Gonzalez
It was, I think, mostly cheers.
- [50:22]
Host/Interviewer
It was loud and it was very enthusiastic.
- [50:26]
Amy Goodman
To talk about this and more, we're joined by Dave Zirin, sports editor for the Nation magazine, host of the Edge of Sports podcast. His new article headlined not even Trump can ruin the Knicks Moment. Really? Can you talk about what happened last night?
- [50:38]
Juan Gonzalez
Yeah, first and foremost, I was wrong. Donald Trump absolutely ruined the Knicks moment last night. I believe he is the reason why they lost. The game lasted about half an hour to 45 minutes longer than a usual game. It was an absolute slog. You mentioned the two to three hour wait to get in there, the TSA style screenings to get into the game. It definitely had an effect on things, especially because this was supposed to be a day about the Knicks. It was supposed to be a celebration of New York, and instead it was about one authoritarian, malignant narcissist. I mean, it's actually not a good thing that there were more boos for Trump than the spurs because it shouldn't have been about Trump at all. We shouldn't even be talking about him right now. And I gotta say something about the booze because I was at a watch party in Brooklyn. The booze were cacophonous at a bar called Chilo's in Bed Spring, which you just took over. Which I just took over. We're turning it into a place for the people, a dive bar for the people. And we had an amazing event. The booze were out into the streets. And we weren't the only bar where you could hear it. You could choose where to hear the boos. And to me, that was important because it was a reminder that New York City's relationship to Donald Trump isn't just about contemporary politics or the last three election cycles. It's about a 50 year abusive relationship that this city has had with this man. From his refusal to rent to people of color in the 70s to him whipping up racist violence due to the Central park exonerated five case to his desire to, quote, unquote, develop our parks with his tacky buildings. This city does not like this man and we've been warning the country about him for, frankly, decades. And maybe last night was the most powerful audio and visual representation of that relationship.
- [52:27]
Host/Interviewer
The players who were on the court felt about this, especially we know, for instance, Josh HART Back in 2020, one of the key figures on the Knicks tweeted back before the November election, yes sir, get Trump's dumb expletive out of the White House. How do you think they felt about what was going on?
- [52:49]
Juan Gonzalez
Well, I think for the Knicks, and I know this a little bit from trying to talk to people on the team, there was a bit of a resentment because this was supposed to be a night about them, about their hard work. They're coming in off a near record 13 game winning streak in the playoffs. It's been the equivalent for the city of going to 13 movies and having them all be awkward. And it created a great vibe. And you walk in the city, it's orange and black everywhere, I'm sorry, orange and blue everywhere, the royal blue, wherever you see. And it was supposed to be the beautiful culmination was the first home game in an NBA Finals for the Knicks since 1999 and their chance to go up three to nothing, which would effectively have insured them the championship for the first time in 53, three years longer than I've been on this earth. And this is the team of my youth, this is the team of my heart. So to see it become about Donald Trump was certainly upsetting for fans. Not just the people in the well heeled tens of thousands of dollars seats in the stadium, but the watch parties, the bars, everybody who's put their heart and soul into this team were basically slapped in the face by Donald Trump.
- [53:59]
Host/Interviewer
And of course, for a person who claims to be a big Knicks fan, there was that photo spread on X of Trump asleep, sleep in his box in the middle of the game. So he obviously wasn't paying too close attention. But I wanted to ask you about also another issue of the Trump administration, which is the World Cup. The treatment of the Trump administration to some of the participants in the World cup, the exclusion that the Iranian team forced to fly in and fly out of the country from Mexico when they're going to be playing games on the same day. And also the recent exclusion of a referee, three chosen by FIFA from Somalia, who was denied entry into the United States.
- [54:45]
Juan Gonzalez
Yeah. I'll just say I've been covering the World cup both in person and at times when it's been in authoritarian countries remotely. And this is the first World cup that I would ever describe as joyless. It's always been a celebration, a party, no matter what country that has hosted it, whether a liberal democracy or an authoritarian regime. But this is the first time that travel warnings are being issued to fans coming here. Even warnings are being issued to people who live in the United States by immigration groups because of the threats of ice being at the stadiums. There's a joylessness. It's supposed to be the party that unites the world. And like the Knicks game last night, this looks to be something that Trump is using his reverse Midas touch to ruin.
- [55:28]
Amy Goodman
And one more question on what happened last night. That image of President Trump in Dolan's box.
- [55:36]
Juan Gonzalez
Yes.
- [55:37]
Amy Goodman
James Dolan. And for a global audience who doesn't know about the significance of the man who owns both Madison Square Garden and the Knicks.
- [55:45]
Juan Gonzalez
Yeah. James Dolan is someone who made his money the old fashioned way. He inherited it. That's one of his commonalities with Donald Trump. They have a very close relationship going back decades. Dolan and his son were both married at Mar A Lago. Dolan has given two Trump untold amounts of money for his political campaigns. Dolan wants to lead a push to rename Penn Station, over which he has a lot of influence because of the presence of Madison Square Garden there. He wants to rename Penn Station after Donald Trump. They have had meetings about that, but that's not all they share. They share accusations of sexual assault and sexual battery and having unsafe work environments for women. That's something Dolan has paid a price for. Racism allegations, of course, plague both men, although calling them allegations for Donald Trump is a stretch to say the least. And as I said, both children of wealth. So they have a tremendous amount of commonalities, but basically they're the commonality that exists when you have, I don't know how else to put it, but two rich jerks who are born on third base and act like they hit a triple.
- [56:49]
Amy Goodman
And Dolan developing Madison Square Garden. The deals that have to be made. And this is with Trump.
- [56:56]
Juan Gonzalez
This is with Trump. The idea is to move Madison Square Garden to be actually on top of Penn Station and to rename Penn Station after Donald Trump. That's the big plan. They have had meetings about this. This is not rumor. This is what Trump wants. People coming into Trump Station, and that's the authoritarian playbook if there ever was one. He needs to name as many things as possible after him now because after he leaves, like with the Trump Kennedy center, people are going to want to take those names down.
- [57:27]
Amy Goodman
Well, I want to thank you, Dave Zirin, sports editor for the Nation magazine, host of the Edge of Sports podcast. His new article is headlined not even Trump can ruin the next moment, though he's reconsidered that recanting. And you're doing a live podcast tonight at Shiloh's, your new bar.
- [57:45]
Eric Gardner
Yes.
- [57:46]
Juan Gonzalez
In the Bed Stuy neighborhood of Brooklyn. I'm doing a great event with 11 year NBA veteran Atan Thomas where we're going to talk about all things sports and politics. So come out to chilos if you want to have a good old time.
- [57:58]
Amy Goodman
So Dave Zirin, who has now really nearly relocated to Washington, well, to New York, though he's in Washington as well. And we're going to be looking more at the World cup in the coming days here on Democracy Now. That does it for the show. After tomorrow's show, I'm headed to Sheffield to the film festival in England will be broadcasting from Sheffield Live, that broadcasts Democracy now every day and has done so for years. And then we'll be at the Ireland Docks. Docks Ireland, the first film to show there, that's in Belfast. Then we'll be in Vermont on the weekend of Juneteenth on June 18th in Burlington. And then we'll be in Brattleboro at the Latches and in St. Johnsbury at Catamount Arts Center. Check our website at democracynow. Org. I'm Amy Goodman with Juan Gonzalez for another edition of Democracy Now.