It Could Happen Here Weekly 225

Summary

It Could Happen Here Weekly 225 (March 28, 2026)

Podcast by Cool Zone Media and iHeartPodcasts
Featured Hosts: Robert Evans, Garrison Davis, Mia Wong, James Stout, Dana Al Kurd, others
Episode Type: Weekly compilation (content from episodes March 18–25, 2026)

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Overview

This jam-packed compilation episode of It Could Happen Here covers a pivotal week (March 18–25, 2026) in U.S. and global politics, war, legal battles, and financial collapse. With rotating hosts and experts, the weekly episode explores:

• The legal fallout from the "Prairie Land Antifa" terrorism trial and implications for protest movements
• The radicalization and rightward shift of the Fifth Circuit Court, Judge James Ho, and judicial activism on abortion, immigration, gun rights, and free speech
• Israel’s ongoing assault on Lebanon within the context of the war with Iran, adding layers of humanitarian devastation and geopolitical maneuvering
• A crash course on shadow banking’s role in the world economy and why the sector’s complexity and lack of regulation is a disaster waiting to explode
• News updates on Trump administration strategies for ICE, airports, and the ongoing war with Iran, as well as sky-high oil prices and their global ramifications

The tone is a mix of analytical, urgent, and darkly humorous, consistently highlighting the through-lines: criminalization of dissent, emboldened right-wing courts, humanitarian collapse in the Middle East, and structural rot in economic and political systems.

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1. Prairie Land Antifa Trial—Details & Consequences

(Starting at 03:12)

Key Points

• The Trump administration won its first conviction in an Antifa "terrorism" case.
• 8 people were convicted for riot, conspiracy to use explosives, and providing material support to terrorists; one was convicted of attempted murder of a police officer (03:25–04:13).
• Evidence and prosecution centered on planning group chats, use of Signal, wearing black bloc, and possession of radical zines (07:51–12:47).
• Prosecution’s case made heavy use of defendants’ online discussions, especially around bringing firearms and “suppressive fire” (09:35–10:38).
• Legal precedent was set for using fireworks at protests as “explosives,” broadening future liability (32:43–34:33).
• "Material support to terrorism" charges are now broader, potentially criminalizing peripheral involvement (e.g., group chats, mere presence) (35:17–38:33).

Quotes & Moments

• Robert Evans:
  “Police … have the right to pull guns on whoever they want whenever they want. Pretty much.” (06:43)
• Garrison Davis:
  “This is not the first time the government has tried to use this sort of like, conspiracy against a large group of protesters. Notably, they tried to do this in Atlanta unsuccessfully.” (39:53)

Takeaways

• Admission of armed presence and online chat quotes (“I’m not going to jail, I’m bringing guns”) were pivotal in convictions.
• The trial’s use of Signal chat evidence and prosecution of “ideological proximity” to Antifa, SRA, and John Brown Gun Club indicate government willingness to target loosely-tied activists.
• Jury instructions (Pinkerton liability) allow for broad conspiracy allegations.
• The line between protest support and terrorism is increasingly blurred, making organizing riskier for left-wing activists.

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2. The Fifth Circuit Court & Judge James Ho—Conservative Judicial Revolution

(Beginning ~48:11)

Key Points

• Featured experts Michael Phillips and Steven Monticelli examine the evolution of the Fifth Circuit Court from a civil rights engine to a reactionary spearhead.
• Judge James Ho, an immigrant and former clerk for Clarence Thomas, is highlighted as an agent of “auditioning for the Supreme Court” through extreme opinions (72:49).
• The Fifth Circuit’s contemporary record is one of hostility toward reproductive rights (abortion decisions), LGBTQ+ rights (drag bans), free speech, and even labor rights.
• The court’s opinions have often been so radical that they’re frequently overturned by the conservative Supreme Court (74:07).

Quotes & Moments

• Leo Yu (expert guest):
  “[Ho is] trying to audition for the Supreme Court… create something that is, quite honestly, just not even sensible. … It’s just insane.” (72:49)
• Michael Phillips:
  "If he [Judge Ho] miraculously returned, Wisdom [a legendary civil rights judge] would not recognize the appeals court he spent so much of his life serving." (59:47)

Takeaways

• The right’s cliches about “liberal judicial activism” are now boomeranged: Ho’s and the Fifth Circuit’s rulings are openly ideological.
• The Fifth Circuit is a key venue for cultural war offensives against abortion, LGBTQ+ rights, and government regulation.
• The court’s decisions reflect and shape the shifting ground of American law at the intersection of politics, religion, and civil liberties.

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3. Israeli Escalation in Lebanon & the War with Iran

(Starting ~95:17)

Key Points

• Guest Ilya Ayub, in conversation with Dana Al Kurd, details Israel’s massive military escalation in Lebanon.
• Cites ongoing displacement (“at least 20% of Lebanon”) and intentional targeting of infrastructure, breadbasket regions, and civilian areas (96:16–103:16).
• Israeli policy is framed as “domination for domination’s sake,” with Israeli politicians making openly genocidal or “stone age” threats to Lebanon (99:31–102:32).
• Lebanon’s political/economic context: Already suffering extreme crisis, with a weak, externally-funded military and huge refugee populations; citizens experience extreme despair and disempowerment (106:40–111:25).
• Both Ayub and Al Kurd connect Israeli actions to longstanding impunity, U.S. support, and the existential costs to the region (128:34–133:41).

Quotes & Moments

• Ilya Ayub:
  “Despair is, I guess, one word to describe it. There’s definitely a sense of helplessness…There’s no such thing as an Iron Dome in Lebanon.” (106:40)
• Dana Al Kurd:
  “Genocide as a tool of conflict management.” (118:44)
• Ilya Ayub:
  “If Israel is not stopped in any way at this point, this will continue and there is no objective reason to believe otherwise.” (129:55)

Takeaways

• Israel’s campaign in Lebanon is part of a new, openly maximalist regional doctrine.
• The cost to ordinary Lebanese is devastating, compounded by the country’s economic and political collapse.
• The U.S. role is framed as essential for Israel’s impunity; international calls for accountability and changed policy are highlighted.

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4. Shadow Banking—Economic Collapse Explainer

(Beginning ~137:19)

Key Points

• Mia Wong delivers a crash course for non-experts on shadow banking—the massive, mostly unregulated financial sector that’s larger than the traditional banking system.
• Shadow banks include private equity, hedge funds, money markets, insurance companies, and other entities doing “banking” without regulatory oversight.
• Shadow banking is at the root of the 2008 financial crisis and, due to regulatory arbitrage and unchecked risk, is even more enormous and fragile today.
• The episode uses burger analogies to explain maturity transformation, liquidity, leveraging, mortgage-backed securities, and the proliferation of financial instruments disconnected from real assets.

Quotes & Memorable Moments

• Mia Wong:
  “These are the guys who blew up the economy in 2008... They took a mortgage and then did a bunch of bullshit to it in what’s called a securitization chain.” (152:07)
• Angela Yee (co-host):
  “Everything is fully reliant on this, like, stupid gambling bullshit, Emperors-wearing-no-clothes economy. If anybody points out that none of this is connected to a material reality, everything falls apart.” (194:22)

Takeaways

• Shadow banking is “betting markets with the entire world economy.”
• The 2008 crash was not a crime due to system design; most shadow banking remains legal and is systemically embedded.
• Today’s economic structure is even more reliant on shadow finance, with risk of collapse ever-present due to its complexity and opacity.

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5. U.S. Domestic: ICE, Airports, and the DHS Shutdown

(Starting ~202:07 and punctuated throughout)

Key Points

• Amid the DHS shutdown, Trump directed ICE agents (not trained for TSA roles) to airports, leading to confusion, minimal actual impact on security lines, and one high-profile arrest and deportation (213:14–215:10).
• Trump himself compared his ICE deployment idea to the “discovery of the paperclip” (210:04), showcasing the often-absurd justifications for policy.
• Congressional negotiations over reopening DHS continue, with “no men in women’s sports” and other culture war planks folded into the discussion.
• ICE’s expanded airport role is seen as largely symbolic, but the public racialized policing effect is real.

Quotes & Moments

• Garrison Davis:
  “ICE agents cannot actually do the job of TSA, since they do not have the training nor the certification required to do so.” (213:40)
• Robert Evans:
  “There was never any chance of this helping anything. This is only going to be more of a pain in the ass for people at airports...” (214:56)

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6. U.S.-Iran War & the Oil Price Shock

(From 218:28 onward)

Key Points

• The Iran war enters its second month, with the closure of the Strait of Hormuz and oil prices reaching crisis levels (~$175/barrel).
• The U.S. Navy’s options for breaking the blockade involve high risk of catastrophic casualties; administration is desperate for off-ramps and is manipulating market messaging (225:10–226:48).
• The collateral effects: widespread shortages and economic collapse across South and Southeast Asia, with businesses shuttered, rationing, and days off work becoming common (230:14–234:17).

Quotes & Moments

• Robert Evans:
  “You have a very narrow waterway through most of this... it’s really easy to mine that path.” (222:34)
• Mia Wong:
  "[In Asia] they literally can’t afford to keep the economy running." (231:54)
• Mia Wong:
  "All of these countries are unbelievably reliant on oil, natural gas... This crisis is just going to continue as long as Trump keeps this war going." (234:17)

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7. The Specter of Mass Deportation

(From 236:55)

Key Points

• Gregory Vivino, former DHS commander, revealed in a NYT interview he had a “master plan” to deport 100 million—far beyond even the total undocumented population.
• The administration’s drive toward ethnic cleansing is now voiced openly, underlining a schism between “true believer” white nationalists and the business-faction GOP that understands the economic destructiveness of such a plan.
• New DHS Secretary Markwayne Mullen gives tepid signals of reform, but the political reality signals continued instability and draconian possibilities.

Quotes & Moments

• Garrison Davis:
  “What this master plan actually looks like or what it included, also not expounded upon... unclear.” (240:11)
• Mia Wong:
  “This is like most of the non-white people in the U.S. ... people who are just, you know, people here like me.” (239:55)

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Notable Timestamps for Segment Hopping

• Prairie Land Antifa Trial: 03:12–45:31
• Fifth Circuit / James Ho focus: ~48:11–93:59
• Lebanon/Iran war segment: 95:17–134:29
• Shadow Banking Explainer: 137:19–201:50
• U.S. news/ICE/Airport segment: 202:07–247:28

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Recurring Themes & Final Notes

• The criminalization of dissent and expansion of state prosecutorial power
• The rightward lurch of American courts, with consequences for civil liberties and vulnerable populations
• Crisis and collapse—legal, economic, humanitarian—as symptoms of underlying systemic rot
• Dark humor and exasperation at systemic absurdities and failures

Quote of the Week

“Everything is fully reliant on this, like, stupid gambling bullshit... If anybody points out that none of this is connected to a material reality, everything falls apart.”
— Angela Yee (194:22, shadow banking segment)

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For Listeners:

This episode delivers critical context for the week’s headlines—protest repression, judicial extremism, collapse in Lebanon, shadow banking’s dangers, and much more. Whether you want granular details on activist trials, war, courts, or financial doom, this sprawling episode is an indispensable chronicle of collapse and crisis.

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[End of Summary]

Transcript

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[Robert Evans]

Hey everybody, Robert Evans here and I wanted to let you know this is a compilation episode. So every episode of the week that just happened is here in one convenient and with somewhat less ads package for you to listen to in a long stretch if you want. If you've been listening to the episodes every day this week, there's going to be nothing new here for you, but you can make your own decisions.

[Garrison Davis]

This is It Could Happen Here, a show about things falling apart. I'm Garrison Davis. I'm joined by Robert Evans to discuss the Prairie Land Trail trial.

[Robert Evans]

Yay.

[Garrison Davis]

This month, the Trump administration got their first conviction in an antifa terrorism case. On Friday, March 13, eight people were convicted by a federal jury on charges of riot, conspiracy to use and carry an explosive, and providing material support to terrorists. One of the defendants was convicted of attempted murder of a police officer and another person was convicted on two counts of concealing documents, bringing the total number of federal defendants to nine. Originally, this federal case had way more defendants, but last year seven of them pleaded guilty to providing material support to terrorists, four of whom were later called to testify for the prosecution during the trial.

[Robert Evans]

Have they gotten sentenced yet? The folks who pled out?

[Garrison Davis]

No. They are going to be sentenced later this summer along with all of the defendants that were convicted.

[Robert Evans]

Gotcha.

[Garrison Davis]

Though their sentence will be a maximum of 15 years, which is shorter than the defendants who were convicted.

[Robert Evans]

Yeah, yeah.

[Garrison Davis]

The Prairie Land Defendants Support Committee did ask me to read their names. The defendants are Ainz Soto, Liz Soto, Savannah Batten, Megan Morris, Autumn Hill, Mari Rueda, Benjamin Song or B. Song, Zachary Evitz, and DEZ Estrada. The prosecution tried to argue that this was a coordinated attack on an ICE facility in Prairieland, Texas, while the defense argued this was a noise demonstration protest outside of this detention facility last summer on the night of July 4, after protesters threw fireworks and vandalized property, DHS personnel called local police for assistance. One officer arrived, drew his handgun and yelled stop. At a person in all black clothes who was running away. One of the defendants, B. Song, then yelled, get to the rifles. Before firing toward the officer with an AR15 hitting him in the neck. Song fired 11 times. The officer returned fire three times. Song then fled the scene. Most of the defendants were arrested in the days after the attacks, some that night near the facility. Though Song camped out hiding in the woods overnight and evaded capture for 11 days with the help of others. Many of those who assisted Song evade capture after the shooting pled guilty to providing material support to terrorists. On the first day of this trial, the judge declared a mistrial because one of the defense attorneys wore a shirt featuring civil rights leaders. A week into the trial, U.S. district Court Judge Mark Pitman ruled that defense attorneys could not argue that the defendants, including the accused shooter, were acting in self defense or the defense of others against unlawful force just because the officer had already drawn his handgun before Song fired. The prosecutors compared this to Waco and Judge Pittman ruled that the officer drawing and pointing his handgun at a fleeing suspect does not qualify as, quote, excessive as a matter of law because the officer did not actually use deadly force or shoot first.

[Robert Evans]

Yeah, that makes sense. Like if this were a civilian on civilian situation, the fact that he had drawn his gun, especially in Texas, would have been enough to at least argue self defense. But absolutely, police officers have the right to pull guns on whoever they want whenever they want. Pretty much. So yeah.

[Mia Wong]

Yep.

[Robert Evans]

Cool.

[Garrison Davis]

In court, the government argued that based on the situation at the protest, that it was reasonable for the officer to decide to draw his handgun because there was crimes being committed, property damage, the fireworks, even if he did not witness fireworks as he pulled up to the scene. Now headlines have framed this story as protesters being convicted of terrorism for wearing black clothes or possessing radical political writing, also known as zines. There is like a kernel of truth to these statements, but they're designed to serve primarily as clickbait rather than useful information. So let's take a closer look at these claims.

[Robert Evans]

Sure.

[Garrison Davis]

Let's start by getting into the action planning. So this action was originally planned on the encrypted messaging app Signal primarily in a group chat called 4th of July party.

[Robert Evans]

Okay.

[Garrison Davis]

The plan was also discussed during an in person meeting the day before the action, referred to during the trial as a gear check. Participants in the planning chat agreed to wear black block and bring armor and rifles. Song advertised the action in a larger group chat of dozens of quote unquote trusted individuals. The event was characterized in this chat as a low risk noise demonstration involving fireworks. A flyer was sent to this larger chat reading Share with Trusted Folks Only do not post mask up be loud unquote. According to cooperating witness Susan Kent in the fourth of July Party Signal chat, when asked about bringing guns, Song stated I'm not going back to prison. I'm not going to jail. I'm bringing guns, unquote.

[Robert Evans]

Okay. That's a terrible thing to have in writing. Boy. Okay, great.

[Garrison Davis]

This sentiment was also expressed at the gear check meeting on July 3, where defendants discussed bringing guns. And Song repeatedly stated that they would be bringing guns because he would not be, quote, unquote, going to jail. They talked about guns as a deterrent. Yeah. They talked about how in previous instances, the presence of guns deterred police from engaging with protesters. And this is how the presence of guns at the protest was largely framed in these meetings and chats. It does not look good in writing in a court case, though.

[Robert Evans]

Yeah. I mean, this is what the Elm Fork John Brown Gun Club had done, like sweep defenses and stuff where they'd shown up armed.

[Garrison Davis]

That incident was brought up. Yeah, that was specifically referenced.

[Robert Evans]

It had, in fact, worked that way more or less. I mean, there's a number of things to drill into here, but one of the issues is just while that's a thing people have used firearms for and have done so in a way that like, worked in the past, obviously, which is what they were referencing. The problem is that you, you can't ever lose sight of the fact that like, a gun is a gun. And if you're bringing a gun into

[Garrison Davis]

a situation, there's potential for that gun to be used.

[Robert Evans]

There's potential for that gun to be used. And if you're bringing that gun into a situation around a police station, the odds that you will use that gun in a way that is not going to cause a life ruining legal nightmare for you and everyone else.

[Garrison Davis]

Yeah.

[Robert Evans]

Are. Are a lot lower. That's. That's a real issue. Yeah.

[Garrison Davis]

Also at this gear check on the third song proposed to free detainees using, quote, unquote, suppressive fire.

[Robert Evans]

Oh, my God.

[Garrison Davis]

This idea was shut down by other attendees, according to Susan Kent, who testified after entering a guilty plea. Kent testified that after looking over photos of the facility, Song said, quote, this is as easy as it's going to get. We can take the place and free the people inside. Oh, boy. Using, quote, unquote, suppressive fire. This idea was met with, quote, unquote, general disagreement, according to Kent.

[Robert Evans]

Yeah, of course.

[Garrison Davis]

Also saying that it was not seriously planned for or discussed. The support committee writes that Kent also testified that the group, quote, discussed stealing U Hauls to move free detainees, but this did not have popular support. Defendant Autumn Hill asked, do we bring our guns? Song replied, yes, I'm not getting arrested. Unquote.

[Robert Evans]

Yeah, just a lot of really horrible things to have read out in a Courtroom just. Yep.

[Leo Yu]

Cool.

[Robert Evans]

Okay.

[Garrison Davis]

On signal, song shared a YouTube short about suppressive fire. Another defendant, Rueda, wrote that she didn't want a quote, unquote fed post.

[Robert Evans]

Yeah.

[Garrison Davis]

Someone else wrote that rifles at the action may increase risk. Defendant Evitz sent a timeline for the actions that day, writing things heat up after sunset. Royer wrote, quote, if people inside get rowdy, people in this chat would be charged for conspiracy. Question mark. And then after the 4th of July shooting, someone messaged quote, please delete signal chats. Chats still on phone even if removed from groups, Unquote.

[Robert Evans]

Yeah.

[Garrison Davis]

According to support committee notes, some signal messages were recovered from phones using Apple's internal notification system. Though even though signal had been removed.

[Robert Evans]

Yeah.

[Garrison Davis]

Incoming messages were preserved in the internal memory on the phone. Outgoing messages were not preserved because there's no notification system for outgoing messages. And you can set your settings on signal to not display the message in notifications. And it seems like that was not the case for these messages that were taken from defendants phones.

[Robert Evans]

Yeah, and this is a known, I mean the, just the, the fact that having notifications on with signal is a privacy issue has been known for a while.

[Garrison Davis]

But yeah, two defendants, Liz Soto and Savannah Batten, were neither in planning chats nor attended the gear check. But all the defendants who attended the protest did carpool together in two vehicles and brought a total of 11 firearms. Body armor, individual first aid kits, and all these were presented as government exhibits. I'm going to quote the Department of Justice right up about this case. Quote, evidence at trial revealed most of the antifa cell involved in the Prairie Line attack looked to Song as a leader. Song acquired firearms that were distributed to co defendants and recruited members at gun ranges and combat sessions they conducted. Unquote.

[Michael Phillips]

Yep.

[Robert Evans]

I just as a general rule, like because the potential consequences of having firearms in a protest are so high, if you are showing up at a protest or organizing one and people are talking about bringing them, it behooves you to pay close attention to how they talk about them. And if someone is talking about for example suppressive fire, that's not something that is really relevant to a defensive shooting in a legal situation. That's like a combat thing. Like very rarely do self defense shootings involve suppressing fire. You have to be very, very careful. Yeah, and this is like a judgment thing. Like if you hear people talk, talking about guns who are going to be bringing firearms to a protest or another event and they are talking in a way that sounds as if they are like planning or eager to shoot it out with the police or right wing or with anyone. That's a thing to be very wary of. That's a real warning sign. Yeah, that's a real red flag.

[Garrison Davis]

Yeah, that's a real red flag. The defense argued that when Song shot at the officer, Song was using suppressive fire, claiming that Song aimed for the ground and the officer was perhaps struck by a ricochet. We don't know if that is true.

[Robert Evans]

No.

[Garrison Davis]

And there really is no legal precedent for arguing suppressive fire in this way

[Robert Evans]

in a self defense shooting. No.

[Garrison Davis]

If you're shooting the direction of someone.

[Robert Evans]

Yeah.

[Garrison Davis]

They absolutely can start shooting back. Even if absolutely fire is, is intended as being quote unquote suppressive. Right. Like there's, there's really no legal precedent for, for arguing in this way.

[Robert Evans]

And from a legal standpoint, if you were saying I had to shoot at someone in immediate self defense and then you said, but I wasn't actually aiming at them, I was just trying to suppress them that immediately, like, I mean, I don't think they were ever going to be able to argue self defense because this was a cop. But if this had not been, if this had been like you know, a right wing counter protester or something, the fact that you're saying that you were like shooting to try not to hit them is something that can get you in trouble. That's an extremely dangerous thing from a legal standpoint to talk about.

[Garrison Davis]

Especially if you're the one like initiating the use of deadly force.

[Steven Monticelli]

Yes.

[Robert Evans]

If you have. Now if they, if a group of people start shooting at you and you are firing and you're just trying to keep whatever that you're going to say because they've started shooting at you, but like this person started shooting, like just from a legal standpoint, this is a nightmare for the defense.

[Garrison Davis]

Yeah.

[Robert Evans]

From the jump. Yeah.

[Garrison Davis]

Some of the defendants attended a daytime protest outside of this facility earlier on July 4th. And after which they then reported back to fellow defendants details regarding the facility's security prior to this nighttime action. I think it's time for a quick break and then we'll return to discuss the antifa Terrorism cell aspect of this case.

[Robert Evans]

Great. Well, I hate all of this so far. Garrison. Here's some ads. I guess we're back.

[Garrison Davis]

So let's talk about quote, unquote, antifa.

[Robert Evans]

Yeah, let's talk about quote unquote antifa.

[Garrison Davis]

The government argued that the defendants were members of a quote unquote North Texas antifa cell. The indictment describes antifa as a quote, militant enterprise made up of networks of individuals and small groups, primarily ascribing to a revolutionary anarchist or autonomous Marxist ideology which explicitly calls for the overthrow of the United States government, law enforcement authorities and the system of law, unquote. So basically, they view antifa as left wing, anti authoritarians. Right. That's how we can kind of collapse the use of this term down into a, into like a single sentence. It's left wing anti authoritarianism. Though the defendants never actually organized altogether under the antifa name, the prosecution argued that they were linked through a triple Venn diagram of the Socialist Rifle association, the John Brown Gun Club, and the Emma Goldman Book Club. And this all converged on, quote, unquote, direct militant action. I'm assuming people are familiar with the SRA or the John Brown Gun Club in some way. Yeah, yeah. The Emma Goldman Book Club was a local zine distributor and publisher that also put on community events from a radical, anti capitalist, usually anarchist friendly perspective. Emma Goldwyn obviously being an anarchist.

[Robert Evans]

Yep. And like the fact that obviously these three organizations aren't actually tied together in any sort of like, like they're trying to frame it as like, you know, an Al Qaeda and an Al Qaeda affiliate type deal. Right. Which is not accurate to how these organ organization's work or to what's going on here. But I'm not surprised they went with this line of argument.

[Garrison Davis]

I mean. Yeah. The defendants had connections to these groups, Right?

[Robert Evans]

Sure. Yeah.

[Garrison Davis]

And because these groups have an ideological underpinning that can be seen as being quite similar in some ways.

[Robert Evans]

Yeah.

[Garrison Davis]

They're. They're viewing that as. As part of the connection that connects the individuals.

[Robert Evans]

Yeah.

[Garrison Davis]

Who were involved in these sorts of like, organizations or community events.

[Mia Wong]

Yeah.

[Robert Evans]

And I'm not surprised that's how they tried to argue it.

[Ilya Ayub]

Sure.

[Garrison Davis]

A sticky notepad found at the Soto residence contained passwords for the Emma Goldman Book Club Twitter account and an antifa Dallas Fort Worth Twitter account, which prosecution used as evidence linking defendants to, quote, unquote, antifa. The government also called on David Kyle Schidler as an expert witness to testify about antifa.

[Robert Evans]

Yeah.

[Garrison Davis]

Schidler is a member of the center for Security Policy, an SPLC designated hate group. He also helped draft the definition of antifa given in this case and used that definition while testifying in front of the Senate last year. The defense missed a deadline to challenge the prosecution's antifa expert qualifications, which would have needed to be filed as a pre trial motion as opposed to an objection during the trial. Prosecutors also cited Trump's antifa executive order. Despite this order Being signed months after the prairieland incident. And the prosecutors also claimed that the international antifa defense fund contributed over $5,000 to the Prairieland defendants. Givesendgo crowdfunding page. So much of this case was spent arguing over whether the defendants were, in fact, antifa and what that even means. Like, what does it mean to be antifa? And if that's actually relevant to the charges that they were facing. And by the end of the trial, it became more clear that the defendants weren't exactly being prosecuted for being members of antifa. Rather, the government asserted that their proximity to this idea of antifa provided evidence to their motive and preferred tactics. Quoting the support committee courtroom notes, quote, the government's strategy was to display zines, stickers, pamphlets, flags and other political materials. Anarchist, anti fascist, anti ice, animal liberation. And argued that this shared ideology proves conspiracy and motive. FBI case agent Casey Bennett testified that the materials, quote, show a group of people sharing an ideology and that this quote might lead us to intent behind the attack and shows a conspiracy, unquote. Towards the end of the trial, judge Pittman asked the prosecution, quote, is it necessary to prove this stuff about antifa? The support committee courtroom notes say that. The prosecution responded by saying that antifa ideology, particularly black block, was how the group operated. The judge pressed, quote, whether it's antifa or the methodist women's auxiliary, why does it matter? Yep. The prosecution argued that they took, quote, unquote, direct action against the ice facility and argued black block and antifa ideology were central to how the alleged attack was carried out, unquote.

[Robert Evans]

Well, that's. Yeah, that's positive, at least, I guess.

[Garrison Davis]

The government described black block, for the purposes of this case as, quote, dark clothing with head and face coverings that concealed their identities, Designed to hide each individual's identity, but also to aid and abet those members engaged in illegal acts by making members indistinguishable from one another to law enforcement, unquote. The jury was shown clothing from all the defendants as evidence, as well as body armor and a, quote, unquote, resist fascism flag. Now, all this does raise the question about whether this prosecution is against the defendant's political ideology or the specific criminal acts of throwing fireworks or shooting at a police officer. Rather than being convicted of being members of antifa, the terrorist group, Something that still doesn't really have legal precedent. The prosecutors argued that the antifa ideology, left wing, anti authoritarianism, played a role in inspiring the defendants formed the basis of political affinity that brought this collection of individuals together and relate to a collection of security practices, subcultural practices and associated tactics which were employed before, during and after the criminal acts related to the noise demo quote unquote. OPSEC practices like, you know, black block or using signal were used as evidence. Yeah. That there was some sort of conspiracy at foot.

[Robert Evans]

Sure. Yeah. I mean, yeah, that makes sense from a prosecutorial standpoint. Right. These people are talking about like just the fact that there are zines talking about the purpose of black bloc and people are having a planning meeting ahead of time where they're like checking their gear and talking about how they're going to come in a block, like. Yeah, yeah, that's, that's, that's unfortunate. Yeah, I can see why the prosecution went with that line of argument.

[Garrison Davis]

But how does this relate to like terrorism? Right, because.

[Robert Evans]

Right.

[Garrison Davis]

Conspiracy and terrorism are different things.

[Robert Evans]

Yes.

[Garrison Davis]

So to get an idea of the government's own preferred language regarding antifa terrorism, I'll quote from the guilty plea drafted by the government for a former defendant turned government witness. Quote, the terrorism was calculated to influence and affect the conduct of government by intimidation or coercion. Co conspirators adhered to an antifa anarchist ideology and organized cells or affinity groups. Co conspirators began planning direct action at Prairieland. Co conspirators agreed to dress in black bloc to provide cover for each other to commit crimes, including concealing the escape of those who committed destruction of government property, unquote. So this is how it relates to like the actual legal definition of terrorism. Right. Which is certain criminal acts intending to change or influence government policy by intimidation or coercion. Right. That's how the government uses the term terrorism.

[Robert Evans]

Yeah.

[Garrison Davis]

And this, this, this section of the plea written by the government shows how the government is self asserting the terrorism that happened at Prairieland.

[Robert Evans]

Right.

[Garrison Davis]

There's been a lot of headlines talking about the role of zines at this trial. And zines did play a two part role. Prosecution did argue that the presence of insurrectionary zines is indicative of some alignment with antifa. Even if the possession of these zines itself is not a crime. The government's antifa expert testified that owning political texts does not necessarily indicate group membership or personal allegiance to an ideology. Quote, just because I own a copy of Mein Kampf, does that make me a Nazi? If I own Dos Capital, does that make me a Marxist? Unquote? Sure. Stunning. Stunning. First example given, given here.

[Robert Evans]

Yeah, Interesting call, but base. I mean, but also like a valid argument.

[Garrison Davis]

Yeah, but this is true, right?

[Robert Evans]

Yes. And this is, I've seen people framing the the verdict as having zines or whatever, like it's an act of terrorism. And that's not what was decided here.

[Garrison Davis]

No. What's happening here is a bit more complicated and harder to explain.

[Mia Wong]

Yes.

[Garrison Davis]

The other relevancy of zines to this case relates to the concealing documents charges against Des Estrada and his wife, Mari Riuda, based on transporting a box of political zines from his wife's house to a friend's house in Denton, Texas. The government claims that Roeda called Dez from jail on July 6, instructing him to conceal evidence. Now, we don't have access to a full transcript of this call. The full call was given to the jury, but sections of it were read or listened to in court. The most detailed account of the call segments played in court come from notes taken by the Prairieland Defense Support Committee. The actual evidence exhibit is not yet available to be purchased on pacer. Not sure if it will be or if that'll just be after sentencing, but I tried to actually get the transcript of the call, and it was not available. DEZ told his wife that he already talked with her mom, who she had previously called the day before. Ruida talked about feds confiscating property. FBI Special Agent Whitworth said in his opinion, RA Was concerned about the evidence. Rueda then voiced concern for her car parked at the 2400 block of 56th street, which had her phone stored inside. This was the staging site. Before she went to the action, she then instructed DEZ to, quote, unquote, tow it. My phone is in the back. Do what you gotta do. Just tow it. Unquote. The support committee wrote that, quote, prosecution replayed this section, characterizing it as Rieda trying to get rid of evidence. Raeda says to, quote, unquote, retrieve her items from the vehicle, does not refer to her items using the word evidence and does not say hide, destroy, or conceal. Des never actually got to this car or the phone. He explained that the vehicle would be repoed. But Royata also said in this call, quote, move whatever you need to move in the House. The support committee wrote that, quote, prosecution argued this meant moving evidence. Defense noted she was talking about pets at the time, unquote. On the call, Des mentioned that he had already been at the house and replied, quote, unquote, were good in reference to moving stuff from the house. The defense questioned how they could have conspired. Out of order. Right. Because the government claims there was a conspiracy to conceal documents. But DEZ here said that he moved things before he actually got on this Phone call with his wife. The FBI answered that DEZ just had already acquired the necessary information to act, just not directly from his wife. Des was found guilty of, quote, corruptly concealing a document or record by transporting a box containing numerous antifa materials such as insurrection planning, anti law enforcement, anti government and anti immigration enforcement documents and propaganda, intending to conceal the box's contents and impair its availability for use in a federal grand jury and federal criminal proceedings, unquote. That's from the doj. He and his wife Rada were found guilty of conspiracy to conceal documents and other objects that would implicate Rada in the riot and shooting at the Prairieland facility, also according to the Department of Justice. So basically, this was an evidence tampering charge, a concealing evidence charge. The actual presence of the zines was not the crime. But the government argued that the zines themselves were evidence or that DEZ suspected they could be evidence, and that's why he moved them from his wife's house to this other location. We're gonna go in one more break and then return to discuss two more charges. Okay, we're back. Nine of the counts, count one, two, four and five through ten cited Pinkerton versus United States, 1946.

[Robert Evans]

Okay.

[Garrison Davis]

The judge explained this to the jury by saying that a defendant can be criminally liable for the offenses committed by another co conspirator if the offense was, quote, reasonably foreseeable and committed in furtherance of the conspiracy. With the judge writing in jury instructions, quote, a defendant can be found guilty and held criminally liable for an offense under Pinkerton co conspirator liability. Even if the defendant was not charged with conspiracy, it is not required that the conspiracy agrees to commit or facilitate each and every part of a substantive offense that is in furtherance of the conspiracy, a defendant must merely reach an agreement with the specific intent that the underlying criminal objective be achieved by the conspiracy, unquote. Early in the trial, prosecution argued that Song firing on the officers was, quote, unquote, reasonably foreseeable based on the planning of the action and previous statements made by Song. But this Pickerton liability also applied to the other charges, including riot material, supported terrorism and the explosive charge. The jury found all defendants that were charged guilty of counts one, two, three, and four. That's riot material support and two explosives charges, but did not find the other defendants besides Song guilty of attempted murder or discharging a firearm. Using the Pinkerton co conspirator liability, the prosecution wanted the other individuals at the protest to be found guilty of the charges. Of attempted murder using the liability. And the jury did not do that. Let's talk about two of the charges that now carry some worrying potential to be used against protesters in the future, based on the precedent that this case sets. First, the conspiracy to use and carry an explosive and using and carry an explosive during a riot. The only quote, unquote explosives at this noise demonstration protest were fireworks. And the judge even confirmed that. It was established that the fireworks caused no damage to the ICE facility.

[Mia Wong]

Right.

[Garrison Davis]

Yet Steven Brennaman, an ATS explosives special agent, testified that fireworks meet the statutory definition of explosives under 18 USC section 844ij because the fireworks contain gunpowder as defined in the statute. This could have some pretty wide reaching implications. A lot of protests use fireworks. This was a protest on 4th of July, a day full of the use of fireworks. Robert and I have been to a protest, covered a protest in 2020 outside of a federal government building that also had a lot of fireworks and fireworks shot towards the building.

[Robert Evans]

Yep.

[Garrison Davis]

If that happened now, it's possible that people at this protest could be charged with this conspiracy to use and carry an explosive.

[Robert Evans]

Yeah, yeah. And I mean, they've clearly been wanting, arguing for this ever since 2020. Right. Like fire. Because it wasn't just. Portland wasn't the only place where people were using fireworks. Generally people were using fireworks as kind of a response to the police, using flash flashbacks.

[Mia Wong]

Right.

[Robert Evans]

Like it was a, it was a force equalizer. Both were used quite often. But, you know, like, I had so many of those fucking things blow up in my face and they never did. Like, these are not bombs. These are not pipe bombs. Like it's not fun to have them blow up right next to you. But it's. These are not like deadly explosives.

[Garrison Davis]

Yes, agreed. And even the agents investigating this case mailed materials from these fireworks for testing using regular FedEx, not labeling them as possibly dangerous or explosive. And the government argued that it was because the amount in the FedEx package was just so small they didn't need to label it as, as being dangerous.

[Robert Evans]

Yeah.

[Garrison Davis]

Now lastly, I need to discuss count two. It's providing material support to terrorists. This is 18 USC 2339. This is the charge that a lot of people are talking about when they're mentioning. Yeah, someone has been convicted of terrorism for xyz, for, for using signal, for wearing black block, for possessing zines. They're referring to this charge. Now this statute has two sections. Section B refers to knowingly attempting to, conspiring to, or actually providing material support or resources to A designated foreign terrorist organization. This is not how the government used this statute.

[Robert Evans]

Right.

[Garrison Davis]

They're not considering antifa. A foreign terrorist who organization. For the purposes of this case. That's not how we're using this. The defendants were charged with section A, alleging that they provided and attempted to provide material support and resources and did conceal and disguise the nature of their material support and resources, including property, services, training, communications, equipment, weapons, explosives, personnel, including themselves, and transportation, knowing and intending that they were to be used in preparation for and in carrying out an offense identified as a federal crime of terrorism or carrying out the concealment of an escape from an offense identified as a federal crime of terrorism. That's a lot.

[Robert Evans]

Yeah, that's.

[Garrison Davis]

That's a long. A long sentence. This is certainly a very confusing charge.

[Robert Evans]

Yeah.

[Garrison Davis]

Now, this statute lists at least 28 possible terrorism offenses. Now relevant to this case are 3.18usc844f, which is maliciously attempting to damage government property by means of fire or an explosive. For the purposes of this case, that is throwing fireworks at a building, 18 USC 1361, that's willful depredation against any property of the United States exceeding $1,000. For the purposes of this case, this would be damaging government property in other ways, like slashing tires, graffiti, that sort of thing.

[Ilya Ayub]

Right.

[Garrison Davis]

And finally, 18 USC 114, killing or attempting to kill an officer or employee of the United States. That's pretty self explanatory.

[Robert Evans]

Yeah.

[Garrison Davis]

So the government accused the defendants of providing material support in furtherance of committing these three crimes of terrorism. Even if each individual defendant themselves did not actually commit one of these three crimes. To quote the jury instructions, quote, the government does not have to prove all of these to you for you to return a guilty verdict on this charge. Proof beyond a reasonable doubt on one is enough.

[Robert Evans]

Yeah.

[Garrison Davis]

Unquote. So the jury does not need to find proof that all of these three terrorism offenses were committed, that the explosives charge, the destruction of government property charge, or the attempted killing charge. They just need to find proof beyond a reasonable doubt that material support was provided for one of these. Part of what makes this charge kind of dangerous is that we don't know which terroristic crime or crimes the jury found sufficient evidence for, or if they used different offenses for different defendants. Nor do we explicitly know what the jury thought qualified as material support. It could have been, you know, driving people to an action, mere presence at an action, wearing black clothes, providing money to buy fireworks. All those could be considered material support.

[Robert Evans]

Sure.

[Garrison Davis]

But because of how the jury just rights guilty on this charge, we don't actually know what the specific justification they used to find this to be true.

[Robert Evans]

Right.

[Garrison Davis]

Because the discharge is so. Is so broad and can contain a lot of things that qualify as material support, including just being merely present at an action. Like personnel can be material support in furtherance of a federal crime of terrorism.

[Ilya Ayub]

Right.

[Garrison Davis]

So wearing black block at an action where no crime happens would not constitute terrorism. But wearing black clothes at a protest where someone does an ideologically motivated crime of terrorism could be seen as materially supporting that crime or concealing the escape of the person who committed that crime. I want to quote from the judge's instructions to the jury regarding the First Amendment. Quote, constitutionally protected speech can be properly used as evidence to prove a defendant's motive, intent, and knowledge to commit the offense or further the unlawful purpose of any jointly undertaken criminal activity. Stated another way, if a defendant's speech, expression, or associations were made with the intent to knowingly provide material support or resources to be used to prepare for or carry out a violation of federal law or to carry out the concealment of an escape from such a violation, then the First Amendment would not provide a defense to that conduct. Unquote. So it is possible now, using this case as precedent, if you're present at a protest before someone commits a serious crime and you have a tangential link to that person, you could also face similar charges.

[Robert Evans]

Yeah.

[Garrison Davis]

If you're in a group chat with someone and then they commit a crime, you could face similar charges. This is not the first time the government has tried to use this sort of like, conspiracy against a large group of protesters. Notably, they tried to do this in Atlanta unsuccessfully. But I think it's worth noting they were only unsuccessful on their RICO charges because of procedural error, not because of actual evidence argued in court. It's that the prosecutor in that case did not actually have justification or the legal justification to bring this charge. So we never actually saw this get argued out in front of a jury and find the jury's verdict. But this is a part of an ongoing strategy the prosecution has done against protesters the past few years, and in this case, successfully.

[Robert Evans]

Yeah, it's also, like, as bleak as this is, and this is very bleak, this is not the final say on how any case like this will be adjudicated everywhere. This is a case in Texas. Right. Like, this is not.

[Garrison Davis]

Yes.

[Robert Evans]

This isn't the fucking US Supreme Court. It's not even the Texas Supreme Court. Right.

[Garrison Davis]

Yeah.

[Robert Evans]

Not to minimize how fucking awful this is, but this does not mean this is how Cases like this will be adjudicated every time they come to court everywhere in the U.S. yes.

[Garrison Davis]

And the vagueness of the material support charge is like a double edged sword. Right. One, it can be used in cases like this. And we don't actually know how they were exactly able to successfully argue that, because we don't know which specific federal offense of terrorism the jury found material support was provided for, or if it was multiple offenses. Nor do we know exactly which things the jury found constituted material support. But because we don't know these things, that means when prosecutors try to argue this charge again in the future, they kind of have to start from the ground floor all over again. It's harder to apply this exact precedent because the specific things that constituted material support and the specific crime that material support was provided for are sort of ambiguous. But the vagueness of this charge certainly leads to a lot of confusion. And you can now look at this case and, and see that, you know, legal possession of firearms or firearms training and possession of political paraphernalia could bolster ideological links between you and defendants, which could be used as evidence for a charge like this. Right?

[Robert Evans]

Yep.

[Garrison Davis]

For, for conspiracy charges. And, and that obviously is worrying. Now, a song faces a minimum penalty of 20 years, a maximum of life in prison. Other defendants of Prairieland face sentences ranging from a minimum of 10 years to up to 60. The husband convicted of concealing documents faces up to 40 years in prison. And those who pled guilty face a sentence of up to 15 years in federal prison, though their cooperation may lower that. Another man faces charges for evidence tampering because he allegedly removed Prairieland defendants from discord chats last year. But this is a state charge which will be going to trial later in April.

[Robert Evans]

Yeah, that'll be interesting to watch, I guess. Yeah. This is bleak. This is extremely worrying. That's part of the point is to scare people, to make people feel like they can't trust other activists, to make people scared, to organize, to make them scared, to be in group chats. And yeah, there's very real reason to be concerned as a result of this. However, none of this should be seen as like the final word on all of this stuff. And this certainly is not as simple as just having a zine or wearing black is terrorism. Now, that's not what was adjudicated here.

[Garrison Davis]

No, these things do all relate to, or they're trying to be connected to, you know, actual crimes which did occur.

[Robert Evans]

And that's certainly the goal, by the way, that the right has. But that's not what they've achieved quite yet.

[Garrison Davis]

I mean it's definitely a way to try to scare people out of organizing in the sense that, yeah, you know, you cannot be found a terrorist just by calling yourself like antifa to just, just by being antifa alone by yourself. Yeah, you're not going to be a terrorist. The same way you can't be put in jail just for being a Nazi. Right, Right. But if you are part of a Nazi group chat where you're planning an action and then a Nazi does something at the, at the action, like shooting a power substation, right. Then that Nazi and the other Nazis that he's organizing with, you know, could face terrorism charges. That, that is how those sorts of like cases work. And a very similar thing is being done here. It's, it's not the actual like political ideology necessarily at trial, but organizing with other people in furtherance of a political ideology is what the government is trying to suppress.

[Mia Wong]

Yep.

[Robert Evans]

Cool. Well, I don't have anything else to add at this point, you know.

[Garrison Davis]

No. Wayne will certainly cover this once sentencing happens later this year in June.

[Robert Evans]

Be careful. And if you're in a group chat with somebody who keeps writing shit that you're like, wow, that would be a terrible thing to hear read back in court, really reconsider staying in a group chat with that person. Just be wary about what you say and what other people say to you online. Not just because like of court stuff. Because if somebody is being incredibly reckless with the things that they are putting, putting down in writing, they're probably being reckless in other areas. Just be careful, you know folks, be careful.

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[Mia Wong]

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[Michael Phillips]

I'm Michael Phillips, an historian and the author of a book about racism in Dallas called White Metropolis and the co author with longtime journalist Betsy Freehoff of a history of eugenics in Texas called the Purifying Knife.

[Steven Monticelli]

I'm Steven Monticelli. I'm a journalist who specializes in covering political extremism and far right Internet culture for the Texas observer, the Barbed Wire and other publications. Today we'll be talking about the fifth Circuit and we'll start with a man named James Ho who on what might have been the biggest day of his judicial career so far couldn't have picked a creepier setting.

[Michael Phillips]

The 52 year old's legal career has rocketed forward at light speed. Born in Taiwan and a graduate of Stanford, he signed up as an attorney for the white shoe law firm Gibson Dunn in California. In 2000, at age 27, he joined a high powered legal team that forever shaped the history of the United States.

[Public Investing Ad Host]

From NBC News in Washington, this is MEET the Press with Tim Russert.

[Steven Monticelli]

Our issues this Sunday, 36 days after the election, Al Gore ends his campaign.

[Robert Evans]

For the sake of our unity as

[Steven Monticelli]

a people and the strength of our

[Robert Evans]

democracy, I offer my concession.

[Mia Wong]

George W. Bush will be the 43rd president of the United States. I'm thankful to the American people for

[Leslie Southwick (quoted)]

the great privilege of being able to serve as your next president.

[Steven Monticelli]

Young and almost entirely unknown outside of legal circles, James Ho joined some of the most famous conservative lawyers in the country in the year 2000 to convince the United States Supreme Court to stop the hotly contested presidential vote count in Florida. That move elevated President George W. Bush to the White House. In this effort, James Ho rubbed shoulders with right wing luminaries like the man who in five years would be the chief justice of the Supreme Court, John Roberts.

[Michael Phillips]

Ho rocketed to judicial superstardom. He clerked for Supreme Court Justice Clarence Thomas for a couple of years. Then from 2008 to 2010, he succeeded Ted Cruz as Solicitor general of Texas. There he handled appeals filed by the state in cases heard by the state supreme court and the US Supreme Court. On January 4, 2018, Host celebrated his next rapid climb up the judicial ladder when he is sworn as the newest judge on the United States Fifth Circuit Court of Appeals, which oversees federal cases that originate in Texas, Mississippi and Louisiana.

[Steven Monticelli]

Ho's swearing in ceremony took place at the mansion of Dallas real estate billionaire Harlan Crow. You've probably heard that name before because Crow has made news with the revelation that he lavished hundreds of thousands of dollars in gifts and favors on Supreme Court Justice Clarence Thomas, including cruises to Indonesian islands on the businessman's 162 foot superyacht and a $119,000 Bible that once belonged to leading abolitionist Frederick Douglass. Crow flew Thomas to Dallas on his private jet so the justice could swear in his former clerk. The surroundings included Crow's unnerving souvenirs once described on the program Inside Edition.

[Michael Phillips]

Questions are being raised today about Supreme Court Justice Clarence Thomas friendship with a

[Mia Wong]

billionaire who collects Nazi memorabilia. Published reports say Dallas tycoon Harlan Crow's

[Michael Phillips]

controversial collection includes Hitler's notorious autobiography, Mein

[Mia Wong]

Kampf signed by Hitler, oil paintings by Hitler, and linen napkins embroidered with the Nazi swastika.

[Michael Phillips]

The collection is housed at Crow's mansion in Dallas.

[Steven Monticelli]

I can't get over the collection of

[Mia Wong]

Nazi memorabilia, said one guest who saw the Nazi treasure trove. You sort of just gasp when you

[Steven Monticelli]

walk into the room.

[Michael Phillips]

The estate also includes what Crow has called the Garden of Evil a collection of imposing statues of past authoritarian leaders like Vladimir Lenin, Joseph Stalin, Mao Zedong, Nicolae Ceausescu, the eccentric Romanian tyrant violently deposed in 1989, as well as a bust of Gavrilo Princip, the Bosnian Serb nationalist who triggered World War I with his assassination of Austrian Archduke Franz Ferdinand. Crow claims that his collection is somehow a statement of his hatred for both communism and fascism.

[Steven Monticelli]

The creepy artwork perhaps foreshadowed Ho's ominous career in the Fifth Circuit Court of Appeals. On that bench, he has become infamous for weirdly written and extreme opinions in which he has suggested that the children of migrants might not be eligible for birthright citizenship because the country is being, quote, invaded, and that abortion actually somehow injures doctors because they are denied the intense pleasure of delivering babies. Those antics might lead him to one day occupy a seat on the United States Supreme Court, potentially succeeding Thomas or Samuel Alito, the two oldest justices on the nation's highest bench.

[Michael Phillips]

In this episode, we'll look at the career of Judge James Ho, his alarming right wing judicial activism, and the strange history of the Fifth Circuit Court of Appeals, which since the Reagan administration has transformed from one of the most liberal judicial bodies in the country to perhaps the scariest court in America.

[Steven Monticelli]

Given its current reactionary reputation, it's a bit ironic. The Fifth Circuit Court convenes in a New Orleans courthouse named after John Miner Wisdom, a New Orleans native who formed a critical part of a quartet of liberal judges known simply as the four, who in the 1950s and 1960s issued a series of revolutionary rulings that advanced the civil rights movement. President Dwight Eisenhower appointed Wisdom to the bench in 1957. He quickly formed an alliance with three other liberal judges on the Fifth Circuit, Albert P. Tuttle of Georgia, John R. Brown of Texas and Richard T. Rivas of Alabama. Rivis was the only Democrat on the squad that came to be known as the 5th 4th. These liberals typically prevailed over the conservatives serving on the 5th Circuit, and at that point the 5th Circuit heard cases from states that spread across the core of the one time Confederacy, including Louisiana, Florida, Alabama, Mississippi, Texas and Georgia. This placed the Fifth Bore on the front lines of the Civil rights struggle.

[Michael Phillips]

In 1958, the Fifth Circuit began chipping away at Jim Crow. The court heard the case of Joe Dorsey Jr. Of New Orleans, challenging a Louisiana law that outlawed matches between black and white boxers. Wisdom wrote the majority opinion, which declared such legislation made a mockery of the equal protection clause of the 14th Amendment to the United States Constitution. That opinion, like many Wisdom wrote, would be upheld the following year by the Supreme Court that was presided over by Chief Justice Earl Warren. Louisiana integrated boxing matches, but for years outside the ring, the arenas divided into black and white seating.

[Steven Monticelli]

In the coming years, the Fifth Circuit forced St. Helen Parish in Louisiana to reopen their schools. After that, school board voted to close all campuses to prevent integration. The fifth Circuit court ordered the University of Mississippi to admit an African American student, James Meredith. In his opinion, Wisdom wrote that Ole Miss, as it's known, had engaged in a carefully calculated campaign of delayed harassment and masterly inactivity. Riots broke out as federal troops had to enforce the order.

[Robert Evans]

James H. Meredith is formally enrolled at the University of Mississippi, ending one chapter in the federal government's efforts to desegregate the university.

[Mia Wong]

The town of Oxford is an armed

[Robert Evans]

camp following riots that accompany the registration

[Mia Wong]

of the first negro in the university's 118 year history. Much of this film record was destroyed

[Robert Evans]

when our cameraman, Gordon Yoder, was attacked,

[Mia Wong]

but he did salvage pictures of Governor Ross Barnett at the scene. The governor fought the court order long

[Robert Evans]

and bitterly before modifying his stand, saying Mississippi was overpowered by the federal government.

[Mia Wong]

President Kennedy appealed to the students and

[Ilya Ayub]

to the people of the state to

[Robert Evans]

comply peacefully with the law and bring the crisis to an end. Even as he talked, riots were breaking out in Oxford.

[Mia Wong]

Americans are free, in short, to disagree

[Robert Evans]

with the law, but not to disobey it. For any government of laws and not of men, no man, however prominent or

[Mia Wong]

powerful, and no mob, however unruly or boisterous, is entitled to defy a court of law.

[Michael Phillips]

In 1963, the Fifth Circuit ordered the desegregation of community centers, cultural centers, playgrounds and public parks. The next year, the court ruled that jury selection system in Orleans Paris, where, as Wisdom noted, no black had ever sit on a grand jury or trial jury panel, violated the Constitution. Two years after that, the fifth Circuit overturned Louisiana's voter registration literacy test, which required a citizen to pass, in the judgment of white officials, a written test on the Constitution. Such laws had long disenfranchised impoverished African Americans and whites.

[Steven Monticelli]

Perhaps Wisdom's most significant opinion came with the 1968 United States v. Jefferson case which blocked states from avoiding compliance with the Brown v. Board of Education decision by setting up so called, quote, school choice plans in which parents allegedly freely chose to send their children to segregated schools.

[Leslie Southwick (quoted)]

Wisdom wrote, the Constitution is both colorblind and color conscious. To avoid conflict with the Equal Protection Clause, a classification that denies a benefit, causes harm or imposes a burden must not be based on race. In that sense, the Constitution is colorblind, but the Constitution is color conscious to prevent discrimination from being perpetuated and to undo the effects of past discrimination.

[Michael Phillips]

Coining a phrase that would later ignite fierce white backlash against civil rights north and South, Wisdom said school systems needed to move beyond ostensibly not discriminating and to take, quote, affirmative action to bring about a unitary, non racial system. That phrase would provide a legal foundation for school busing as a means of genuinely integrating schools and also introduced the concept of affirmative action, hiring practices, and other stubborn aspects of racial exclusion.

[Steven Monticelli]

The Fifth Circuit's record of judicial progressivism continued through the 1970s. A 1976 decision by the Fifth Circuit, for instance, required public colleges and universities in Texas to recognize gay student organizations. Meanwhile, moderate Republicans tried to persuade Richard Nixon to nominate Wisdom for the United States Supreme Court.

[Michael Phillips]

However, Attorney General John Mitchell, who later went to prison for his role in the Watergate scandal, squashed the idea. He complained that the judge was a damn left winger who would supposedly be as bad as the famously liberal Chief Justice Warren. President Clinton would give Wisdom the Presidential Medal of Freedom in 1993. Wisdom died six years later.

[Steven Monticelli]

If he miraculously returned, Wisdom would not recognize the appeals court that he spent so much of his life serving. We'll talk about the transformation of the fifth Circuit of Appeals, the extreme and disturbing decisions it has made since the start of the Trump era, and the career of one of that court's most infamous judges when we come back from our hopefully less infamous sponsors. In 1981, the federal judiciary was reorganized. The Fifth Circuit Court now heard appeals only from Mississippi, Louisiana and Texas. A new 11th Circuit Court now hears cases from Alabama, Georgia and Florida. We should provide a hopefully brief civics lesson here. The fifth court consists of 17 active judges and nine senior judges. When a side loses a case in a federal district court, they can appeal to a circuit court where the case is heard by a three judge panel. In some cases, if one side disagrees with the judgment of the panel, they may appeal the decision to the full judicial court.

[Michael Phillips]

Among the active judges, those appointed by Republican presidents outnumber those appointed by Democrats by a margin of 12 to 5 Donald Trump appointed more than a third of these judges, six in all. Each, of course, could serve on the court for the rest of their life. The fifth Circuit also has eight senior judges who are semi retired but preside over a limited number of cases. Six of them were also appointed by Republican presidents stretching back to Ronald Reagan.

[Steven Monticelli]

Even in that hyper conservative company, James Ho has stood out. Mike Davis, the president of the pro Trump Article three projects, a group dedicated to pushing federal courts further right, has said, quote, on every crucial but controversial legal issue, Jim Ho is constantly the tip of the spear.

[Michael Phillips]

It has been a cliche among the American right wingers that liberal judges from the time of Franklin Roosevelt on had become judicial activists for abusing their positions on the bench to advance their political agendas rather than impartially ruling on the law calling balls and strikes. Ho's open political advocacy, however, has raised no alarms for those saying presume advocates for judicial neutrality.

[Steven Monticelli]

While he served as Texas's solicitor general, Ho did pro bono work for the First Liberty Institute, a Christian right organization headquartered in Plano, Texas, just north of Dallas that won a case for a Washington state high school football coach who was fired because he violated school policy by leading his team in prayer after each game. The group has also represented bakers who refused to make wedding cakes for same sex couples.

[Michael Phillips]

As a judge, Ho led a boycott of legal clerks who graduated from Yale Law School to punish that institution for its supposed leftist cancel culture and intolerance of conservative views. During a speech to the far right Heritage foundation, the authors of Project 2025, Ho ridiculed lawyers with, quote, fancy credentials, fancy law schools, fancy clerkships, fancy law firms and government jobs. He claimed that issued liberal opinions for no other purpose than winning popularity. He urged young conservatives to assert themselves against the supposed popularity of political correctness.

[Steven Monticelli]

In addition to serving on the bench, Ho could be considered an activist, particularly on culture war issues like abortion. He's condemned abortion as the immoral, tragic and violent taking of innocent human life. In 2018, he upheld a Texas law that required the cremation or burial of fetal remains, a potentially costly burden for women receiving medical treatment. And the state of Texas argued that any potential financial burdens to women or clinics were irrelevant since the Texas Conference of Catholic Bishops made a pledge to bury the remains for low cost or even for free. Such a promise, of course, was not legally binding.

[Michael Phillips]

A district court overturned the law, but Ho and the fifth Circuit reinstated it, arguing that coerced burial protected religious freedom of the Catholic bishops. Quote, the First Amendment expressly guarantees the free exercise of religion, including the right of bishops to express their profound objection to the moral tragedy of abortion, ho wrote. Texas still requires that fetal remains receive burial or cremation. As we'll explain later, it's not only on the issue of abortion that Ho has staked out an extreme position. In Mance vs Sessions, the Fifth Circuit Court, by an 8 to 7 vote, narrowly avoided overturning a federal gun law that prohibited interstate gun sales. Ho offered a bitter dissent, quoting his mentor Clarence Thomas and complaining that in spite of the wide open access to firearms in this country, the Second Amendment had become, quote, a second class right. In his opinion, Ho ridiculed advocates of gun control suffering from hoplophobia, the irrational fear of guns.

[Steven Monticelli]

Ho and the entire 5th Circuit achieved national infamy after the Supreme Court erased almost half a century of abortion rights when it overturned the Roe v. Wade decision in the Dobbs v. Women's Health organization case on June 24, 2022. A little more than a year after that landmark case on August 16, 2023, the Fifth Circuit upheld tightened access for women to mifepristone, the so called abortion pill, which accounts for more than half of all terminated pregnancies in the United States. Originally approved by the Food and Drug Administration in 2000, but only for prescription by hospitals and other medical facilities, the FDA expanded access to the medication in 2016 and gave doctors the right to directly prescribe mifepristone in response to the COVID 19 pandemic. Starting in 2021, women could receive it through the mail.

[Michael Phillips]

In 2024, an anti abortion organization, the alliance for Hippocratic Medicine, intentionally incorporated in 2022 in Amarillo, which placed it in the jurisdiction of the famously anti abortion federal District Judge Matthew J. Kacmarek. Like Judge Ho, Kacmark belonged to the first Liberty Institute. While being considered for the federal bench, he unsuccessfully tried to conceal his authorship of legal articles on gay rights he thought might jeopardize approval of his domination by the U.S. senate. Kacmaric has described gay and trans people as mentally disordered. The alliance for Hippocratic Medicine filed suit in Kacmark's court seeking to overturn the FDA's approval of mifepress down even though decades of research had demonstrated its safety and its effectiveness for treating Cushing's syndrome, a severe endocrine disorder.

[Steven Monticelli]

None of the doctors in the alliance had ever been involved in a medical case in which the use of mifepristone had been considered. In his opinion, Kaczmieric showed his disdain for medical personnel providing women reproductive care, referring to them as abortionists, and called terminating pregnancy through medication starving the unborn human until death.

[Michael Phillips]

Courts require that parties have what judges call standing in order to file a lawsuit. That means, for instance, that one party has been in some way directly injured by the other party. President Joe Biden's Food and Drug Administration questioned how the doctors and the alliance for Hippocratic Medicine had in any way been directly harmed because women have access to abortion medications. Kaczmarek found a fanciful way to grant the alliance a right to sue. He claimed that treating the rare complications from mifepristone overwhelmed hospitals and placed, quote, enormous pressure and stress on the doctors during emergencies and complications.

[Steven Monticelli]

After granting the alliance standing, Kacmerek issued a preliminary injunction suspending the FDA's approval of the drug. The decision would go into effect in 7 days in order to give the federal government a chance to file an appeal. In his decision, Kacmarek cited two studies that claimed the drug was harmful, but both had been retracted by a medical journal. In effect, Kacmarec had banned mifepristone nationwide. The United States Justice Department and Danko Laboratories. Mifepristone's manufacturer appealed, and the case went to the fifth Circuit.

[Michael Phillips]

Judicial chaos surrounding the status of mifepristone reigned within hours as ABC7 in Los

[Mia Wong]

Angeles reported a judicial bombshell involving abortion that could have an impact in all 50 states.

[Steven Monticelli]

A Texas federal judge revoking FDA approval

[Mia Wong]

of an abortion pill that's been used for more than 20 years. But another federal judge in Washington state

[Dana Al Kurd]

then issuing a contradictory ruling, setting up

[Garrison Davis]

another major battle over a woman's right to choose.

[Mia Wong]

Eyewitness News reporter Amy Powell, joining us

[Angela Yee]

live in studio with more tonight.

[Ilya Ayub]

Amy.

[Mia Wong]

Michelle, this is causing a lot of concern.

[Dana Al Kurd]

The reversal of Roe v. Wade by

[Mia Wong]

the Supreme Court was supposed to mean that abortion laws would be left up to individual states.

[Garrison Davis]

But today, a Texas federal judge issued

[Mia Wong]

a ruling that could end access to

[Garrison Davis]

an abortion pill in all 50 states.

[Mia Wong]

Shortly after the Texas judge issued his decision, a judge in Washington state issued a ruling ordering the FDA to make

[Angela Yee (Ad Segment)]

no changes to the availability of of mifepristone.

[Garrison Davis]

Those conflicting orders mean this case is

[Dana Al Kurd]

likely to end up in the Supreme Court.

[Steven Monticelli]

The mifepristone case went to the fifth Circuit, where Judge Ho would write an opinion critics characterized as disturbing, baffling, and bizarre. We'll talk about what happened in the mifepristone case and how Judge Ho, an immigrant himself, has suggested that the children of migrants might not be eligible for birthright citizenship because the United States is, in his words, being invaded. But first we'll hear some, hopefully not too bizarre messages from our sponsors.

[Michael Phillips]

When the Fifth Circuit heard the appeal of Kazmark's ruling, Ho didn't recuse himself from the case, even though his wife, Allison, a lawyer, has repeatedly appeared at events sponsored by the Alliance Defending Freedom, one of the litigants, and even received speaking fees from the organization. Ho brushed off this obvious conflict of

[Steven Monticelli]

interest on August 16, 2023. That court didn't completely uphold Kaczmarek's ruling, but it did impose numerous restrictions on the abortion pill called mifepristone, claiming that the FDA didn't fully consider its potential health risks. If the Supreme Court had upheld the Fifth Circuit's opinion, women would not have been allowed to receive a prescription through the mail after online medical appointments. They would have been able to receive the prescription only after a direct visit with a doctor and after three in person follow up appointments. The window in which women would have been allowed to take mifepristone would have been cut from 70 days of pregnancy to about 49.

[Michael Phillips]

Ho wanted to go much further than the Fifth Circuit's majority. He wanted to rescind the FDA's approval of mifepristone, which would have removed the drug from the market entirely. When judges agree with a majority on a panel, they can write a concurring opinion that gives them a chance to grandstand about a case. This is what Ho did in his concurrence when he bitterly complained that some believe that, quote, no one should ever question the fda.

[Steven Monticelli]

Ho then asked the public to pity the obstetricians he claimed suffer because of women's abortion rights. Ho drew on environmental case law, which acknowledges that a member of the public might believe that they've suffered a loss when, for instance, a park is destroyed because it is the location of a new mining operation and then they can sue on that basis, Ho argued that doctors could suffer the same sort of damages when a pregnancy is medically ended. In his concurrence on mifepristone, Ho wrote,

[Leslie Southwick (quoted)]

the unborn babies are a source of profound joy for those who view them. Expectant parents eagerly share ultrasound photos with loved ones, friends and family cheer at the sight of an unborn child, and doctors delight in working with their unborn patients and experience an aesthetic injury when they are aborted.

[Michael Phillips]

Leo Yu is an assistant professor of law at the University of Massachusetts at Dartmouth who specializes in civil rights law. Yu actually received law degrees in two countries his native China and in the United States at Southern Methodist University in Dallas. While he lived in Texas, he lived under the jurisdiction of the fifth Circuit and saw close hand the legal chaos the fifth Circuit has created in the states of Texas, Louisiana, and Mississippi. In 2021, he created the podcast Plead the Fifth. Professor Yu believes that when Ho writes extreme opinions, such as in the mifeprostone case, he's desperately trying to get one man's attention.

[Leo Yu]

He is auditioning all the time to the Supreme Court, and he went so far to create something that is, quite honestly, just not even sensible. It's like, you know, people wanted to see cute little, you know, ultrasounds of babies, and that makes important, you know, them having the standing to challenge abortion pills because they wouldn't be able to see those cute little ultrasounds anymore. And it just. That part of rationale is quite. Just insane. I think that part. I don't know if that is something that he truly believed. And I would say that it's hard to imagine for anybody who truly believed that sort of analysis. So I put that part of analysis as another way from Justice Ho trying to audition for the Supreme Court. Like, hey, you think you found a conservative judge somewhere in D.C. look at me. I'm even more. And that's what it is.

[Steven Monticelli]

No one would accuse the United States Supreme Court under John Roberts of being moderate. But repeatedly, Roberts and the other justices have taken the fifth Circuit to task for going to extremes in its ruling. As Texas Tribune writer Eleanor Klibanoff put it, quote, if the 5th U.S. circuit Court of Appeals was a boxer, you'd bet on the other guy.

[Michael Phillips]

Writing a Supreme court's reaction to Fifth Circuit rulings and July 2024, Klibanoff noted that only three of the tribunal's decisions had been upheld, while eight had been overturned. A one loss record that ranked amongst the worst among circuit courts in the country. In the Mefa Pristone case, Justice Brett Kavanaugh, hardly a Bolshevik, expressed dismay that the alliance for Hippocratic Medicine had been granted standing.

[Steven Monticelli]

Kavanaugh wrote this for a plaintiff to get in the federal courthouse door and obtain a judicial determination of what the governing law is, the plaintiff cannot be a mere bystander, but instead must have a personal stake in the dispute. End quote. If the standard set by Judge Ho and his peers in New Orleans remained in place, Kavanaugh warned, virtually every citizen would have standing to challenge virtually every government action that they do not like. Governing, he suggested, would become impossible.

[Michael Phillips]

It wasn't just on the issue of legal standing. That the Supreme Court found the fifth Circuit Court's judgment lacking. In the case of Rahimi versus The United States, the fifth Circuit overturned a federal law that prohibited domestic abusers from buying firearms. The highest court on June 21, 2024 overturned that decision by an 8 to 1 margin. Chief Justice John Roberts, who generally supports a very broad view of gun rights, said that history quote, confirms what common sense suggests. When an individual poses a clear threat of physical violence to another, the threatening individual may be disarmed. Roberts also suggested that the fifth Circuit misunderstood the Supreme Court's view of the Second Amendment. Professor Yu told us that as conservative as Supreme Court majority might be outside of Clarence Thomas, they have found the 5th Circuit's rulings to be an embarrassment to conservative judicial philosophy.

[Leo Yu]

On that again, I think that was the eight to one opinion and Clarence Thomas was the only person who would agree with the fifth circus. So in general I think the Supreme Court is definitely conservative, but the Supreme Court appreciate a certain type of conservativeness that they can chew on and it's something that it can laced with some academic legitimacy and not just some sort of attention seeking paragraph that would make people feel some sort of feeling.

[Steven Monticelli]

On the last day of its 2024 session, the Supreme Court sent back to the 5th Circuit a case involving a 2021 Texas law that limited the ability of social media companies to suspend user accounts for extremist or violence inciting content. The law was inspired by the decision of what was then called Twitter and now X, as well as other social media companies to de platform Donald Trump after the president encouraged his supporters to ransack the Capitol and stop the counting of Electoral College votes on January 6, 2021. The 5th Circuit previously upheld the law, claiming that it rejected, quote, the idea that corporations have a freewheeling First Amendment right to censor what people say.

[Michael Phillips]

Ho and his allies on the fifth Circuit, however, are fine with censoring free expression by members of the LGBTQ community. In March 2023, Walter Wendler, the president of West Texas A and M University, a public institution, canceled a drag show scheduled at Legacy Hall, a campus building. Organizers plan to use proceeds from the performance to raise money for the Trevor Project, a nonprofit group that seeks to prevent suicides in the LGBTQ community. In a statement canceling the show, Wendler explicitly said that his private religious beliefs guided his decision.

[Leslie Southwick (quoted)]

West Texas A and M University will not host a drag show on campus. I believe every human being is created in the image of God and therefore a person of dignity. Does a drag show preserve a single thread of human dignity, I think not as a performance exaggerating aspects of womanhood, sexuality, femininity, gender. Drag shows stereotype women in cartoon like extremes for the amusement of others and discriminate against womanhood. Drag shows are derisive, divisive and demoralizing misogyny. No matter what the stated intent, such conduct runs counter to the purpose of West Texas A and M. A person or group should not attempt to elevate itself or a cause by mocking another person or group. As a university president, I would not support blackface performances on our campus. Even if told the performance is a form of free speech or intend it as humor, it is wrong.

[Steven Monticelli]

Spectrum wt, a pro LGBTQ student organization, filed a suit challenging the ban and requested an injunction blocking Wendler's action. But Judge Kaczmieric, the same jurist who initially blocked access to mifepristone, sided with West Texas A and M and issued a preliminary ruling preventing the drag show from taking place pending a trial. He said the performance supposed to sexual content lacked free speech protections. Quote the First Amendment does not prevent school officials from restricting vulgar and lewd conduct that would undermine the school's basic educational mission, particularly in settings where children are physically present, kaczmieric wrote in his September 22, 2023 opinion.

[Michael Phillips]

Spectrum WT appealed. The case went to the Fifth Circuit, where a three judge panel heard arguments on whether the fundraiser could proceed. On August 18, 2025, by a 2 to 1 vote, the panel reversed Kacperek's ruling. Judge Leslie Southwick, a George W. Bush appointee and a Bill Clinton appointed U.S. circuit Judge James Dennis, ruled that West Texas A and M had violated the gay student organization's expressive rights.

[Steven Monticelli]

Predictably, Ho dissented. He simply echoed the arguments used by the university president, insisting that banning drag shows somehow advanced inclusivity.

[Leslie Southwick (quoted)]

University officials have determined that drag shows are sexist for the same reason that blackface performances are racist and Supreme Court precedent demands that we respect university officials when it comes to regulating student activities to ensure an inclusive educational environment for all.

[Steven Monticelli]

Spectrum WT's victory proved temporary. The panel's decision would not go into effect until the case was heard by the entire 5th Circuit Court. Meanwhile, a full trial unfolded in Kacmierk's court in January. Not surprisingly, he ruled in favor of West Texas A and M. He said that the student group had not proven that the show was meant to convey a message that might be protected by the First Amendment and that by their nature, drag shows have sexualized content and the university had the right to to regulate on campus grounds. The hearing before the full 5th Circuit was canceled, although Spectrum's legal team at the foundation for Individual Rights and Expression plans a different appeal. On February 25, a panel of the Fifth Circuit also upheld a new state ban on certain types of drag performances. Judge Kurt Engelhardt, appointed to the Fifth Circuit by President Donald Trump, expressed doubt that such shows were protected by the Constitution, especially said quote in the presence of of minors.

[Michael Phillips]

While the 5th Circuit chipped away at free speech rights for the LGBTQ community, it advanced the rights of states to impose speech on public school teachers. The full court, by a 12 to 6 margin, lifted a district court's hold on a Louisiana state law requiring teachers display poster sized copies of the Ten Commandments in public school classrooms in spite of the First Amendment's prohibition on establishing a state religion or requiring religious practice. In the efforts of the founders of the American republic, like Thomas Jefferson, to erect a wall of separation between church and state, James Ho celebrated the decision. The Louisiana law was not only constitutional, ho said, it, quote, affirms our nation's highest and most noble traditions. That claim left Professor Yoo baffled.

[Leo Yu]

The question is, is he a historian when he said that the founding members of this country would like that? What historical record is he relying on? But isn't that even anti common knowledge that our founders would really resent that? To push our newly established republic to a situation where we push our citizens to believe in certain things religiously? That is exactly the reason why they left Europe.

[Steven Monticelli]

The Fifth Circuit has presented a threat not only to the separation of church and state, free speech and LGBTQ rights, but it has also placed the rights of workers in its crosshairs. On August 19, the United States Fifth Circuit Court of Appeals upheld an injunction requested by attorneys for Elon Musk's SpaceX corporation, ruling that the structure of the National Labor Relations Board is unconstitutional and prohibiting it from acting against that company and two other corporations the NLRB charged with labor law violations. As has often happened, the 5th Circuit Court ruling conflicts with that of another circuit court, the Ninth Circuit, which upheld the power granted by the nlrb. This split almost certainly guarantees the case will end up in front of a Supreme Court that has been no friend of American workers.

[Michael Phillips]

On rare occasions, the 5th Circuit might still acknowledge that society is tilted against the poor and people of color. A panel made up of 5th Circuit judges ruled that Lebean Conan could proceed with our lawsuit against the United States Post Office, a landlord who owns two properties in Euless, a suburb between Dallas and Fort Worth Conan claimed that beginning in 2022, local postal employees abruptly stopped delivering mail, first to her and then to her tenants because, she said they didn't like the idea that a black person owned the property.

[Steven Monticelli]

The Post Office is mostly shielded from lawsuits by a legal doctrine called sovereign immunity, under which, as legal analyst Elie Mistahl explains, quote, the government cannot be held liable for monetary damages arising out of actions taken by the government. What was unique about the United States Postal Service Bikanan case, however, was that in this circumstance, the government was causing intentional damage to a private citizen. This time, the Fifth Circuit ruled in the favor of a marginalized citizen and ruled the suit could go forward.

[Michael Phillips]

This rare progressive ruling was for naught. However. The Supreme Court overturned the Fifth Circuit. Once again. Clarence Thomas wrote the opinion for the 54 majority, essentially ruling as Ms. Stahl summarized the case that the Post Office is immune from liability even when its workers intentionally refused to do their jobs. Ms. Stahl suggested that this decision carries ominous implications for the upcoming election. Should the U.S. postal Service, for instance, refuse to deliver mail in ballots.

[Steven Monticelli]

In spite of James Ho's status as an immigrant, his most alarming opinion might be regarding birthright citizenship. Ratified in 1868, just three years after the end of the Civil War, 14th Amendment to the United States Constitution declares in its opening sentence that, quote, all persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the state wherein they reside.

[Michael Phillips]

For 128 years, the Supreme Court has rejected claims that citizenship can be denied to persons born or naturalized here based on their race or the immigration status of their parents. In the 1898 United States vs Wong Kim AR case, the Supreme Court upheld the citizenship of a man born in the United States to Chinese parents. The government tried to block Ark from returning to the United States after he visited China, based on the 1882 Chinese Exclusion act, which barred the Chinese from immigrating here. The court ruled 6 to 2 that Arc's birth in the United States established his American citizenship and his right to reside here.

[Steven Monticelli]

James Ho has not always attacked the concept of birthright citizenship, and in fact he used to defend it. Quote, birthright citizenship is a constitutional right, no less for the children of undocumented persons than for the descendants of passengers of the Mayflower, ho said in a 2007 opinion piece for the Des Moines Registered.

[Michael Phillips]

However, as the political wind shifted strongly against immigrants, particularly in the Trump era, Ho is also tilted in a dramatically different direction. In a 2024 interview, Ho claimed that the United States was being invaded by the foreign born and that denying citizenship to the children of the undocumented was necessary to defend national sovereignty.

[Leslie Southwick (quoted)]

Ho said birthright citizenship obviously doesn't apply in case of war or invasion. No one, to my knowledge has ever argued that the children of invading aliens are entitled to birthright citizenship, and I can't imagine what the legal argument for that would be. It's like the debate over unlawful combatants. After 9 11, everyone agrees that birthright citizenship doesn't apply to the children of lawful combatants, and it's hard to see anyone arguing that unlawful combatants should be treated more favorably than lawful combatants.

[Steven Monticelli]

The question of birthright citizenship might now be out of the hands of Hobby and the rest of the Fifth Circuit. On December 5th, the Supreme Court agreed to hear a case on the constitutionality of Donald Trump's executive order that would deny citizenship to those born in the United States if their parents were in the country temporarily or lacked legal status. Dr. Yoo thinks that the Supreme Court is likely to accommodate those restrictions even as they reject James Ho's more extreme theories.

[Leo Yu]

I think the Supreme Court would roll back some portion of the 14th Amendment protection over people who are born in this country, but I don't think they are going to what Justice Ho is going after. That is the invasion theory.

[Michael Phillips]

That doesn't mean that James Ho may not one day bring his extreme views on immigration to the nation's highest court. The two most far right judges on the United States supreme court are James Ho's mentor Clarence Thomas, who turned 78 on June 23, and Samuel Alito, who celebrates his 76th birthday on April 1. Court watchers are speculating that Alito might step down as early as October. His wife, Martha Ann, has expressed eager anticipation that the couple might soon be able to openly express their political views, as though the Alito's opinions have ever been a mystery. It's still an uphill battle, but the odds of Democrats retaking the Senate after the off year elections have improved significantly in recent weeks. Alito may want to retire while a Republican controlled Senate would still be able to rubber stamp Trump's choice for his successor.

[Steven Monticelli]

Alito also has a book coming out on October 6, the day after the Supreme Court starts its fall term. Continuing to serve on the court would interfere with any book promotion tour, and such an opening might lead to James Ho getting a promotion, but Professor Yu said that the Fifth Court judge shouldn't pack his bags just yet. Trump has largely outsourced the job of picking new federal judges or promoting them to the far right federal society. And you thinks that Ho might lack the polish that a powerful lobbying group would seek?

[Leo Yu]

I think, you know, it's not a secret that he's trying to get there, but I honestly think it's not going to be him. He doesn't really fit into the profile as a person who would get there. I think the FedSoc, you know, the Federalist Society is basically the handler of that situation. They would be able to, you know, screen name and, you know, make short list to the White House. And so what kind of people they're looking for?

[Garrison Davis]

I think that they're definitely looking for

[Leo Yu]

a conservative if Alito is going away, right? They are looking for conservative, but I don't think Justice Ho is in their favor because I think they are trying to find another person who is more sophisticated than Justice Ho. If I may say that they wanted to find a person who is definitely conservative but being able to rewrap the message with academic legitimacy and to force a meaningful majority at the court to push through their agenda.

[Michael Phillips]

Recently, Trump said he was considering Ted Cruz of Texas for the next Supreme Court vacancy. If so, James Ho may be enjoying his lifetime post at the 5th Circuit for the foreseeable future. Ho celebrated his 53rd birthday on Feb. 27. That means his legal philosophy will shape gay and trans rights, the limits of free speech, who can buy firearms and where and how, how much autonomy women have over their bodies and what access they will enjoy to health care and where the boundaries will be drawn between church and state for years to come. Ho may not make it to the Supreme Court, but he could still be the loudest voice on the scariest court in America and shape the future of 40 million Americans in Texas, Louisiana and Mississippi for decades to come.

[Steven Monticelli]

We'd like to thank our friend Steve Mason for providing some of the voices today. This is Stephen Monticelli for It Could Happen Here.

[Michael Phillips]

And this is Michael Phillips. Until next time, thanks for listening.

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[Dana Al Kurd]

hello everyone. Welcome to It Could Happen Here. My name is Dana Al Kurd. I'm a Researcher of Arab and Palestinian politics. And today I'm joined by Ilya Ayub. Would you like to introduce yourself?

[Ilya Ayub]

Yeah, yeah. Hi, Dana. Thank you for having me. My name is Ilia. I'm originally from Lebanon. My background is in both history and journalism and I often write about the region. I'm also part Palestinian and I also write a lot about Israel and Palestine. And obviously in the past few years I've been covering and also worrying a lot about what's been happening.

[Dana Al Kurd]

Yeah, thank you so much for joining us, especially at such a difficult time for the listeners. We are recording March 22, 2026 and Israel's attack on Lebanon is ongoing. So we're really grateful to Ilya for joining us and talking to us about what this means and what we're seeing on the ground. Yeah. So maybe I'll start there. Can you lay out for the listener what is happening in Lebanon right now?

[Ilya Ayub]

So what's been happening in Lebanon is directly connected to the U.S. israeli war on Iran, which started what, about 20 to 23 days ago, something like that. That was in itself in the context of negotiations between the Americans and the Iranians in Switzerland, mediated by Oman. And just moments later, really that same night, the bombing of Iran started in Lebanon, or rather the way Lebanon enters this story is a couple of days after the assassination of Khamenei Ayatollah of Iran, Hezbollah launched rockets towards Israel. And this was used by the Israelis as effectively them saying that we will unleash hell on Lebanon. And that's often how it's been reported. What is often missed even in that context is that there was a so called ceasefire between Israel and Lebanon and HEZBOLLAH Obviously for 13 months before that. But that so called ceasefire and the reason I'm saying so called ceasefire had already been violated by the Israelis. And this is figures that come from the UNIFIL, the UN peacekeeping forces in Lebanon over 15,000 times, whereas they themselves, in fact even the BBC today I saw an article today acknowledged that Hezbollah had not violated the ceasefire. Which just I guess tells you also where the mood is at in terms of the coverage since then. Like in the past three weeks, the hell. And this term was used by Israeli officials themselves that has been unleashed on Lebanon has been unprecedented. And even even by Israeli wars on Lebanon standards, which is saying a lot. As of time of recording, at least 20% of the entire Lebanon has already been displaced. And for the most part these are people that had already experienced displacement at least once in 2024 when this war started, if not older Patterns of displacements going back to the civil war and the Israeli occupation of south Lebanon in the 80s and 90s and so on. And pretty unclear where this is headed because just hours before we even started recording, they escalated their bombings of bridges connecting south Lebanon to the rest of Lebanon. Bridges over the Litany river, which is one of the rivers in the south, as part of the attempt to cut off the entire region of south Lebanon from the rest of the country. And yeah, we can get into obviously more of the details and the impact that this is having on Lebanon itself, of course, because this tends to be unfortunately, like, not covered as much.

[Dana Al Kurd]

Yeah, thank you. So to kind of summarize, because they decided to launch a war against Iran, and obviously there's so much to say about that, we're not going to be able to address every aspect of this conflict. But because of that, and after particularly the assassination of the Ayatollah, Hezbollah launched rockets and then the Israelis, who had already been breaking the ceasefire between them and Hezbollah that had emerged over the past year, decided to kind of ramp up their attacks. And when we say ramp up their attacks, you know, you've mentioned, like the destruction of infrastructure, cutting off the south, basically clearing villages, etc. The Israeli officials, including Netanyahu, have said they want to impose what they called the Gaza model on Lebanon. So what can we understand from this kind of comment?

[Ilya Ayub]

Yeah, thank you. It's important to note that such comments are not new at all and they have also been uttered in times of quote, unquote, peace. So when there isn't any kind of active conflict. In my own article for 972, which I wrote about, I don't know, two weeks ago or so, I quote a number of those politicians, and I'll just mention a few of them here. Yoav Gallant, who has of course since been and still has an arrest warrant by the International Criminal Court, he threatened to send Lebanon back to the Stone Age. And this was in November 2024. The Diaspora Affairs Minister Amishai cheekily declared in September 2024 that Lebanon, quote, does not meet the definition of a state. And he described all of the Shia population of Lebanon as, quote, unquote, hostile, which is genocidal language by definition. And even about what, two, three weeks ago or so, Smotrich, who's one of kind of the main far right politicians in Israel today, said that very soon, as I'm quoting very soon, Dahi will resemble Khan Younis. Dahi being the southern suburb of Beirut, where Allah, there's a lot of support for Hezbollah and has always been talked by the Israelis as like one of the, quote unquote, Hezbollah strongholds. In fact, they pioneered, you might say, their Dahi doctrine in 2006, so named after Tahiyyah. There was a war in 2006 as well between Israel and Hezbollah, which is quite explicitly a policy of bombing civilian infrastructure in order to put pressure on their enemy, in this case Hezbollah, which is basically an acknowledgment that they violate international law as state policy. And on March 11, a member of the Knesset for the same party as Smotrich said, and I'm quoting, we must conquer territory in southern Lebanon, destroy villages there, and annex the territory to the state of Israel, end quote. There's another one, Gadi Eisenkot, who was the former chief of staff of the Israeli army. The IDF said around the same time, I think it was a couple of weeks ago, the Dawhit doctrine has never been more relevant than right now and it must be implemented, end quote. Dahi doctrine being the one that I just mentioned. And this is, as I said, not new. Whether in the context of talking about Palestinians in Gaza, long before the ongoing genocide, whether in the context of talking about the Lebanese and so on, there has been this chain of open utterances of genocidal framing on behalf of like Israeli politicians and military leaders. One needs to know this to understand why they act in certain ways in Lebanon. If it was just about targeting their enemies or whatever, that would be one way of doing warfare. But it wouldn't explain detonating entire villages as they've been doing during the so called ceasefire. It wouldn't explain spraying herbicide, which they did about a month ago over large parts of south Lebanon, including parts of Syria for that matter, which killed crops and so on. It would explain them not allowing farmers to harvest their crops. It would explain all of these things. What would explain all of these things is if you take into account what they say their intentions are in Lebanon, or at the very least what they want it to happen in Lebanon, if that makes sense.

[Dana Al Kurd]

Yeah, it really seems like the Israeli policy, especially now that there's been really no accountability for what happened in Gaza, is like basically to pursue maximum violence, including against civilians, and create, I think, kind of like a no man's land buffer zone around Israel. Now there are some elements of Israeli society that are like religious, Zionist, like messianic types who want to like settle and like expand. But aside from those, those people, like, I think even we would call like centrists in Israel or Like, the liberals in Israel are like, okay, well, yeah, we do need. We do need a buffer. So we need to flatten Gaza. We need to. We need to flatten southern Lebanon.

[Ilya Ayub]

Yeah.

[Dana Al Kurd]

And what this translates to, I mean, in Lebanon in particular is I think, you know, some estimates say over a thousand have been killed in just the past, like, two, two and a half weeks. Yeah. And then millions displaced, right?

[Steven Monticelli]

Yeah.

[Ilya Ayub]

20% of the country. Lebanon is one of the smallest countries in the world, and south Lebanon is one of the only regions in the country that you might call like a breadbasket in terms of agriculture. So, yeah, 20% of the population has already been displaced, and those are those that could be registered. So you can imagine numbers being higher than that. And as I said, a lot of those people have already been displaced a number of times before, even in 2024, when there was the initial escalation, but many of them even going back to 2006 when there was the war, and in some cases even further back in the 80s and 90s when the Israelis occupied southern Lebanon. And I guess this is really important to note because obviously what's happening today is connected to the war on Iran. Of course, it's directly connected, but if one only knows this, I think we miss what I would describe as a bit of an Israeli obsession with Lebanon specifically for a long time. There's, like, historical roots to all of this. It even goes back to the Israelis having ties with the local Christian far right in the 60s, especially as the 70s and 80s, like during the civil war, during the civil war in Lebanon. And a bit of this almost ideological thing of like, we will focus on the non Muslims and hope that they're on our side, that sort of thing, which is a policy that the Israelis have done within Israel, Palestine and in Syria. This is an ongoing thing as well, and so on and so forth. I really want to emphasize this because I have had the experience when I read a lot of the coverage and listen to podcasts, what have you, that even among people who don't support the state of Israel, who are very critical of it, there tends to be, understandably, because Lebanon is less powerful than Iran, not as influential on the global scene or whatnot, but there's usually a tendency to link what happens in Lebanon directly to what's happening in Iran. And this has been true in the past three weeks. And as I said, this is, of course, partly the case. It's not like, completely irrelevant. Hezbollah did even state that the reason why they launched those rockets was to avenge the assassination of Day Atollah. So of course it's directly related, but there's all of this, like, wider in all the context that can help, at the very least, explain why the Israelis are doing that in Lebanon and also help explain what's happening to Lebanon itself, which tends to be not as focused on.

[Dana Al Kurd]

I mean.

[Mia Wong]

Yeah.

[Dana Al Kurd]

Let's discuss for a moment where Lebanon was before these latest attacks, before the ceasefire, before October 7. For the Lebanese people, it has been increasingly unlivable. There's been a financial crisis, an economic crisis. Lebanon has hosted huge amounts of refugees from Syria, from Palestine, and continues to these conditions now where effectively, like what? Like, half of the country is, like, inaccessible, or some large portion of the country is inaccessible. The. The capital city is being bombed, residential buildings, like, there's. There's nothing kind of off limits. What is the situation now for. For regular people who first and foremost have not had any kind of, like, sense of accountability from their own government and have had also Hezbollah sort of, you know, acting unilaterally in some ways? Obviously, this does not excuse Israeli actions in any way. But what's the kind of, like, sense of emotion right now among Lebanese people?

[Ilya Ayub]

I mean, despair is, I guess, one word to describe it. There's definitely a sense of helplessness. Hezbollah is not a popular party in the country in terms of the percentage of the population. The recent actions, whether this one or after October 7th, their decision to join the war was unpopular and still is unpopular. This is something that the Israelis are trying to capitalize on, obviously, either because they want to just destroy the party or because as part of doing that, they also want to destabilize all of Lebanon. Sort of. Both of those things are happening at the same time. The current government in Lebanon is led by the guy who was the head of the ICJ when South Africa had started its case of accusing Israel of genocide like a year or so ago. So he's by no means naive of what Israeli intentions are. But I think what's really important to understand of what's kind of the mood of the country is the sense that no matter what we decide as a nation, it's completely out of our hands. And this goes beyond even questions related to Hezbollah and Hezbollah's actions, because, as I said, even when Hezbollah does not launch rockets or whatnot, the Israelis continue to violate ceasefires anyway. They encroach land anyway. They dynamite entire villages anyway. They spray those herbicides and so on anyway. And it's one of those things that. It's also important to know this, to understand why There are people, for example, in South Lebanon that, regardless of their personal feelings towards Hezbollah, don't see any alternatives because in fact there are none. Something that I know isn't talked about as much and certainly not covered as much is the fact that the armed force that is supposed to be the alternative to Hezbollah, the thing that we hear about all the time, that the Americans, what they want is for Hezbollah to be disarmed and for the Lebanese army to take over and so on and so forth. And this is basically the stated goal of the entire world in a sense, or at least a good chunk of it. And in fact, it's officially the stated policy of the Lebanese state itself. That is their intention as far as, like, their public declarations and so on. And they have made certain moves to that end as well. But the Lebanese army is the army of a very poor country that has been in economic crisis for a long time. When we had wildfires in 2019, there wasn't even enough equipment to tackle them. And like foreign government had to donate helicopters and stuff like that. And that Lebanese army is also heavily subsidized, if you want to say, funded in any case by the United States itself, the same United States that obviously heavily funds and arms the Israelis. Of course, the weapons that the Lebanese get is nothing compared to the weapons that the Israelis get. There's no such thing as an Iron Dome in Lebanon. None of these things are available to the Lebanese. And so effectively, what is being asked of Lebanon itself, and especially of South Lebanon, of Dahi and East Lebanon, ultimately of all of Lebanon, is that just accept your fate, just accept that there's nothing you can do about the Israelis. There's nothing you can do about their actions in Lebanon proper. I'm not even talking about any actions like rockets towards Israel. I'm talking their actions in Lebanon itself. And they're also asking Hezbollah, for example, to disarm, which in and of itself I am not opposed to. But in the context of what has been happening, in the context of what's happening now, I think it's ludicrous to imagine that people in a context like in South Lebanon, who have decades now, long experience of seeing Israeli occupation, of seeing Israeli troops on their lands, no matter multiple different prime ministers in Israel taking the charge and whatnot, but that continuing to be this kind of almost eternal fact, in a sense at least that's how it feels, they're being asked to just disarm and hope for the best. That's really effectively the policy towards Lebanon at the moment. I Saw an interview with one of the French ministers a few days ago and she was asked why aren't we doing more to help Lebanon by someone in the audience or whatever. And she said that we're sending humanitarian aid and we have UNIFIL forces in southern Lebanon and so on. UNIFIL forces, those UN peacekeeping forces, as I said, don't have a legal right to even retaliate against the Israelis, including when Israel bombs them, which it has done at least twice in the past few weeks. The Lebanese army rarely engages with the Israelis. They don't even have the means in the first place. And so what are people expected to do? And this is sort of the context in which everything else almost doesn't matter, like in terms of whether you personally like the Hezbollah. I certainly don't. And whatever one's personal feelings or even politics is towards a political party because they are also members of the Lebanese parliament, towards the state itself, whatever it is, that it really feels that ultimately it's like out of our hands. And this is like a component of this entire thing that I rarely see, to be honest, discussed as though there are two sides to the story or two equal armed actors for that even not armed, like equal states for that matter. And it's just not the case.

[Dana Al Kurd]

Yeah, thank you so much for laying that out like that. I think that you're right that it's not well acknowledged how disempowered the international community basically expects people in the region, including the Lebanese, to behave and like, accept the fact that they are collateral damage in Israel's perpetual desire for domination. American political scientist Nathan Brown just published this article called Israel's Forever wars for the Carnegie Endowment. His argument is that there's been a shift in the Israeli policy where he says it used to be deterrence. Domination and diplomacy have long blended in Israeli statecraft. And today he says they've been eclipsed by something harsher, quote, a preference for domination, degradation, and the prevention of the adversary's recovery. I mean, I think he's right though. I think that we've seen kind of a, at least a lower intensity, maybe not as high intensity, but we've seen a long scale policy of domination even before this moment. But I think this moment does definitely bring it out. Which brings me to my question of like, for Hezbollah in particular, in the last year, two years, like there have been assassinations. We saw the pager attack. You know, it seems that Hezbollah has been very effectively weakened. And since the Israelis are now kind of going all out, what do you think is going to happen to Hezbollah as, as a group set aside perhaps their public support or, you know, lack thereof.

[Ilya Ayub]

So it's important to note that Hezbollah comes from a certain context. They rose in the context of south Lebanon during the Israeli occupation of south Lebanon. They rose as the alternative to existing parties that were either seen as too complicit with the Israelis or maybe too weak or complacent or whatnot. And essentially because there was a need for something like Hezbollah at the time. And again, this is completely regardless of my personal opposition to a lot of their politics, whether it's in Lebanon or especially in Syria. But that question, if you want to call it the Lebanese question, is completely being sidestepped. It's not being tackled whatsoever. And in fact, it's not that dissimilar, I think, from the Israeli attempt to erase or try to pretend as though the Palestinian question as well can be completely sidestep, that they can just continue to pursue this policy of just complete domination, as you said, make these Arabic accord deals with the UAE and some of the other Arab states, for example, without any mentions of Palestine of Palestinians and so on and so forth. And in the case of Lebanon, it's less official because there isn't that component. But the spirit of it is pretty similar. There is a sort of legalistic framework of the land for peace. And I think explaining that at least briefly would, I think, contextualize the quote that you just read out to us here, that the Israelis occupied Arab territories in 1967, Palestinian territories obviously being Gaza, the West bank and East Jerusalem. Egypt, of course, was the Sinai, and Syria was and still is the Golan Heights. And so the land for peace worked. In the case of Egypt, they occupied the Sinai and then as part of a peace deal with Egypt, they returned the Sinai to the Egyptians. It didn't happen with Syria. The Syrian Golan Heights have been occupied since 1967, were effectively de facto annexed in 1981. They've been annexed for so long that Smotrich himself was born in an illegal settlement in the Sye and Golan Heights. And I'm mentioning this because the Lebanese state, the prime minister I mentioned earlier about what, a week ago, 10 days ago or so, said that he's hoping for a land for peace framework, which to me shows just how desperate even they are. They don't know what to do. They have no options in front of them. So what they're hoping is that by doing all of these things, public declarations against Hezbollah, by declaring some of their activities illegal, by I Think a few days ago they said the media cannot call them the resistance, for example, which is there in Arabic, how they would be referred to, and so on and so forth, these attempts to placate the Americans especially, and so on, and maybe show that we're doing something about this. Can you stop? The Israelis essentially haven't achieved anything. The Israelis have just escalated, continue to escalate, continue to bomb more and more and more, larger and larger parts of the country. But that land for peace framework, which is the framework since the 60s, basically is as far as I can tell right now the only thing that the Lebanese government hope that they can even use. But the difficulty in all of that, I don't think it's realistic because of the Syrian example. They have never given up the Golden Heights. I don't see any reason why they would if they do decide to occupy all of south Lebanon. And also because the shift, and this is what you were referring to with that quote, that person you mentioned, the shift in Israeli politics in the past few decades isn't even that, if you might call it strategic, that we're going to do the thing even if it's illegal, we're going to occupy land even if it's illegal. But the ultimate purpose of it is something that resembles some kind of diplomatic negotiation. It's domination almost for its own sake. There is no end goal necessarily. You mentioned there are of course religious Zionists, but you also have others that are not interested in settlements, they're just interested in destroying the land. Like destroying, having this so called buffer zone, which is a euphemism for just in no man's land, just destroying everything. And so the policy can shift in a sense, but the intention is to just try and dominate for as long as possible for its own sake. And this is a wider pattern in Israeli politics that I don't know how well understood it is, maybe a bit more now than before, because even before the ongoing war in Iran started, Naftali Bennett, who was the prime minister of Israel and reportedly wants to replace Netanyahu in the upcoming elections, said that Turkey is the next Iran. Virtually any Israeli paper center and further to the right, which is most of them, you read them. There is someone who has at some point in this, I'm not talking just a random person, I'm talking like a high ranking politician and military official at some point described like Turkey as being next. And what needs to be understood with all of this is not, oh, can they actually do this or whatnot, because maybe they can't. I Don't know. I hope we never find out. But it's that, like, they can't stop. It's becoming an end in itself. There has to be an enemy. There has to be a constant creation almost of like, an external enemy in, like, in Israeli political discourse today, because nothing else works in Israeli politics. And this is a shift in Israeli politics in the past, I'm going to say, I don't know, two or three decades. I don't know how one would start counting that shift. And it does go back to the Palestinian question in the sense of, like, them not wanting to address it at all, not even pretending that they're going to, because they've been pretending, you know, obviously not actually doing it, but even pretending that they were doing so with the Ostro Accord and whatnot. There isn't even that. I think it's useful to understand their attitude towards Lebanon as at least in part a continuation of that attitude towards Palestinians. So in many ways, the Palestinian question itself remains the one that they want to avoid at all costs and whatever that means. Bombing Iran, bombing Lebanon, bombing other countries later, I don't know, obviously bombing Syria. They've already done it, you know, and so on and so forth.

[Dana Al Kurd]

Genocide as a tool of conflict management.

[Ilya Ayub]

Yeah, yeah. It's just domination for its own sake because they can't imagine any kind of other alternative and they haven't had a need to do so because, you know, as you said, they've gotten away with a lifestream genocide for over two years now. Why would they think differently about Lebanon, a very poor country that, you know, doesn't have that many resources and whatnot. Which isn't to say that they will succeed and they will win and so on, but this is what they've been saying. This is the intention.

[Dana Al Kurd]

I think that's very valid. I mean, it's not a coincidence. You said, you know, you would try to trace it back to like, the past two or three decades. It's not a coincidence that this mentality and this, you know, reorientation of Israel's entire policy especially comes after the end of the second Palestinian intifada and then not even just no meaningful negotiations, no negotiations at all. Like you said, there was the land for peace mantra. The idea with that is that they were going to get peace if they give back land, but the underlying assumption of that is that they would be held accountable by the international community, by their own allies. After the second intifada, basically the Americans and the international community gave up essentially even pretending that Palestinians would ever get Anything this has culminated in now and Israel, that, as you said, it's domination for domination's sake. And they think that they can maintain control in this way. Now Turkey is going to be a different beast than Iran. Turkey is a NATO member, but as we've seen in the last couple of weeks, like they don't care about blowing up the entire region. They don't care about the Strait of Hormuz being closed. They don't care about oil fields being attacked. They don't care about, you know, the global economy tanking. Like, it's not inconceivable that they attack Turkey. Even if the outcome might be different or we might see like further escalations. It's not inconceivable. And now I just want to point this out, the very kind of pro Israel think tank in Washington, the Foundation for the Defense of Democracy, Their new line now is to say land for peace is outdated. Now we need to pursue instead peace for land.

[Leo Yu]

There you go.

[Dana Al Kurd]

Yeah. Which means acceptance of Zionism earns these people a right to govern themselves.

[Ilya Ayub]

It's a political vision that does not see the other as human, as having agency, as deserving anything really. It's not like they have an opposing side on an opponent that they want to defeat, but ultimately have some kind of settlement and move beyond that or whatnot. There is no long term plan is what I'm trying to say, I guess, and maybe to emphasize a bit more in the case of Lebanon. So what happens next for Hezbollah, for example, I'm not entirely sure. I don't think anyone really knows. It seems clear that the Israelis underestimated their capabilities. But to what extent that will matter if the Israelis continue to just bomb and bomb and bomb Lebanon for weeks on end, if not months on end, and so on, I can't tell. What I can tell is that in the same way as the Israelis want to ignore the Palestinian question, but it's still, it's still there. It haunts them in a way, because I work on hauntology in case of Lebanon, there is also that in many ways that if you look at the shift in discourse even within Israeli politics from, let's say, 70s, but especially 80s onwards, I'm not going to say it was never good. But there was a stronger component of the Israeli politicians, let's say a higher percentage of them anyway, that were, for lack of a better term, pragmatic, that were willing to have concessions, that were willing to have whatever, because if only because they just did not want to deal with occupying a foreign country that they had no intention to legally annex, as they did with the. Legally, none of this is legal, but within Israeli law, I mean, as they did with the Golan Heights. And so that's what I'm saying in the case of Lebanon, that it's almost like the worst case scenario is what's currently happening. And that's like completely regardless of what happens to Hezbollah because Hezbollah can disappear tomorrow and the problem will continue to be the same, if not just get worse. The country has no economy to speak of. The currency was already devalued during the economic crisis, was one of the highest devaluations in the world. And there are no prospects going forward in terms of making this a country that can even sustain itself. It's already very import dependent. But if you exclude South Lebanon and it being a breadbasket, East Lebanon as well, by the way, is also a, a breadbasket. And that's another area of Lebanon that the Israelis have been constantly bombarding. To paraphrase that Israeli minister, that like Lebanon is not a state, it's not a nation. It doesn't, it doesn't. It's just a place that's, that's on the map. And that will pose a problem, obviously first and foremost for us, like for the Lebanese and people who live in Lebanon. But it is also a problem geopolitically, it's a problem internationally. It will freak out the EU in terms of the refugee crisis because the EU has actually counted on Lebanon to keep a lot of people in Lebanon. They extend like a billion euros, I think it was two or three years ago or something like that. I wrote about it for just a year at the time actually, because Lebanon had the highest percentage, maybe still does now, I don't know, of refugees per capita, so to speak, compared to citizens in the world. 1 million or so Syrian refugees with roughly 5 million Lebanese or something like that. Along those lines, there's no census in Lebanon. So I'm saying all of this to sort of emphasize why there is this sense of despair in the country and why if that's not even remotely addressed, whatever fires we're seeing now, whatever like horrors we're seeing, I, I just don't see any, any way they will stop anytime soon, whatever happens, even to Hezbollah next. There's no reason to imagine that some other group wouldn't be formed at some point because people live there. People are from that land. We're talking about a million people. They have nowhere else to go. It's not like the Lebanese passport is so good that you can just, you know, go on a flight and go elsewhere. There's nowhere else. They're just going to stay in Lebanon. And many of them will want to, of course, go back to south Lebanon. This problem is not going away. But if you hear the rhetoric of Netanyahu and your other politicians, this is not part of the picture. This has nothing to do with what their intentions are. They're exclusively talking to other Israelis. The debate is not whether we should destroy south Lebanon or whether we should destroy Lebanon itself. The debate is what do we do once it's destroyed. And even that is barely a debate. But that's the extent of where it goes in terms of Israeli discourse. And yeah, I guess maybe just to drive the point home, that if the Israelis themselves are not stopped in one way or another by their allies, obviously America has the biggest leverage, or the EU being the second closest one in one way or another, whatever the means are. Economic boycott, withdrawing your ambassador, as Spain has done a couple of weeks ago, but just like on a global scale, like even maybe dwarfing the boycott campaign against apartheid South Africa at the time, this problem is just going to expand. And people listening to this, of course, see that, see a version of that. Iran can just close the Strait of Hormuz and then suddenly everyone. This is everyone's problem. Israel and America bombing those oil depots. And of course, Iran has also done that in retaliation, but proportionally, still more. The Americans and the Israelis has polluted. I forgot the number, but the equivalent of 84 countries combined in terms of the toxins released in the air. These are things that people in Iran are breathing in. And the entire region relies on desalination plants. And the Americans bombed one in Iran, Iran retaliated and bombed another one in Bahrain. If that continues, who knows? There's been increasing attempts, at times actual strikes, including just yesterday against nuclear facilities or close enough to nuclear facilities. So who knows what would happen then. To say it's out of control would be meaningless at this point. But there are levels of where this can go. And Lebanon is, in a sense, deceivingly small. There's a book called Beware of Small States that talks about Lebanon, because a lot of the world is happening in Lebanon, to put it maybe metaphorically. And the trends that are being done to the Lebanese or to people in Lebanon, like the dahe doctrine in 2006 was then used in Gaza, obviously. And now they're saying that they're going to use the Gaza methodology in Lebanon, just like it came back to Lebanon, in a sense. But the point is that this will continue. There is no objective reason to believe that if Hezbollah is destroyed and completely disarmed and what have you, that this problem is going to go away, because if anything, a new beast of some kind is going to be created in the fires in the same way that Hezbollah was created in the initial ones. And so, yeah, the problem ultimately, and I say this as someone who has been campaigning, writing, gotten death threats from Hezbollah supporters in 2019 when I was, as part of the protest, we were beaten up by them. This comes from no sympathy whatsoever towards them. It's just an acknowledgement, I'm also a historian, that they come from a certain context. And if that context is not acknowledged at all, and in fact, the conditions that brought them are now much worse than even the 80s, why would we believe that something else won't come along later on in one way or another? And this notion that the Israelis have just a buffer zone and then destabilize Lebanon endlessly, or whatever it might be, it also comes from this sort of imperialist hubris that they believe that this won't harm them in one way or another, that they can endlessly and permanently have a neighbor to their north that has a lot of armed components and also constantly at war or whatever it might be. It's hubris. It's imperialist hubris. And it's also extremely, extremely dangerous, even beyond just what would happen to people in Lebanon.

[Dana Al Kurd]

Yeah, it's hard to, like you said, underscore how apocalyptic this is turning out to be. Whether it's, we're worried about the refugee waves that are going to be generated because of this, whether we're worried about the ecological impact, whether we're worried about non state actors, militia groups, violent groups emerging in the future. Like on every level, this is not sustainable. I don't know. I feel like I'm screaming into a void. Except we've known, we've known, like you said, for decades that this is not sustainable. This is not a sustainable situation in the Middle east. And I want people to know that this is not a Trump problem. This has long been a problem of American decision makers. Biden in particular, also, like, bears a lot to blame for this situation. It's just like you said, it's. It's an imperial hubris both on the part of Israel and the United States. But it's also at its root, the, the fact that they completely dehumanize people in the Middle East. Like they, they don't see them as, as human beings that will have human Reactions. So, yeah, I'm not saying. I'm not adding anything to what you're saying. I'm just emphasizing here because I'm as outraged as you.

[Steven Monticelli]

Yeah, yeah.

[Ilya Ayub]

And the thing is, it's sort of the same principle, in a sense, of that same understanding that also led me to, like, for years now, to oppose the Iranian regime. It's the same understanding. It's not just that their brutality towards people within Iran, of course, but they have engaged in imperialist campaigns in Syria, most notably, but also in Iraq and in Lebanon. It's like a different kind of thing. But there is that component of it as well that hasn't contributed to make them a better opponent of the Israelis or the Americans. If anything, it's made them weaker. One of the many problems, but I think the biggest one now is that this is, and this is completely regardless of the ethics of the Iranian regime, which I've opposed for several years as well. This has nothing to do with supporting them or excusing their actions or anything like that. By just understanding why the Israelis are acting, specifically the Israelis are acting the way they have been acting for years now, there is this tendency, I mean, if you go on the Garden, for example, now you see, like, crisis in the Middle east, and then you can click on it and then just go back years and years and years as though it's the same thing, as though, like, you know, it's just this place that has crises. And in almost like you expect that this will happen. But as I think people know a bit better now with the global component of it, this also has a global ramification. Even the technologies that are being pioneered, if you want, by the Israelis and also by the Americans to some extent in places like Gaza, then get exported elsewhere. Palantir is now going to be, apparently, AI is now going to be a core component of the US Military. These are things that are like. Because this, I mean by, like, Lebanon is deceptively small, is like, it's not important geopolitically for the most part, but because that is the case, and of course, Gaza as well, then it allows. It has allowed the Israelis to get away with a lot of things. So maybe this is, I don't know, a cliche or, I don't know, it's a meaningless thing to repeat. But the problem really goes back to impunity. The problem really goes back to the fact that nothing the Israelis have ever done, at least in the past several decades, has had any consequences to them, to what they do to the region and so on. And this is absolutely a bipartisan problem in America. None of this would be possible without the Americans. There's a very good argument to be made that if we're talking about the Israeli occupation of Palestine, we need to say the American Israeli occupation of Palestine, the bombing of Lebanon, we need to say it's also none of this would be physically possible, diplomatically possible, economically possible, were it not for this unconditional support that the Israelis have gotten from the Americans for decades and decades now. If Biden had done anything about Israel's genocide in Gaza, really almost anything, I don't think we would be where we are today. And so, no, this is not a Trump problem. It's just that Trump being Trump is making it much worse, speeding it up, it's just exploding everything even faster, speeding it up and adding new dimensions to it and so on and so forth. But the problem goes back to American imperialist hubris, a lot of people not knowing what they're even doing in the region and the consequences of it all. So, yeah, I'm not someone who tends to be very pessimistic necessarily, and stuff like that, but there's a lot of ways in which what is currently happening in terms of the Israeli and American war in Iran and Israeli war in Lebanon and so on, that can just go to different levels that I generally, and I'm someone who has even reported on conflicts for a long time now, generally struggle to even imagine. And I don't want to sound like I'm just panicking or anything like that, although there is a component of that. But it is a real problem that if Israel is not stopped in any way at this point, this will continue and there is no objective reason to believe otherwise.

[Dana Al Kurd]

Yeah, extremely alarming to say the least. But thank you, Ilya, so much for making the time to explain this. I'll link to the Fire these times in the show notes. Ilya has a excellent podcast and it's not Lebanon specific. It's kind of an internationalist perspective. Full disclosure, I've been on it many times. I've produced some episodes, so. So yeah, there's not a bias, but it really is a good, very good podcast. In any case, thank you so much, Ilya, and hopefully we'll have you on on better times.

[Ilya Ayub]

Thanks. Thank you. Then thank you for having me.

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[Angela Yee (Ad Segment)]

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[Mia Wong]

welcome to It Could Happen Here, a podcast where a bunch of incredibly convoluted and very silly financial instruments. Governments destroy the entire world economy. I am your host, Mia Wong, and with me today is someone who does not spend all of her time deep in the bowels of arcane bullshit written by different Federal Reserve boards. And that is Molly Conger, who is the. The host of the Absolutely delightful. I mean, okay, I. I guess this is a who is really winning here kind of question. In terms of the things we research

[Angela Yee]

now, you spent a lot of time reading stuff written by Federal Reserve guys. I read a lot of stuff written by guys who want to kill the Federal Reserve guys. Yeah.

[Mia Wong]

And.

[Angela Yee]

And you know what? I still don't know what the Federal Reserve is, and I'm not going to find out.

[Mia Wong]

You know, I. I don't actually think knowing what the Federal Reserve is, somehow

[Angela Yee]

it doesn't change anything.

[Mia Wong]

I don't think it's actually relevant to this. I mean, it kind of. It's. Obviously, it's relevant to everything, but what

[Angela Yee]

Mia means to say is the reason I'm here is because, I don't know, economy is. And at this point, I'm afraid to

[Mia Wong]

find out, and unfortunately, your worst fears are happening.

[Angela Yee]

Don't worry. By the end of this, I will not understand.

[Mia Wong]

I am going to attempt to explain the economy. And by, by the economy, I mean shadow banking. Yeah. Also before, before I go into this, though, you should. You should listen to weird little guys. It is. It's really good. I like it. All my friends really like it.

[Angela Yee]

Thank you.

[Mia Wong]

Yeah, it's somehow a nice, comma, kind of relaxing show about Neo Nazis.

[Angela Yee]

So, yeah, it's a very chill vibes for a show about guys who are trying to, like, blow up school buses.

[Mia Wong]

Yep. So, all right, you know, I'm reading this. I'm looking over this script. Miraculously, this isn't. Oh, wait, hold on. I think I cut the part where people blow up school buses. There was legitimately a segment in here that I might put back in where someone blows up a school bus.

[Angela Yee]

But what a crossover event.

[Mia Wong]

Oh, boy, oh, boy. The Saudis really good at that shit. Turns out. Okay. Okay, but let's get back to the topic at hand, which is, what is shadow banking and why does it matter to all of us people who live in the normal real world and not in fake finance world.

[Angela Yee]

Does it have anything to do with shadow wolves?

[Mia Wong]

Unfortunately, no.

[Angela Yee]

What about shadow facts?

[Mia Wong]

Sadly, actually, there probably is a connection between the financing for the Lord of the Rings movies and shadow banking. I'm just too tired to work it right now.

[Angela Yee]

I've dragged us off track and we haven't even gotten on track yet. What is shadow bank?

[Mia Wong]

Okay, so the good news, the good news. This is the first, it's not the last piece of good news. You're going to get this episode. But comma, the definition used by most non academics is actually not that bad. There's a pretty good. It's very wishy washy because it's a congressional report. And so it's specifically not supposed to be taking a stance in either direction on anything because it's the Congressional Review Office and they're supposed to be neutral, et cetera, et cetera.

[Angela Yee]

Allegedly.

[Mia Wong]

Yeah, right. You know, and like, obviously they're not, but like, you know, so it's like kind of fine congressional report on the subject. And they do the thing that almost everyone does, which is they go back to the definition created by the Financial Stability Board. And I'm just gonna. I'm just gonna quote that because it's not that bad.

[Robert Evans]

Quote.

[Mia Wong]

Financial activities facilitated by institutions other than central banks. Banks or public financial institutions.

[Angela Yee]

So it's banking that doesn't involve a bank?

[Mia Wong]

Yes.

[Angela Yee]

Canceled. I'm out. I'm out already.

[Mia Wong]

Yes.

[Angela Yee]

And they don't mean like me loaning you $20?

[Mia Wong]

No, no, no, of course not.

[Angela Yee]

They just mean unregulated banking.

[Mia Wong]

Oh, yeah.

[Angela Yee]

Which you can't legally call banking.

[Mia Wong]

I mean, you actually can legally call it banking. It's just things get weird really quickly.

[Angela Yee]

I mean, I'm not, I'm not a bank understander, but I know at least in Virginia, you can't incorporate a business that has the word bank in the title unless you are legally a bank. Because it. Because that's like misleading.

[Mia Wong]

Yeah. I don't think they can legally call themselves a bank, but I guess you can call it banking activity.

[Angela Yee]

That's stupid. And I'm mad already.

[Mia Wong]

Yes. Oh, you're gonna get so much more mad by the end of this. So the base definition is it's not that complicated. Right. It's something that does banking stuff that is legally not a bank. You know, and so we could talk about what, what kinds of things is this? Right. It's like private equity firms. It's hedge funds. It's Venture capital firms.

[Angela Yee]

So it's like evil stuff that ruins the world for no reason except for like 10 guys make money.

[Garrison Davis]

Yeah, but it's also, you know, pension

[Mia Wong]

funds, it's like insurance companies, it's sovereign wealth funds, business development companies, repo markets, broker dealers, special investment vehicles, securitization vehicles, money market mutual funds, asset backed commercial paper conduits.

[Angela Yee]

Hey, here's the thing, Buddha. Most of those things you just said to me are fake and they make me upset.

[Mia Wong]

It's really bad.

[Angela Yee]

Sovereign dwell fund. Shut up. That's not, that's nothing. I still, you know, all these, all these things are just like different ways of saying like you're poor and you're gonna die.

[Mia Wong]

Yeah. I mean the funny thing is sovereign wealth fund is like kind of a less fake one in that it's like it's all fake. Hey, this is like it's all fake. It's the. Well, it's like this. The Kingdom of Saudi Arabia has pooled all of the money it's gotten from its like horrific crimes and put them together into one giant thing. And that's a sovereign wealth fund.

[Angela Yee]

Oh, so it's good is what you mean.

[Mia Wong]

No, I am, I am a notable. There is, by the way, a camp of people who believe that sovereign wealth funds are like a socialist thing and that you could use them to do socialism.

[Angela Yee]

I'm going to jump out the window.

[Mia Wong]

I think this is so stupid. Yeah, this is, we haven't even gotten into the nightmare stuff. So. Remember how I was talking about the financial Stability board definition in that congressional report, right? Where it's like, okay, this is a bank that does non banking stuff or a non bank that does banking stuff. Sorry.

[Angela Yee]

Oh, I guess we should say, I guess we forgot to say at the top. The reason you're explaining shadow banking to me is because we saw an article last week that what, those, those not banks were putting a stop on withdrawals from their not banks. And I didn't know what that meant.

[Mia Wong]

Yeah, that's amazingly. This, this is so convoluted. We're not even going to get to that this week.

[Angela Yee]

Right. But like that's, that's why we're explaining.

[Robert Evans]

Right.

[Mia Wong]

There's like, yeah, there's like, there was like a mini bank run going on with these like shadow banks.

[Angela Yee]

No, it's not banks.

[Mia Wong]

Yeah. So we're going to get into how that can happen and why. But, but before we get there, we need to talk about. All right. To get a sense of the complexity of this. Right. The congressional report like the accepted terminology for this is not shadow banks. It is, right?

[Angela Yee]

That can't be their official name. That's not their government name.

[Mia Wong]

No, it's. It's non bank financial intermediation. Now what the fuck is that? And this is where this episode goes completely off the rails. Because the components of what count as intermediation are so complicated. I am not going to try to describe it until literally the end of this.

[Angela Yee]

I mean, is it like. What is Venmo officially like? Venmo is not a bank, but it provides like financial services.

[Mia Wong]

Actually, I. It might because it's.

[Angela Yee]

Because that's like a financial intermediary, right?

[Mia Wong]

Yeah, it might technically be a non bank. I don't know what the regulatory structure is.

[Angela Yee]

It's not legally a bank.

[Mia Wong]

Yeah, I think that technically is one

[Angela Yee]

score one for Molly.

[Mia Wong]

Yeah, but okay, so this is gonna get really bad. Okay, so when I first started researching this episode, right. The first thing that I click on is the Federal Reserve's chart of how the shadow banking sector works compared to the noble banking sector. Molly, you have seen this because I posted it as a joke in our group chat. This chart, I have like a very, very large, like, it is like a big, normal ass sized monitor that I like, do my work on. I had to zoom in to 380% just to make out the letters that label the boxes on this chart. If you want to read it, you have to zoom in to 500%.

[Angela Yee]

That doesn't seem like a well made chart.

[Mia Wong]

No, here's the thing. It's actually really good. It's just this complicated. I learned later from a paper by Copenhagen Business school professor Odni Helged. We're going to come back to Helgadottir's work a lot in this episode. But I learned from her because she has also experienced seeing the same chart and going, what the is this fuck ass chart? I found out that the Federal Reserve recommends that in order to have the diagram be legible, you are supposed to print this chart as a three foot by four foot poster.

[Angela Yee]

Oh, that makes sense. Like meeting style, but like on a big easel. Put it on easel.

[Mia Wong]

Yeah, right. But like again, this is. This is a diagram that he's just labeling the parts of the system and making and making like a line that shows how stuff moves through it.

[Angela Yee]

I guess I still don't know what we're talking about.

[Mia Wong]

Yeah. So this is what we're going to get into in a second. But first we have to talk about something even more bleak. Which is that. Oh yeah, by the way, these like, non banking bank things like these, like all these like venture capital firms, all these hedge funds, all these fucking weird ghoulish banks that are not banks. Yeah. They have twice as many assets than the regular banking system.

[Angela Yee]

Oh, that doesn't seem good.

[Mia Wong]

Oh, it's about to get worse. It's about to get worse. Molly, that's.

[Angela Yee]

That's like saying I keep 70% of the food in my house outside on the porch. Like. No, it goes in the fridge.

[Mia Wong]

Oh, it's so bad. It's so bad. So, okay, there's a pretty good congressional report that I was talking about earlier that has this terrifying quote, quote, as of 2023, the broad measured total financial assets and narrow measure assets at NBFIs, this is the shadow banks, reached $85.7 trillion and $22.2 trillion respectively in the United States.

[Angela Yee]

But that's more than our gdp.

[Mia Wong]

That's almost three times our gdp.

[Angela Yee]

So that's a fake amount of money.

[Mia Wong]

Yes.

[Angela Yee]

That's not real at all.

[Mia Wong]

But it kind of is. Right. These compared to total financial assets of $31.1 trillion at banks in the same period. So again, this is, this is almost three times our GDP in assets that they manage or control.

[Angela Yee]

So where does the money live?

[Mia Wong]

In a whole bunch of unbelievably convoluted bullshit. Like combinations of like loans and real estate and stuff like that.

[Angela Yee]

So like, okay, imagine this is Schoolhouse Rock and instead of like the singing bill, you're like a dollar bill. Like, where are you?

[Mia Wong]

We are about to explain this.

[Angela Yee]

Where does the money live?

[Mia Wong]

Yeah, so, okay, okay, we're, we are about one, two paragraphs away from getting to this. Or like one paragraph. Okay, so the other thing that's very important about this, and this is something Molly was kind of touching on at the beginning of the episode. Maybe I should have opened with this. Yeah. These people, these are the people who blew up the economy in 2008.

[Angela Yee]

Well, yeah, because they're, they're making stuff up.

[Mia Wong]

Yeah, it's so, it's so bullshit. Molly, you're gonna get so mad.

[Angela Yee]

This is Calvin Ball. Fuck you. I win.

[Mia Wong]

Yeah, it literally is. It's nonsense. It's gibberish. They're doing fucking betting markets with the entire world economy.

[Angela Yee]

Oh, yeah, we can all do that now.

[Mia Wong]

Yeah, it's fun. It's like we, we, we now have the power to do the shit that destroyed the entire world economy in 2008. So the thing about shadow banking and the Reason why it's complicated to explain is that it's a catch all term for like a million types of institutions that do different things. Right. The commonality they have is that they're all not regulated by the banking regulations.

[Angela Yee]

Right. It's like we found a way to do financial crime that's not illegal because they forgot to make this illegal.

[Mia Wong]

Yeah. And you know, but, but the thing is it's so embedded into the system that like the US debt working is dependent on the shadow banks buying it.

[Angela Yee]

Like, I don't believe in that either, so I'm good.

[Mia Wong]

Oh, it's so fake. I. Molly, I'm not even going to attempt to explain what an overnight repo purchase is to you because it's the fakest thing I've ever seen where they just, they, they make $1 trillion exist overnight and then it stops existing at the end of the night. It's incredible.

[Angela Yee]

I love how much of the economy is based on guys just imagining stuff and agreeing on the thing they imagined and then trading their imaginary tokens like this. Fucking pogs. Grow up.

[Mia Wong]

Yep. This is, this, this, this is, this is unfortunately what, what our entire world is based on. It's so fun. Oh God. Okay, so what, what is actually shadow banking? I've given you like the broadest definition possible, which is like it. Again, it's the, it's doing bank shit without being a bank. But let's go back to the beginning of the term, which is where most people tend to start or get to eventually. This is from an IMF paper quote. The term shadow bank was coined by economist Paul McCully at a 2007 speech at the annual financial symposium hosted by the Kansas City Federal Reserve bank in Jackson Hole, Wyoming. And basically it's institutions that borrow money in the short term through money markets to finance long term loans. But they aren't banks, so they can't go through the Fed.

[Angela Yee]

They're financing loans with other loans.

[Mia Wong]

Yeah, we're gonna so from, from, from a not bank.

[Angela Yee]

Yeah, but the big loan is from a real bank and then the little loan is from a fake bank.

[Mia Wong]

Give me.

[Angela Yee]

And none of the money is real.

[Mia Wong]

Hold on, hold on. Okay, we're, we're, we're going to get there. We're, we're going to explain this in terms of burgers. It's going to be okay. I believe in us.

[Angela Yee]

Perfect.

[Michael Phillips]

Perfect.

[Mia Wong]

Yes. But the other thing he describes is, is, is. And this is from Helga daughter quote in the speech he describes shadow banking as the whole Alphabet soup of leveraged up investment conduits, vehicles and structures. So what he's talking about specifically is these are the guys who blew up the economy in 2008. Like, these specifically. This is what he's talking about. Right. These are the people who took a mortgage and then did a bunch of bullshit to it in what's called a securitization chain. They did a bunch of bullshit to it so you could give the loan to someone else so you could sell it to someone else. And this blew up the entire world economy. That's what he's talking about. He's talking about the banks that are not banks, the shadow banks that did all of this bullshit to turn, like, someone's mortgage into a fucking thing you could bet on.

[Angela Yee]

So selling debt is like selling the idea of future money.

[Mia Wong]

Yeah.

[Angela Yee]

And then sometimes that future money doesn't come.

[Mia Wong]

Yeah.

[Angela Yee]

So it doesn't exist.

[Mia Wong]

So, so, okay, I will say you do not need to understand this yet, because we haven't, we still have not started the actual explanation.

[Angela Yee]

I'm never going to.

[Mia Wong]

I believe in us. We can do this. It's not that bad. Okay.

[Angela Yee]

I'm not torturing you on purpose. I'm just.

[Mia Wong]

No, it's okay. I, I, I believe in you. So I, I want to mention that I'm, I'm very indebted here to the paper I mentioned earlier from Copenhagen Business School Professor Adni Helgadottir, who wrote a. She, she, she wrote a very good simplified explanation of this in her Review of International Political Economy article called Banking Upside down, the Implicit Politics of Shadow Banking Expertise. But, but okay, as you can tell by the fact that it's called Banking Upside down, the implicit politics of shadow banking expertise. This has been. When she's simplifying it, she's simplifying it from, like, economist down to like, a political scientist or an anthropologist can understand this. I am about to attempt to simplify this down to. A regular person can understand this. So I'm drawing on a lot of her stuff for, for the first part of this explanation. But I am, I've turned it into burgers.

[Angela Yee]

So I'll do my best. I'm being very brave.

[Mia Wong]

Okay, so a shadow bank, Right. It's something that does banking. That's not a bank. So what do I mean by banking?

[Angela Yee]

That was my next question.

[Mia Wong]

Yes.

[Angela Yee]

I think we need to start with what is a bank?

[Mia Wong]

Yes. So first, so, okay, okay. And this is, this is, this is where we're starting here. What does a bank do?

[Angela Yee]

I put my money in it and they hold it for me.

[Mia Wong]

So. No, actually, and this is the interesting part.

[Angela Yee]

No, they do stuff with it.

[Mia Wong]

Oh, yeah.

[Angela Yee]

They're holding on to the promise of my money.

[Mia Wong]

Yeah. So. Okay, let's just look at this for a second. So, okay, so regular people give them money to store in the bank. This is called a deposit. The bank takes your money and loans it out, right. And uses that to make more money. This is how it pays you interest, right? Is that it's taking your money and it's loaning it out to other. To other people. It's buying things with it.

[Angela Yee]

That part I understand.

[Mia Wong]

Yeah. And this is obviously a cartoon image and I know there's going to be econ people who are going to be mad at me. Look, you. If, if you understand, why are they

[Angela Yee]

listening to this if you already know what this means? Go away. This isn't for you. I'm not humiliating myself for your entertainment.

[Mia Wong]

Like, like for, for the political economy. People here, when I say stuff that might. That's like, technically kind of fuzzy, it's

[Angela Yee]

for me, the podcast idiot.

[Mia Wong]

Yeah. Like you, you understand this. Like, I'm working at the level of hamburgers here. So, like, we have. We have to do some abstractions. So. Okay, the important thing for our purposes, right, is that there's two things here, right? There's like the deposit, the money you give them, and then there's the loans, right? And these operates on different timelines, right? You can take the deposit out at any time, at least in theory, but they can't get the money from the loan back at any time.

[Angela Yee]

Right?

[Mia Wong]

Now this is like one of the critical things of what a bank is, is, is this timeline thing, right? It turns your. Your money, which you can take out at any time, into a different kind of thing. This loan, which can't be taken out immediately, right? And then they use that to make money. So this is called maturity transformation. This is a very simple concept they have made very complicated. This is one of the core aspects of that definition I was talking about earlier. This is one of the four things in it. But you now understand this. It's not that complicated. It's take short term, make long term, and we'll get to doing the reverse in a second.

[Angela Yee]

Oh, I don't think it works the other way.

[Mia Wong]

It's gonna go so badly. I mean, like, so badly.

[Angela Yee]

I don't know about bank, but just generally speaking, like, in terms of time and like, how like material reality works, I don't think it works the other way.

[Dana Al Kurd]

It's.

[Mia Wong]

It's not great. It's not great, Molly. It's not great. Okay, so. Okay. There is, however, a problem here, right. Which is what happens if everyone tries to get their short term money back at the same time?

[Angela Yee]

Oh, you can't.

[Mia Wong]

Yeah.

[Robert Evans]

Right.

[Angela Yee]

Have deposit insurance.

[Mia Wong]

Yeah.

[Steven Monticelli]

Right.

[Mia Wong]

Because the, the banks aren't holding short term cash. What they're holding is long term loans. And those loans, like, you can't pay someone a loan. Well, okay, actually this entire, the crux of this episode is they found that

[Angela Yee]

they did do that.

[Mia Wong]

Yeah. Yes. And it blew up the entire world economy.

[Angela Yee]

But if I, but If I wanted $40,000 out of my, if I had a checking account with $40,000 in it.

[Mia Wong]

Yeah.

[Angela Yee]

And they gave me my neighbor's mortgage as a promise, like that wouldn't work for me.

[Mia Wong]

That wouldn't work for me. No, that. No, no, no.

[Garrison Davis]

You need, you need, you need, you

[Mia Wong]

need something that can buy a burger and they're not giving you that. So. Okay, this is very, very bad. If people try to do this. It is called a bank run. It is not good.

[Angela Yee]

It's bad.

[Mia Wong]

Yeah.

[Angela Yee]

And so this, people get upset.

[Mia Wong]

This blew up the entire world economy so many goddamn times that eventually we got financial regulation. Now this, this regulation requires banks to have money that is like actual cash they can hand you, like right now on hand at all times. And the government gets to. And this is, that's a little bit. But like. Yeah, that's how it works. Right.

[Angela Yee]

Like, and it's insured by the government.

[Mia Wong]

Yeah. The government will give you your money back if the bank goes under up to like a certain amount.

[Angela Yee]

$250,000 FDIC insured.

[Mia Wong]

Yep. This is, this, this, that's, that's what that means, right? The government will give you your money back. But also there's, there's a trade off to this, you know, so this is a massive benefit for the banks, right? The fact, the fact that if they go under, all of their assets will be repaid by the government. It's a massive benefit for them because it means that, that putting your money in the bank is like, safe.

[Angela Yee]

Yeah, I love that. For me.

[Mia Wong]

Right? Yeah, it's good. Now the cost to the banks is that the feds get to see their balance sheet. Right? The feds get to see what they're doing with their fucking money and they get to make sure that these banks aren't doing insane shit.

[Angela Yee]

Okay, that makes sense. Because they're insuring it.

[Mia Wong]

Yeah. And that like, they're not doing like, unbelievably risky, awful shit. And also that they're actually holding enough money to be able to pay people out.

[Angela Yee]

Right. Okay, so far, so good. I. Wait, I understand. Bank.

[Mia Wong]

Yeah. Now, shadow banking boldly asked the question, okay, but what if you did all of the banking backwards? No one had access to the books, and the government will only pay you back if the entire world economy looks like it's going to die.

[Angela Yee]

I feel like at that point the government should just step back and just.

[Mia Wong]

Here's the thing, here's the thing, right? I, I, I, yeah. Like, I'm so down with this. Like, yeah, I don't know. Fuck it. Like, every single one of you motherfuckers is going to pay this off by working as a barista for 30 years. Like, fuck you. But the government was like, nah, we want, like, we want capitalism to keep working.

[Angela Yee]

Make every hedge fund manager work at a Waffle House.

[Mia Wong]

Yeah, fuck them. Okay, I'm gonna say something and then I'm gonna make a disclaimer. So the kind of shadow banks that did 2008 work in the opposite direction. They start with debt, they take that debt and they turn that debt into, like, cash, Right?

[Angela Yee]

Can I do that?

[Mia Wong]

No.

[Angela Yee]

Does that work for me at my house?

[Mia Wong]

No. So, okay, And I also wanna mention there's a bunch of other kinds of shadow banks. The kind of shadow bank that's going under right now is the kind of shadow bank that's like, exploding right now is a kind of shadow bank that's like, what if, what if a bank that wasn't a bank gave a completely unregulated loan with secret terms to a corporation? And that's the one that's going under right now, but for a long, long time. The kind of shadow bank that was really important to the global economy, and this is still like a massive portion of how all of the economic system works is these ones where you're trying to take debt and turn it into something you can trade for cash. So, okay, you take debt, right? You start off with a mortgage, okay? So these mortgages pay out over the extremely long term, right? But you want to be able to trade this mortgage for cash, right? And this is a process called securitization. Turning this mortgage into something you can sell for cash is making it into what's called a security. So now what happens, right, when it's packaged into a security, when there's a securitization process, and then like the regular bank, the regular bank sends the mortgage to the shadow bank, and the shadow bank, like, does like stuff and turns it into a security. And now what this means is that instead of you who paid the mortgage, owing money to the bank, you own it to the shadow bank or whoever the fuck the shadow bank sells it to. Right.

[Angela Yee]

Okay, so the real bank is involved? The real bank is involved.

[Mia Wong]

Yes. Oh, yes. The real bank is making so much money off of this. Is, this is why 2008 happened?

[Angela Yee]

Oh, because Wells Fargo did this with everybody's mortgage.

[Mia Wong]

Oh, yeah. Oh yeah.

[Angela Yee]

Okay. Because I couldn't figure out, because you said this is how 2008. And I was like, I thought Wells Fargo did that. That's a real bank. But the real bank was shadow banking.

[Mia Wong]

The real bank figured out a way to sell their mortgages. And it's going to get much worse as we go through this. But that's, that's what causes this. Right. Is like turning, is turning these mortgages into these like securities and like these like collateralized debt obligations and these like special packaged bullshit that you could sell to someone. So the way I would describe this is it's like. Do you know how a bond works?

[Angela Yee]

Honestly, Mia, I do not.

[Mia Wong]

Okay, let's do this. We can do this. Okay, so the kind of bond that you are normally likely to encounter is a government bond.

[Angela Yee]

Yeah.

[Mia Wong]

Okay. So you pay the government money to buy the bond and what the bond says is at a certain point in time you hand it back to the government and they pay you more money.

[Angela Yee]

Right, it's like a promise for later.

[Mia Wong]

Yeah, Right. So it's basically a loan, but it's a loan in a form where like the government's technically like selling it. And then the other thing about bonds, right. Is if you hand the bond to someone else. Well, okay, I mean this is technically bearer bonds, but like you can then give the bond to someone else. And now, and now if they give it back to the government, they get the Money in like 10 years, they get the money. Right, right, right.

[Angela Yee]

Okay, I get that.

[Mia Wong]

And you can sell these things. And this is what these people are doing with mortgages.

[Angela Yee]

That's not as like secured as like a government bond. Because if I have a hundred dollar government, like if I have a hundred dollar bearers bond, I know for a fact that on the date on the bond it's going to be worth a hundred dollars.

[Mia Wong]

Yeah, they're going to pay out. Right.

[Angela Yee]

But if it's the mortgage, the government's gonna pay it. But like the mortgage got the person who has the mortgage.

[Mia Wong]

That's not. Yep.

[Angela Yee]

That's not real. That's not money. Nope.

[Mia Wong]

Yep.

[Angela Yee]

That's like, that's, that's a promise. But like my hand is behind my back.

[Mia Wong]

Yeah, it's. It's a shit show. And this whole process is the largest sort of. I'm not sure if that's actually the largest I would need to actually like get. I've never, I haven't seen in depth breakdown sectorally, but like none of this is real.

[Angela Yee]

You could just say, whatever.

[Mia Wong]

This, this is one of the most important kind of shadow banks because in order to turn this mortgage into a security, the moment you do that, you do this by creating what's called a special purpose vehicle or someone else creates one. It's called a special purpose vehicle. Yeah, it's. It'. A. It's a nightmare. It's a nightmare.

[Angela Yee]

I'm going to put this mortgage on a roller coaster.

[Mia Wong]

Yeah. It's fucking ridiculous. Right? It's a special purpose vehicle. It does a loop de loop. But the moment you create one of these, the moment you create one of these, like security mortgages, right, that's a shadow bank. You've created a shadow bank, right?

[Angela Yee]

Because that's not real banking. That's shadow banking.

[Mia Wong]

Yep. Because you're creating another entity that is not a bank. So that's doing the banking stuff.

[Angela Yee]

I thought that the banking and the shadow banking were like separate things, right? Because it's. The shadow banking is like.

[Mia Wong]

No, no, no.

[Angela Yee]

It's like, oh, they're doing non bank stu.

[Mia Wong]

They're all in on it.

[Angela Yee]

If the bank is doing shadow banking, I would, I'm stupid, but I would call that a crime.

[Mia Wong]

This is, this is another thing that cost 2008 because a bunch of what was.

[Angela Yee]

Why is it not a crime?

[Mia Wong]

Because our country is run by the bourgeoisie, Molly. That, that's why it's not a crime.

[Angela Yee]

You're just telling me this for the first time.

[Mia Wong]

Yeah. It's bad. So, so what, what, what happened, what happened in 2008? One of the things that happened, right, is so all of these regulators are supposed to be looking at the balance

[Angela Yee]

sheets of these companies, but they're hiding stuff off the books.

[Mia Wong]

Yeah. They were hiding these things in these like special purpose vehicles, like in these like shadow banks.

[Angela Yee]

They didn't open the trunks on the special purpose vehicles.

[Mia Wong]

Yeah. So no one could see the fucking dead bodies in the trunks of the vehicles because they weren't on the balance sheet that like the government had access to.

[Angela Yee]

What's the point of the balance sheet if you don't put the whole balance on it.

[Mia Wong]

I'm fucking.

[Garrison Davis]

I don't know.

[Mia Wong]

And this is, like, legitimately, when you read the accounts of, like, why shadow making has exploded. And by the way, it's exploded since 2008. It's like, way bigger.

[Angela Yee]

Exploded like in popularity or like, exploded as in, like, popularity?

[Mia Wong]

There's so much. There's so much more of it. There's so much more of it. Because also.

[Angela Yee]

Oh, because it went so well, I. You went so well in 2008 that now because.

[Mia Wong]

Because here's the thing. After 2008, we got, like, a little tiny bit of banking regulation, and the banks lost their fucking minds. And so more and more money went into all of these unhinged shadow banking things.

[Angela Yee]

Okay, but so like, when a toddler has a tantrum, you don't give them a billion dollars.

[Mia Wong]

When these shadow banks went under, these things were not backed by the government. The government bailed them out anyways.

[Angela Yee]

Yeah, they didn't have to do that.

[Mia Wong]

Nope.

[Angela Yee]

So they really. They learned their lesson. They really learned their lesson this time.

[Mia Wong]

Yeah. Like, they bailed out these banks and they fucking sold you out. And like, you know, like, one of the things that I think people have forgotten was there's this thing called robocalls during the Obama administration, right. Part of how the financial recovery happened was that all these banks would, like, go to courthouses, right? And they would just repossess mortgages on mass. Oh, and they had, like, a robot that was like, sign. It would just. It would just sign, like a blank check sign on, off on all these mortgages that were supposedly underwater. And they would just steal people's houses, People who were on top of their payments, people who, like, did no money. They would just take their houses. And this happened en masse. And this is like how the banks recovered was they stole everyone's houses.

[Angela Yee]

And that's a crime, right?

[Mia Wong]

Yes, it should have been a crime. Like, it was illegal. It didn't matter, though, because everything you're

[Angela Yee]

describing to me is a crime.

[Mia Wong]

It's so nightmarish. Well, here's the thing. Most of the stuff I'm describing is not a crime. This was actually a crime.

[Angela Yee]

But why is nobody in jail?

[Mia Wong]

Because Barack Obama went up in front of these people and said, I am the only thing standing between you and the guillotines. I'm pretty sure that's a direct quote.

[Angela Yee]

And why didn't he bring the guillotine with him?

[Mia Wong]

Because he wants the capitalist system to continue.

[Angela Yee]

I mean, that's a silly question. I know who Barack Obama Is that's. I'm just upset.

[Mia Wong]

It's not good. Okay, so let's get you another question that you asked, which is, why would you do this? Why would you do this?

[Angela Yee]

Oh, to make money.

[Mia Wong]

Yes, but it's actually more complicated than that.

[Angela Yee]

Oh, okay.

[Mia Wong]

So on the one hand, these assets, you know, a mortgage does make more money than just putting your money in a bank. Right. That's like the basis of banking is that they can use your money that's sitting in the bank and getting interest, and then they make more money by spending it elsewhere.

[Dana Al Kurd]

But.

[Angela Yee]

So they're just doing this because they hate us, not just to make money.

[Mia Wong]

No, there is an actual explanation.

[Angela Yee]

There's the third reason.

[Mia Wong]

So then why. Why would you ever have your money in a bank? Or, like, buy something like, say, if. Like, government bonds you can sell really quickly? Right. Why. Why would you ever want that? And the reason why is something called liquidity.

[Angela Yee]

Right. You want to be able to spend the money.

[Mia Wong]

Yes.

[Angela Yee]

Rather than wait 30 years for it to get paid back. That.

[Mia Wong]

Yes. Liquidity is just. How easy is it to turn whatever you own into cash? Right.

[Angela Yee]

Real money. Because most of what we're talking about is not money. It's the idea of money.

[Steven Monticelli]

Yes.

[Angela Yee]

Okay.

[Mia Wong]

So. So liquidity is. Is. Is literally. It's the burger test, Right. Can you buy a burger with this?

[Angela Yee]

Can I eat this?

[Mia Wong]

Money is like the most liquid asset, right? Because you can. You can. You can turn this into a burger.

[Angela Yee]

Right? So liquidity is the only part of this that's actually money. Everything else is not money.

[Mia Wong]

Yeah, well, liquidity is the measure of how money is it basically, like, how easy is it to turn this into burger?

[Angela Yee]

Is this a special vehicle securitization? It's not real, Mia.

[Mia Wong]

No, it's fake as shit. Right. This is not that complicated, right? If. If you. If. If it's like. Like, you can. You can buy a burger with $10. Yes. Right. That's liquid.

[Angela Yee]

Actually, you kind of can't these days.

[Mia Wong]

I know. I look, I look, I imagine a world where you can buy a burger for $10.

[Angela Yee]

Imagine. Imagine a burger.

[Mia Wong]

Yes. Imagine a burger. That's purchasable. Now, what you can't buy a burger with is, like, the 10 bucks that a guy you work with owes you for buying him a burger.

[Angela Yee]

Depends on how well you know the burger guy.

[Mia Wong]

Yeah, but that's. That's where things get bad.

[Angela Yee]

Yeah.

[Mia Wong]

Right? Now, the thing is, right, so the 10 bucks the guy you work with, like, owes you, not liquid. You don't have the money in your hand and if you want to get it from him, you have to like go ask him for the money. And Maybe he has 10 bucks and maybe he doesn't.

[Robert Evans]

Right.

[Mia Wong]

At which point you can't get your $10 back until he has the money.

[Angela Yee]

But that, but that $10 that I am theoretically owed is an asset that I have, not a debt.

[Mia Wong]

Yes, okay. Yes, stupid. No, now loans, loans are not liquid assets. Right? And they're not liquid assets because you can't get the money back like immediately.

[Angela Yee]

So I don't have $10 I can spend, but on paper I do have 10 theoretical dollars.

[Mia Wong]

Yeah, right. And this is also like most of what billionaire money is fake, right? Like most of their money is like in like a stock or some shit or like it's weird fake money.

[Angela Yee]

Like theoretically they could access this amount of money, but they don't have it. Yeah, it's not real.

[Mia Wong]

Now, okay, there is this question, so why, why would you keep your money in fake money instead of real money? And the answer is that it gives you more money back because say, say you're an asshole, right? And you're charging interest on your co worker for that burger loan.

[Angela Yee]

Right? So that $10 is actually worth more than $10 more money.

[Mia Wong]

Yes.

[Angela Yee]

So the $10 that I don't have is theoretically worth $12 worth more.

[Mia Wong]

Yeah, it's worth more than the money that you do have.

[Angela Yee]

I can get cheese on the burger.

[Mia Wong]

Yes. Right. And this is, this is like the fundamental thing of the banking system. Like one of them is that illiquid assets or like assets that you that aren't money are worth more than money.

[Angela Yee]

I guess like when I put a small amount of my savings into a cd, that's what I'm doing. Except normal style, they're doing it weird.

[Garrison Davis]

Yeah.

[Angela Yee]

Basically because that's like an illiquid asset that I'm, I'm, I'm trading the ability to access that liquidity for the potential of more money later.

[Mia Wong]

Wait, sorry, when you say C, do you mean like a, like a physical, like a disc? Like a cd?

[Angela Yee]

No, a cd. Like at the bank.

[Mia Wong]

Oh, like the, yeah, yeah, like the investment product. Yeah, sure. Yeah, yeah, sorry, I was like.

[Angela Yee]

Yeah, no, I'm not talking about buying compact discs.

[Mia Wong]

I, I, I went to sleep at 5:00am this, I'm talking about investing.

[Angela Yee]

Mia ever heard of it?

[Dana Al Kurd]

Wow.

[Mia Wong]

There's act, there's actually a really an annoying thing researching this episode because there's like, so CDOs are like a type of Loan that we'll kind of get to in a bit. But there's also a tech position called cdo. It's like chief something. Officer.

[Angela Yee]

Chief dookie officer. Who cares?

[Mia Wong]

Yeah, whatever the fuck, right? But like when you're trying to search for stuff that's like about CDOs, right? The other one keeps coming up. I hate it. Okay, okay. Locking in, locking in. Right.

[Angela Yee]

Lock and load.

[Mia Wong]

Now what if you both wanted more money and also the ability to buy a burger?

[Angela Yee]

I guess I would probably break one of Carl's fingers. This is the guy who owes me the $10. Carl.

[Mia Wong]

Yeah, but even then it's hard to even. That's like this is too hard for these people.

[Angela Yee]

I would go to Carl's house and kick him out of it.

[Mia Wong]

Well, yeah, so, but the other thing is like you are not very rich, okay? These people, if you are really, really rich, I am talking like billionaires, maybe like high, high class, multi millionaires. Well, you can go to a shadow bank. Oh right.

[Angela Yee]

You can get a loan based on the loan.

[Mia Wong]

No. Well, you're saying. So the thing is that you have money, right? But you want to turn your money into more money. Like you have like actual cash, right? Like you are, you are for example, a pension fund.

[Angela Yee]

No, I'm not.

[Mia Wong]

You have a shit ton of cash. Or imagine, imagine a pension fund, right? This is. Okay, this is also really hard because it used to be easier to explain this because like we used to live in a world where people had pension funds and had mortgages and now we no longer have pension funds or mortgages.

[Angela Yee]

I live in an apartment and I will always live in an apartment.

[Mia Wong]

Yeah. No. Okay, so like imagine, imagine a pension fund, right? You have a shit ton of money from your members paying into the fund, but it's cash. You need to turn that cash into more money. But also you're a pension fund, so you constantly have to take money back out in order to pay the people who are retiring.

[Angela Yee]

To pay old people. Yeah.

[Mia Wong]

And this is also a thing that like, you know, if you're just like a rich person, sometimes you want your, A lot of times you want your money in assets that are like, you can, you can turn back into real money but also make you a shit ton of money.

[Angela Yee]

Right? They need to sort of revolve a little bit. They need to be like. Yeah, I don't know, like a jello, like partially liquid.

[Mia Wong]

Yeah. And this is, this is what the shadow banks do, right? Because the thing that you can buy is one of those mortgages They've turned into like a security. Right. You can go buy someone else's debt, but because it's a magic security now. And these are called mortgage backed securities. And again, if you're old enough to remember. Yeah. Anything of anything about 2008, that's what blew up the whole economy is these mortgage backed securities.

[Angela Yee]

Yeah, I've heard of that. Because it was bad.

[Mia Wong]

Yep. Terrible idea.

[Angela Yee]

And so we're still doing that.

[Mia Wong]

Oh yeah, it's really cool. I mean, it's less. Specifically, the mortgage backed ones are less bad. Also they started doing it with like commercial retailers loans, which is incredible.

[Angela Yee]

Great.

[Mia Wong]

So that's really fun. They're also doing with other unhinged that we're gonna do like next episode. And what these people are really buying aren't just these like, you're not buying like one person's mortgage. Right, right.

[Angela Yee]

They're like pooled and like bundled.

[Mia Wong]

Yeah, yeah, they like, they bundle them all together and then you, you buy the rights to a percentage of, of the pool.

[Angela Yee]

It's not like when you sponsor like an elephant in Africa or something and they send you a picture of like a specific element.

[Weatherbug Ad Host]

Yeah.

[Angela Yee]

They don't send you, they don't send you a picture of the family you're harming.

[Garrison Davis]

No.

[Angela Yee]

These are the Joneses. You own their fucking house.

[Mia Wong]

Yeah, it's, it's, it's, it's a, it's a shit show. No, Well, I mean, eventually you might have to go figure out who that is because you like own whatever the fuck percentage of like the mortgages or whatever. But like, okay, so these are, these are just like someone else's debt that you're buying. And the people who can do this are, you know, people who have billions of dollars. It's not you, the listener. And by the way, if you, the listener, have billions of dollars lying around for some reason.

[Angela Yee]

Can I have some, please?

[Mia Wong]

Yes, please, please give me some of them so I can house like literally every trans woman and like trans person. I can, I can do it. Like, please give me your billions of dollars so I can, I can achieve this goal. But like, we're talking about, you know, like, like the pension fund of California. We're talking about mega corporations, insurance companies, the kinds of things that can actually buy these. Like, you know. Now this is where we get to one of the other problems, which is that these things are not insured. So.

[Angela Yee]

Yeah.

[Mia Wong]

What do you do in order to try to make it less risky? What do you get if you can't pay the loan back? And this is what's called collateral.

[Angela Yee]

I don't know. Swift punch in the nuts. Oh, no.

[Mia Wong]

They take your house, right? Yes, that's supposed to be the thing. So, okay, the way that, like, shadow banking loans tend to work is that they, they have collateral, right? So you, you give them something or, or it's either you give them something directly or you promise. It's like if, Promise to give them the thing. Yeah. And giving it to them directly is like a repo market thing. We're not really going to get into those right now, but this does. That's like, that's also a kind of shadow bank. But there's a problem, right? Which is what if the thing that you're paying, you're paying as collateral? Like, what if your house becomes worthless? And what if, what if, Molly.

[Angela Yee]

And it's completely uninsured and there's no way to fix it because I don't

[Mia Wong]

even have anything to get now, Molly. What if, and this is purely hypothetical, it could never happen in the real world, Molly. But what if somehow someone. Someone decided to use the same house as collateral for multiple different securities?

[Angela Yee]

Well, that could never go wrong.

[Mia Wong]

What if, Molly, they made a word for this. That is so complicated. I am not going to attempt to read it on the show. What if, Molly?

[Angela Yee]

What is it in German or something?

[Mia Wong]

No, it's like this. Just like this. It's like the legs of my head. It's like hyper, Hyper something bullshit. Like, I refuse to say it because it is just like a completely, like, finance ghoul bullshit term they made up.

[Angela Yee]

So, but the point of, the point of collateral is that you can use it to pay off the loan if you default on the loan. And so that literally won't work more than once, because once I eat the burger, Once I eat the burger, it's gone.

[Mia Wong]

Yep. And this is one of the things that happened in 2008.

[Angela Yee]

I can't prom. I can't promise 10 guys my burger.

[Mia Wong]

Now, Molly, here's the amazing thing here, right? Because the, but the advantage for these companies, right, is like, if you're the bank that has the mortgage, suddenly you can spin your mortgage off into, like, multiple securities that you can sell, right.

[Angela Yee]

It's worth 10 times more. And that's great for you.

[Serious Fun Ad Host]

Yes.

[Mia Wong]

And comma, comma, we, we haven't even. Again, I, I, I just, I just described a system where these people are promising the same house to most all people. This isn't even the extremely unfathomably reckless and greedy.

[Angela Yee]

No, it is.

[Mia Wong]

Oh, it Is, but it's not the worst of it.

[Angela Yee]

Oh, good.

[Mia Wong]

Okay. So do you remember that quote from when I was giving the first definition of shadow banking? Right. Like I gave this quote from the guy who invented the term where he called it, quote the whole Alphabet soup of leveraged up investment conduits, vehicles and structures.

[Angela Yee]

Right.

[Mia Wong]

So we've kind of talked about the conduits, vehicles and structures.

[Garrison Davis]

Right.

[Mia Wong]

Those are all of the shadow banks that like make the things.

[Garrison Davis]

Right.

[Angela Yee]

I love the conduits, vehicles and structures. Yeah, all the acronyms.

[Mia Wong]

But what does leveraged up mean? Oh, now, okay, in, in this case, it means that a bunch of these banks have taken out a shit ton of like risky high interest loans in order to buy more of these fucking mortgages because they think they can make more money off of it.

[Angela Yee]

So they took out, they took out loans to buy these unsecured securities.

[Mia Wong]

The regular ass banks were doing this. Yeah. They, they went into debt to buy more of these shitty mortgages, so they

[Angela Yee]

took out loans to buy what are essentially unsecured loans.

[Mia Wong]

Yep. Because I thought it would make them

[Angela Yee]

more money, but there's no money involved.

[Mia Wong]

Oh, oh,

[Angela Yee]

it is money.

[Mia Wong]

It is about to get so much worse. Right. So, okay, so sticking with leveraging for a second, right. You might have actually heard of something called a leveraged buyout.

[Angela Yee]

I have heard those words. And then I stopped listening.

[Mia Wong]

Yeah. So here's the thing. Leveraged buyouts are something that actually happens in the real world that does fuck you directly. Which is a whole bunch of companies that used to be like normalized companies, like died because venture capital firms, who by the way, are also shadow banks. Oh. Did this. Right. They came in, technically speaking, they did it through like risky bond purchases, but basically they did a bunch of high interest loans and then they go buy a company and then they like strip it for parts and then they try to raise the stock price of the company. Yeah. And then they strip for parts, sell everything and, and get out. Right. That's what a leveraged buyout is. These people are sort of are doing kind of a version of that, but like they're, they're taking on this debt in order to like buy fucking shitty underwater mortgages. Because they look like they're making so

[Angela Yee]

much money they're taking on real debt to buy hypothetical debt.

[Mia Wong]

It.

[Robert Evans]

Huh?

[Mia Wong]

Oh, it's about to get so much worse.

[Angela Yee]

That doesn't seem like a good idea.

[Mia Wong]

So I have to get so much worse. So that's what, like the leveraged part of that.

[Angela Yee]

I don't even know how you do that in burgers.

[Mia Wong]

I. I don't know. You're. You're. You're going into debt to, like, buy the promise of burgers in the future so you could sell those future burgers.

[Angela Yee]

Yeah, but burgers are real. The thing. We're not talking about a real thing at all.

[Mia Wong]

Well, technically. Technically speaking, somewhere at the bottom of this is mortgages. However, comma, we're about to get into a kind of asset where there isn't anything behind it. And this is where the really, really, truly unhinged shit starts. It hasn't yet, which is that these companies figured out a way to bet on whether these mortgages were going to fail or not.

[Angela Yee]

That's so tight, Mia. I fucking love that. I love it. Yes.

[Mia Wong]

Yep.

[Angela Yee]

Yeah.

[Mia Wong]

This, by the way, I can't emphasize enough how unhinged this is, is. The mechanism they're using to do this is called a credit default swap.

[Angela Yee]

Oh, I've heard that phrase.

[Mia Wong]

This was supposed to be how they did insurance. Their mechanism for doing insurance on all of these insane loans they were doing was originally like, okay, I'm going to. You're. I don't know. So you have a bank, right? The bank has given out a risky loan. So this bank goes to another bank.

[Angela Yee]

They shouldn't do that.

[Mia Wong]

And they say, hey, if this person actually pays a loan back, I will pay you money.

[Angela Yee]

Okay. So the other. So the other bank is, like, taking a gamble here.

[Mia Wong]

Yeah. So the other bank that's giving out the loan. Right. Gets money if the loan goes under. So in theory, they're sort of like insured against the risk. They call it like, hedging. They're like. So, like, like. So theoretically it's less bad for them because now even if the loan goes under, they still get money back from that other bank.

[Angela Yee]

So the other bank is just a bookie.

[Mia Wong]

Yeah. And the other bank is betting that they are going to get it. So then. And if the loan does get paid, then that bank makes money.

[Angela Yee]

And this is legal for everyone to do?

[Mia Wong]

Yep.

[Angela Yee]

This is real banking or shadow bank? This is real bank.

[Mia Wong]

No, this is technically.

[Robert Evans]

Actually.

[Mia Wong]

No, this. This is actually both. Both of you do this. Technically speaking, the instrument, like, like the actual, like, credit default swap or whatever is made by the shadow banks, but then they're brought by the regular banks.

[Angela Yee]

I'm starting to think that the bank searched the shadow banks and that all of this is just fake and bad.

[Mia Wong]

Like, here's the thing. Here's the thing about these systems, right? Is that like a lot of the original literature on it was considering them separate. But it's like, no, like the regular banks are making their own shadow banks do these things. They're all involved in these assets. They're also investing in the shadow banks, which is the problem we're having right now.

[Dana Al Kurd]

Right.

[Angela Yee]

It's like, it's the same guy, he just like turns his chair around at his desk and he's like, now I'm shadow bank Todd.

[Mia Wong]

Yep. Well, and sometimes it's that some, sometimes it legitimately is just other entities they work with.

[Angela Yee]

But yeah, but there's still, it's still the bank engaging. So it's like, oh, these are non banking practices. Yeah, but the bank is doing it.

[Mia Wong]

Well, but here's the thing, the important part for that though is that like the non bank also can do this with other non banks.

[Angela Yee]

Even better even.

[Mia Wong]

Yeah, right.

[Angela Yee]

I just feel like, I just feel like once we're, once we're talking about shadow banking, like the real bank should not be in the room, like, go home, Wells Fargo, you don't belong here. You're drunk.

[Mia Wong]

No, but like they're funding all of this, right?

[Angela Yee]

Like if the real bank is involved with the shadow banking, that means like, I can't opt out of being involved in this because they have my money.

[Mia Wong]

Yeah, you know, we were talking about that at the top. That like, so some of these like fanc banks had to like stop their withdrawals. Oh, yeah. One of those, by the way, was J.P. morgan.

[Angela Yee]

But that's a real bank.

[Mia Wong]

Yep. They're involved in the shadow banking shit. So they are exposed to when they're like fucking $700 million loan to like a fucking. Actually, which one was the $700 million? I think a $700 million loan that went under was the one that was to a subprime auto loan company. He.

[Angela Yee]

That's a bad investment.

[Mia Wong]

It's like, oh yeah, it's so evil. It's so evil.

[Angela Yee]

Why am I trusting all of my money that I have in this world? I'm letting this guy hold on to it, who's obviously not good with fucking money.

[Mia Wong]

Well, because the FDIC is insuring it. Why are you in charge of it?

[Angela Yee]

Why are you in charge of having the money? You obviously don't make great financial decisions because you invested $700 million in subprime auto loans.

[Mia Wong]

So Molly, this is the, this is the point where I. We need to bring debt the first 5,000 years back into and emphasize the extent to which the financial class has always been Deeply connected to the military. The military and why it's always been deeply connected to war financing.

[Angela Yee]

I'm starting to realize that this is all very bad.

[Mia Wong]

It's very bad. It's all very bad. And this is, this is to some extent why, right. Like part. Part of what right wing conspiracies about the financial system is, is that like, these people are like, like the right wingers. Like, these people are. There's. There's like a baseline level of anti Semitism, like in the U.S. right. Because it is a. Is a Christian society that is just like, what. What fucking happens there. And these people are like, okay, we can channel all of the anger at like, oh, my God, my fucking house got stolen by the bank. Because. Because they were betting on the mortgage to fail.

[Angela Yee]

And I still don't understand why that's legal.

[Mia Wong]

Yeah, well, all these right wing conspiracies do is they. They look at that shit and they go, oh, well, it was the Jews.

[Public Investing Ad Host]

And it's like.

[Mia Wong]

But no, like, fuck off. Like, these are all.

[Angela Yee]

No, it was the bank.

[Mia Wong]

Yeah. And the other thing, and this is actually a really important thing that's not well understood here is that like, like the actual people who run these fucking banks, the people who work at them are all fucking white Christian dipshits. This is like a real. A really like, persistent issue that everyone fucking has, which is that like, one of. One of the great successes of anti Semitism was like, creating the image of the banker as a Jewish person. And no, they're not the bank. Like, I fucking went to school with these people. They're all a bunch of fucking white frat bros. They're fucking white Christian frat bros. Oh, right. University of Chicago.

[Angela Yee]

You have a degree in economics from

[Garrison Davis]

the University of Chicago?

[Mia Wong]

Not from economics. I have an anthropology degree, thank you very much. I took a laws are real degree, not a fucking fake degree. Like the stupid econ bullshit.

[Angela Yee]

I just say that's actually so evil to study economics in Chicago. You probably met some of the most evil people on this.

[Mia Wong]

I was just like in a dorm with them. Okay, so.

[Angela Yee]

But you saw them.

[Mia Wong]

I know all these people. Yeah. And like, it is not. It is not a bunch of Jewish people. It's a. It's a bunch of Christian frat bros. Like, that's like the thing that's actually going on. There's actually a whole one day I will write the behind the Bastards episode about leverage buyouts and about how. How like, there was like a Jewish guy who kind of like, like did a lot of the inventing stuff. But him breaking into the banking thing was like a whole thing because there was so much anti Semitism because all of the banking sector was run by all of the like weird dip, like CIA, like, like wasp.

[Angela Yee]

I mean the Mormons have a huge hedge fund.

[Mia Wong]

Yep, yep, yep, yep, yep.

[Angela Yee]

Yeah. So like the. What is it? I read an article about it. The hedge fund that the Mormons operate like, like they have their like best and brightest finance bros. Like you know, Mormons do their two year mission. If you're really good at finance your mission, you don't have to go to South America and like tell people about the Book of Mormon. You can work at the hedge fund as your mission.

[Mia Wong]

It's, it's a nightmare.

[Angela Yee]

I'm doing hedge funds for God.

[Mia Wong]

Yep. That's a stats of shadow bank by the way. Yep. It's great. So, okay, okay, coming back to this again, right, so we're talking about like what, what causes 2008 and how do these shadow banks like do this? And the answer is that they've turned all of these mortgages into these like fake securities. They can, they can trade, right? They package them all together and they find out something really crucial, which is that if they throw a bunch of loans that they obviously know are going to fail together and send them to a regulatory agency and by the way, all of these like bonds that they're issuing have like grades based on supposedly like how safe they are. And they figure out.

[Angela Yee]

I know about that.

[Mia Wong]

Yeah. And they figure out that they can send a bunch of really shitty bonds. But if they package enough shitty bonds together, they could send them to the regulators and the regulators would have, would evaluate some of them as being good. And then you could sell the good ones to your pension fund because they thought it was a good bond and it made money.

[Angela Yee]

That's just lying.

[Mia Wong]

And then, and then. Yes and yes. And then, and then behind the scenes, right? All of these fucking companies, all these shadow banks, all the regular banks, they're all doing these, they're all doing these credit default swaps, right? So they're all betting on which ones of these are going to fail.

[Angela Yee]

I'm putting all of these boys in timeout. Like I'm going to put them in the bottom of a pit.

[Mia Wong]

So evil. And they, they start, they start doing these, making these like even more complicated instruments, right? Where now what they're, what they're selling to you isn't just the package of mortgages. They're also selling you the credit default swaps with the loan. So theoretically, what's happening is, like, they've created an instrument that regardless of what happens to the loan, you make money.

[Angela Yee]

That's not how anything works.

[Mia Wong]

No, it's bullshit. It's so obviously bullshit.

[Angela Yee]

I made up this fake thing where no matter what happens, I get rich. That's cool. I would love to do that.

[Mia Wong]

Yeah. And nobody was like, wait. Well, I mean, a couple. Some people were, but like. Like, people didn't just be like, wait, hold on. No. Obviously, you can't make an asset that makes money regardless of whether the thing fails or not.

[Angela Yee]

I invented a money machine.

[Mia Wong]

Like, that's fucking ridiculous. And then eventually, yeah, it was like, no, they ran out of fucking mortgages. You know, one of the ways that the blame for this was deflected onto regular people was that they blamed the banks or, like, they blamed regular people for, like, not being able to pay the mortgages. But the thing is, by the time you get to the point where you're, like, packaging all the. You're betting on the mortgages, right? If you're a bank, even if you're the regular bank, you don't make money off of, like, someone paying their mortgage back. You make money on betting on the mortgages. So you're incentivized to just keep giving out loans. You know, won't happen, because you can sell those loans off of some other dipshit, and then you. And then you can bet on those loans that they're going to fail, and you can make money, and that's how you make your money, because you're.

[Angela Yee]

You're not a bank anymore. You're a bookie who's cheating.

[Mia Wong]

Yep.

[Angela Yee]

I don't think that's good, Mia.

[Mia Wong]

No. This was the entire fucking financial system. And we just let these people stay

[Angela Yee]

in power, and I'm just supposed to just continue living my life like this?

[Mia Wong]

I don't know. Looking at this and then. And then learning that all of these people got fucking bailed out by the government and none of them went to prison.

[Angela Yee]

And do they know they're cheating liars who. Who are faking and making it up? Or are they, like, so high on their own supply, they're like. They're like, no, bro. No, bro. This is totally gonna work. It's totally gonna work.

[Mia Wong]

Well, here's the thing. Some of them know and some of them don't, because some of them believe

[Angela Yee]

that this is cool.

[Dana Al Kurd]

Yeah.

[Mia Wong]

Like, some of them legitimately thought that this was just going to work forever.

[Angela Yee]

Like, do they believe they're Negative money backed by other fake money backed by the idea of promises of fake money. They think that's money.

[Mia Wong]

Yeah. Yeah. I thought it was gonna work.

[Angela Yee]

It's not.

[Mia Wong]

It's not. No.

[Angela Yee]

Nope.

[Mia Wong]

And it turned out to not be any fucking money. And it blew up again. Like entire countries, countries were buying these, they went bankrupt.

[Angela Yee]

So like this is less real than a bored ape nft. And that's really saying something.

[Mia Wong]

It's, it's astonishing because at least the,

[Angela Yee]

at least I can look, at least I can look at the picture of the monkey. I can't look at this.

[Mia Wong]

No. Like it, like you can't look at the bet you're making on whether, on whether monkey go down.

[Angela Yee]

Like it's like, like all, all my apes gone.

[Mia Wong]

Yeah.

[Dana Al Kurd]

And.

[Mia Wong]

But it's depressing because the entire world is just this now it's the shit the banks were doing where you're betting on whether the mortgage going to fail but now it's, you're betting on whether like what day we're going to drop a bomb on Iran.

[Angela Yee]

Like nothing is real and everything is gambling.

[Mia Wong]

Yeah. Yeah. And this is, you know what, what I would call a sort of terminal crisis stage of capitalism where like, because

[Angela Yee]

everything is so divorced from any material reality, from any good or service, like

[Mia Wong]

there is a limit to which you can run an entire economy that is purely based on gambling. Like they're just. There's a limit and we're going to hit it really soon.

[Angela Yee]

That's got, that's gonna break, right?

[Mia Wong]

Yeah, yeah, it's going to break. It's gonna break spectacularly. However, comma, I do have good news for you.

[Angela Yee]

No, you don't.

[Mia Wong]

I do. I have good news. You now actually understand what non bank financial intermediation is.

[Angela Yee]

No, I don't.

[Mia Wong]

I'm going to walk you through it. You actually do. So I'm going to quote the IMF's definition of non bank financial intermediation. All entities outside the regulated banking system that perform the core banking functions. Credit intermediation, that is taking money from savers and lending it to borrowers. The four key aspects of intermediation are maturity, transformation. We know this one.

[Angela Yee]

Right.

[Mia Wong]

This is, this is what the bank does.

[Angela Yee]

The loan gets older.

[Mia Wong]

Yeah, yeah.

[Angela Yee]

And it gets paid back over time.

[Mia Wong]

Yeah. Well it's. You turn your short term thing into a long term investment or you do the opposite.

[Angela Yee]

Opposite's not good.

[Mia Wong]

They're both kind of a disaster. But like. Yeah, yeah. The opposite is kind of how we got into this mess. There's Liquidity transformation, which we know this too.

[Angela Yee]

It's turned turning money into a thing that's not money.

[Mia Wong]

Yeah. Or turning not money into a thing you can buy burger with. With. Okay, yeah, we got this leverage. We also know this, which is you go into a bunch of debt to buy something else. And then there's credit risk transfer, which we know that one too. It's the betting market where you're supposedly swapping the risk by. But both of you two are now betting on whether this thing is going to fail.

[Angela Yee]

So it sounds like even, just like regular banking is kind of just gambling now.

[Mia Wong]

Now. Yep, yep, yep. Well, and it's fun too. So this is the thing that used to be talked about more and isn't now. But like, most of like, like the world's corporations are also basically this now. Like, and this has been a thing for a while. But it's like the auto manufacturers don't make their money off of cars. I mean, they sort of. Do they make some money off cars or like most of what they make their money off of is like the Ford Finance Company, which is like the auto loans thing.

[Angela Yee]

Oh.

[Mia Wong]

And then the, the auto loans thing trades a bunch of like, does all of this other financial bullshit to make money.

[Angela Yee]

So like, I don't think that's a good idea.

[Mia Wong]

That's. That's what capitalism is.

[Angela Yee]

So everything, everything is fully reliant on

[Mia Wong]

this, like, stupid gambling bullshit.

[Angela Yee]

Emperors wearing no clothes, economy.

[Mia Wong]

Yep.

[Angela Yee]

And if anybody, if anybody points out that none of this is connected to a material reality, everything falls apart.

[Mia Wong]

Well, here's the thing. The thing that stops everything from falling apart is that the one thing you can do with your money is turn it into guns.

[Angela Yee]

Now I'm listening.

[Mia Wong]

And that's what stops it falling apart. Right?

[Angela Yee]

Because now I'm listening.

[Mia Wong]

And this is also a sort of graverism. But it's like behind every, like, bank is a man with a gun. Because the reason that this money is even sort of real is that the bank can, like, you. Like, the police will come get you. Right. Like men with guns will appear and like, coerce you to pay shit. Right.

[Angela Yee]

But what if. What if instead of burger, we bought

[Mia Wong]

gun, you know, like, this is what is broadly referred to as the social revolution. It is broadly considered a negative by the financial sector. It is broadly considered a positive by everyone the fuck else. That's not true. It's not considered a positive by like, I guess the people who own regular businesses. And this is like this shit that like, you know, it was kind of less unhinged back then. But, like, if you go read the people who were, like, doing this shit in, like, the early 1900s, if you read their writing, it's all them being like, oh, yeah, no, by the way, like, a bunch of banks just, like, turned the entire Ottoman Empire into, like, a debt peon. And now their entire economy is just dedicated to paying off these fucking loans. And this is, like, hideously fucking evil. Like, they're. They're all complaining about the same shit.

[Angela Yee]

And the important lesson we learned from that. The important lesson we learned from that was to do it more. More.

[Mia Wong]

Oh, yeah, yeah, yeah.

[Angela Yee]

To invent increasingly more complicated ways of doing that.

[Mia Wong]

Yep. And like, this. This is. This is why the term Third world is a slur. Because instead of being a political movement, because those. The countries in the political movement that was called the Third World movement, all of their economies got annihilated because they had these, like, loans whose interest rate could change. And the US Jacked up all the interest rates, and so suddenly their loans were like. Like, the amount you had to, like, pay on the loans, it went from, like, like 20% or something to like, 50 or 100 or some shit. And, you know, and like. And these countries have never recovered. Like, Nigeria has never really economically recovered from the shit that happened to them. This. This is why a whole bunch of Latin America is like this too. Like, why there's so much sort of, like, writing systemic poverty is that their economies were entirely transformed into machines to, like, pay back these fucking debts taken out by these dictators. This is the whole fucking economy now. And. And, you know, there's other shadow banks that do other kind of completely unhinged shit, right? And I've been focusing this week on, like, specifically the kind that blew up the economy in 2008. But there's another kind that's, like, blowing up the economy right now, which is called private credit, which is. I mentioned this briefly earlier, but private credit is when these, like, unregulated companies that are not banks give out unregulated loans with unknown terms to other companies, and then those loans go to shit. And there's a whole bunch of ways that can blow up. Including, by the way, these companies are funding a bunch of the AI bubble. Oh.

[Angela Yee]

And that's a great, great investment. It's great, you know, because much. Much like a mortgage, there's a real physical thing, like a house involved. Right. It's not just vibes.

[Mia Wong]

Oh, yeah. Oh, Molly. Molly. They. Those. I'm gonna talk about this a bit. I might have Ed Detron on for this part of it too just because like Ed does this all the time but like those out there selling securities that are backed by graphics cards like at least the more I can't believe I'm saying this but like at least the mortgage backed securities like there was a house you could steal to get your money back. Graphics cards.

[Angela Yee]

All my apes are gone.

[Mia Wong]

Graphics gone.

[Angela Yee]

All my apes are gone.

[Mia Wong]

Like there's other ones that I like. It's it's so bad. It's just oh but that that's for another time because it is late as and we are out of here. Molly thank you. Thank you for sitting and enduring an hour of of you knowing what a shadow bank is now I almost know

[Angela Yee]

what a bank is. I'm still working on the rest of it, but I think I'm getting closer.

[Mia Wong]

I I believe in you. I I I I think we've made real progress today. I I don't know. Now, now, now you can kind of understand what's going on. When this sector explodes again in like

[Angela Yee]

two weeks, you'll have to explain it to me again.

[Mia Wong]

Then I.

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[Dana Al Kurd]

Oh God, I hate these Zoom.

[Mia Wong]

If you're listening to this and leaking

[Robert Evans]

my keep all of this in. You keep all of this in. Keep it all in.

[Dana Al Kurd]

Beautiful settings.

[Robert Evans]

Beautiful stuff.

[Mia Wong]

Insufferable. It's insufferable.

[Robert Evans]

It could happen here. Executive dysfunction disorder. I forget. Disorder disorder.

[Garrison Davis]

The weekly newscast we do that covers what's happening in the White House, the crumbling world of what it means for

[Robert Evans]

you, and Sophie's simmering rage at Zoom. Constantly moving the recording button.

[Dana Al Kurd]

Not even just Zoom. It's all the.

[Mia Wong]

It's insufferable.

[Dana Al Kurd]

All these goddamn platforms. But they're stupid AI features and moving of my settings. I sound like the oldest person the world.

[Garrison Davis]

But that's moving the recording.

[Mia Wong]

This sucks.

[Angela Yee]

Stop it.

[Mia Wong]

It's so annoying. Holy.

[Robert Evans]

Everybody's pretty pissed about AI these days.

[Dana Al Kurd]

I mean, it's insufferably stupid. But stop it. Stop it. And we have to use Microsoft for work. And every time I try to copy something, it asks if I want to use copilot. No, I never want to use copilot Off.

[Garrison Davis]

Sophie, you're really not maximizing your productivity, okay?

[Dana Al Kurd]

This week we're covering what that means now and.

[Mia Wong]

No, don't do that to me. Clavicular as.

[Dana Al Kurd]

Stop it. Stop it.

[Mia Wong]

Okay, I'm going away now to your jobs.

[Robert Evans]

What are our jobs, really?

[Garrison Davis]

You're not going to join in?

[Mia Wong]

Oh, I'm here. I'm always here.

[Garrison Davis]

That's Sophie Lichterman. Also Mia Wong. Robert Evans. I'm Garrison Davis.

[Robert Evans]

That's right.

[Mia Wong]

Right.

[Garrison Davis]

This episode recovering the week of March 18 to March 25. Speaking of AI, OpenAI has announced they are shutting down their AI generated video app, Sora, and as a result, the Disney deal has fell through. Disney's no longer going through with the $1 billion investment and character licensing deal with OpenAI.

[Robert Evans]

Oh, no.

[Garrison Davis]

According to the Hollywood Reporter. I know our audience is full of a lot of big Sora heads, and I'm sure this is some tough news.

[Robert Evans]

The Sora community is taking hits.

[Garrison Davis]

So, yeah, it's okay.

[Mia Wong]

You can still play Sora in Smash Ultimate. You can recover. I believe in you all.

[Robert Evans]

There's a video game character named Sora too, huh?

[Mia Wong]

Yes, the Keyblade. The Keyblade will still be there.

[Robert Evans]

I didn't. I didn't get into those games, actually.

[Mia Wong]

Hilariously, also.

[Garrison Davis]

Also a Disney franchise, also licensed through Disney.

[Robert Evans]

Yeah, Great, great stuff. Well, I found this very funny in part because, like, when Sora came out, there was this, like, burst of enthusiasm for, like, soon we'll just be generating our own movies and tv. You won't need Hollywood. But then it turned out that you can't actually, like, do, like, even if you want to make stuff with Sora, even if you wanted to include, like, clips of it to, like, help augment other films you were making. And there were a couple of filmmakers who tried to do this, even some in critical ways where they were like, oh, well, you know, I can use, like, pieces of Sora generated video to like, illustrate this point. I went to about AI. You couldn't actually use, like, Sora footage in anything that you wanted to, like, sell to Netflix or Amazon or, like, whoever it put in a theater. Because, like, the terms of use basically did not allow it because of how much risk you were at of getting sued for, you know, utilizing other people's shit content other people made. OpenAI was not willing to indemnify the users. Adobe has a similar, like, slop AI video generation machine that does indemnify like users of the content they make. And that is still going.

[Garrison Davis]

Yeah.

[Robert Evans]

So I think that was kind of like one of the key issues here is just that like you can't actually do anything with your Sora clips.

[Garrison Davis]

Yeah. I mean this doesn't mean it's going to lead to the end of AI generated video on social media.

[Robert Evans]

Lord, no, unfortunately no.

[Garrison Davis]

This is a movement that OpenAI is making towards business to business sales and away from this direct to consumer application. It's still an interesting move. The fact that Disney's breaking off the deal also in interesting. Its exact ramifications for OpenAI and like AI generated video in the long run still. Still unclear.

[Mia Wong]

Yeah. I also just want to mention that like obviously the other reason they're doing this is that this stuff is hideously expensive.

[Garrison Davis]

Like, yeah, a lot of money to, to generate this stuff.

[Mia Wong]

Unfathomable amounts of money are just being lit on fire. Listen, listen to everything ever written by our friend and colleague Ed Zitron if you want to know how much money is being lit on fire by this. But yeah.

[Robert Evans]

Yep.

[Garrison Davis]

A few other small news stories. The U.S. army has raised its maximum enlistment age to 42. And the Pentagon is planning to maintain National Guard presence in Washington D.C. through the entirety of Trump's second term. In a special election Tuesday night, the Dems flipped Trump's own state House district in Florida, Palm Beach County County. Trump won this district by 11 points in the 2024 election as Tuesday Democrat Emily Gregory won by 2 points, nearly a 14 point swing.

[Mia Wong]

Are we going to point out how he voted in that election?

[Garrison Davis]

Vote by mail, but it's okay because the Florida system is safe and secure. Yeah.

[Mia Wong]

Also I want to point out this is more vindication of the MIA of the Mia Blue Tsunami theory that this is going to be a 2008 style blowout. If they're losing fucking mar. A lot, go for two points.

[Robert Evans]

I just, yeah, I try not to predict how the fucking bigger elections are going to go anymore. Just because, yeah, it's, it's so hard, but it's not. You wouldn't call it a good sign for the Republicans.

[Garrison Davis]

This is not a good sign for Republicans. Even though only like 33,000 people voted in this election. It is still interesting data.

[Robert Evans]

Yeah. You would think again that he would, he would have more of a lock on his backyard. But also why would he have thought about it? Like I go back and forth and people are like, well, if they were going to steal an election, wouldn't they have done the one in Mar a Lago? Probably not.

[Angela Yee]

Nah.

[Robert Evans]

Probably wouldn't have thought to do it. Probably would have figured they don't need to.

[Garrison Davis]

The FBI is investigating former director of the National Counterterrorism Center, Joe Kent for allegedly leaking classified information and this investigation predates his resignation last week. In an interview with Tucker Carlson last week, Kent implied Israel may have been involved in the killing of Charlie Carter Kirk and that the FBI stopped Kent's investigation into this quote, unquote linkage.

[Robert Evans]

Oh my God. Yeah, man. Israel killed Charlie Kirk. That's why there haven't been any other people on the right who have complained about Trump's aiding and abetting Israeli war crimes. Like no, no other conservatives have been pissed about the invasion of Iran. Just Charlie Kirk.

[Mia Wong]

He was the lone anti Semite.

[Robert Evans]

The only.

[Mia Wong]

He was the only one.

[Garrison Davis]

Charlie Kirk was the Golden Doe home single handedly stomping Trump. Yeah, no, yeah.

[Robert Evans]

It's just a silly idea.

[Mia Wong]

God.

[Garrison Davis]

For our first big story, let's talk about airports. Everyone's favorite way to spend five to who knows, however impossible. How many hours. Yeah, an impossible amount.

[Mia Wong]

Oh God.

[Robert Evans]

No way to know.

[Garrison Davis]

DHS has been shut down for over a month now and more than 400 TS agents have come quit after being left without pay while ICE agents continued to receive paychecks through last year's big beautiful bill. This past weekend, Trump announced ICE would be deployed to airports to assist TSA during the shutdown. By Monday morning, ICE agents had been sent to airports in Atlanta, Chicago, Cleveland, Houston, Fort Myers, New Orleans, Philadelphia, Phoenix, Pittsburgh, San Juan, Newark and the two New York airports. Interestingly, come Monday, when ICE was spotted, they were not wearing masks, which seems to go against agency claims that masks are for protecting agents against so called doxing. That morning Trump truthed, quote, I'm a big proponent of ICE wearing masks as they search for and are forced to deal with hardened criminals. I would greatly appreciate, however, no masks in all caps when helping our country out of the Democrat, caused mess at the airports, etc. Thank you. Later on Monday, Trump was asked whose idea it was to send ICE to airports and he had this fascinating response.

[Mia Wong]

That was mine. That was like the paperclip. You know the story of the paperclip. 182 years ago, a man discovered the paperclip. It was so sad, simple, and everybody that looked at it say, why didn't I think of that? ICE was my idea. I called. First person I called was Tom Holman. I said, what do you think? He said, I think it's Great. Then I saw today there was some masks on. I didn't think the masks were appropriate. I put out a statement and I asked them would it be possible to take off the mask because they should wear a mask when they're dealing with the murderers. And the thugs led into a.

[Garrison Davis]

Are guys discovered the paperclip.

[Robert Evans]

Discovered the paperclip.

[Garrison Davis]

Every now and then you get a

[Robert Evans]

little hint about his media diet and it's just fascinating.

[Garrison Davis]

Discover the paper. Paperclip is one of the most beautiful things I've ever heard. It's, it's insane.

[Robert Evans]

Somebody told him a little story about like, well, you know, the, the person who invented the paperclip and Trump just kind of ran with it. That's got to be it, right?

[Garrison Davis]

Yeah, it's, it's like, it's like the paperclip exists as like, as like a platonic form. Like, like existing in the existing as like as like a piece of truth.

[Robert Evans]

Someone chiseled it out of a pie. Granite, the first paper Cliff. And was like, yes, I've done it.

[Mia Wong]

It's like 40k where like the theory is that all technology has already been invented. So if you invent a technology, you're discovering it.

[Public Investing Ad Host]

Yes.

[Robert Evans]

The dark age of technology gave us the paper clip and it is actually heresy to invent a new kind of paperclip or other way to attach papers together.

[Garrison Davis]

Now in less funny news, also on Monday, Trump confirmed that ICE would be arresting people at airport reports.

[Mia Wong]

We see ICE arresting illegal migrants. Yeah, yeah, that's, that's why the Democrats are going crazy because they've allowed by what they did and hold up. We put ice, who are a very high level, I mean they really are a high level group of people and they love it because they're able to now arrest illegals as they come into the country. That's, that's very fertile territory story. But that's not why they're there. They're, they're really there to help.

[Garrison Davis]

Uh huh.

[Robert Evans]

There to help.

[Garrison Davis]

Most people who are undocumented do not illegally enter the country through airports.

[Robert Evans]

That would be silly.

[Garrison Davis]

They overstay a visa. That's how they lose their legal presence. On Fox News, Tom Homan claimed that ICE was helping to reduce long lines at airports as well as arrest criminals.

[Mia Wong]

And we're filling the holes. The wait lines already dropped. Plus we're doing a security function at the airports. We're going to arrest criminals. Going to his airport, we're going to look for human trafficking, sex trafficking, money, you know, money smuggling.

[Garrison Davis]

Money smuggling?

[Robert Evans]

Yeah. They're they're just going to steal cash off of people at the airport?

[Mia Wong]

Yeah, yeah.

[Robert Evans]

Now, TSA has done that for a while, off and on, so this isn't entirely new, but they're just going to take money from people.

[Garrison Davis]

By Tuesday evening, lines at atl, the airport in Atlanta, the most busy airport in the world, has the most amount of travel to and from. By Tuesday evening, lines were back down. But by Wednesday morning, a friend of mine took three hours to get through tsa.

[Robert Evans]

God.

[Garrison Davis]

So what exactly is ICE doing? Mostly standing behind TSA at security checkpoints, Standing behind people still doing. Doing the regular TSA work, occasionally directing pedestrian traffic and maybe at most yelling at people to empty their pockets.

[Mia Wong]

Hey, they're keeping the cookie clicker economy going. The mobile app economy is benefiting enormously from all these people standing around their phones.

[Garrison Davis]

ICE agents cannot actually do the job of TSA, since they do not have the training nor the certification required to do so.

[Robert Evans]

Nope.

[Garrison Davis]

So ICE is largely just acting as auxiliary staff and security for the airport. But regular airport staff aren't suffering from the financial strain of the shutdown because they're still getting paid. Aaron Barker, the president of the TSA Union Local 554, which covers airports in Georgia like ATL, denied that ICE contributed to short lines on Tuesday compared to the weekend, noting that Tuesday is a non peak travel day.

[Robert Evans]

Yeah, of course it's Tuesday.

[Garrison Davis]

Quote, it has nothing to do with ICE presence being there. The ICE officers in Atlanta are not doing any screening functions. They are literally standing behind the officers while they're checking documents and screening passengers or walking the queue line that cascades through the airport, unquote, New York and New Jersey TSA Union President Heidrick Thomas said during a press conference, quote, you want to bring a tactical force into an environment where you're required to have customer service and skill set, a mindset where you know what you're doing, how to identify something that might be suspicious. They don't have that training, unquote. No.

[Robert Evans]

And the TSA doesn't really have that training. Let's be clear.

[Garrison Davis]

No, no, TSA does not.

[Robert Evans]

Actually doesn't know what they're doing at all. There was never any chance of this helping anything. This is only going to be more of a pain in the ass for people at airports, which already are unpleasant to be at now.

[Garrison Davis]

On Monday, there was viral video of plainclothes agents wrestling a woman into handcuffed cuffs at the San Francisco airport. This incident actually took place Sunday night. Angelina Lopez Jimenez and her nine year old daughter were supposed to fly to Miami to visit a relative. Instead, she was detained by ICE agents and sent to an airport holding room, according to the New York Times. On Friday, TSA agents flagged her name on an upcoming passenger list and informed ICE that Lopez Lopez Jimenez was scheduled to fly from Miami on Sunday. Lopez Jimenez and her daughter were detained by Border patrol back in 2018, but were released with a notice to attend court for removal proceedings. Eventually, she stopped showing up for appointments and her deportation was ordered in 2019. This weekend, at around 9:30pm Sunday night, two plainclothes agents approached Lopez Jaime Jimenez in Terminal 3 in San Francisco and she then handed over her two Guatemalan passports, one for her and other for her daughter. While being led to the international terminal, she tried to run away, prompting the agents to tackle her to the ground. On Tuesday, her and her daughter were sent to Guatemala. The New York Times says that this operation was unrelated to the ICE airport deployment ordered by Trump. Also on Sunday night, Republican Senate Majority Leader John Thune told Trump that the Senate had reached a deal to fund TSA and the rest of DHS except for ice, which would be handled later in a reconciliation bill. But Trump instructed Thune to kill the deal. Later that night. Trump truth I don't think that we should make any deal with crazy country destroying radical left Democrats unless and until until they vote with Republicans to pass the Save America act, that is the Voting Restriction act, which includes voter ID with picture proof of citizenship to vote, heavily restricting mail in voting, requiring paper ballots as well as quote no men in women's sports and no transgender mutilation of our precious children, unquote. Senator Ted Cruz and John Kennedy are continuing to work on the this plan that Thune told Trump about to reopen DHS sans ice. On Tuesday morning, Kennedy said on Fox News that TH told him the President is reconsidering the option and quote unquote may be on board. Later that day, Trump was asked if he supports what appears to be the, quote unquote emerging agreement coming out of the Senate to reopen dhs. Trump replied, quote, I'm going to look at it. We're going to take a good hard look at it. I want to support Republicans and sometimes it's awfully hard to get votes when you have Democrats that don't want to have voter id, unquote. Trump then went on to discuss the SAVE act and how he added no men in women's sports quote unquote because it's nearly a quote unquote 99 to 1 issue. It's time for our first break, and we will return with more news.

[Robert Evans]

We're back. So let's talk about the war that's been going on for like, a month at this point in time. You know, as we're kind of sitting here right now, we've all seen gas prices leap up substantially in California. There's some areas where you're paying like 7.50 a gallon.

[Mia Wong]

Good lord.

[Robert Evans]

It's gone up by about a dollar. Where I live, it looks fairly credible. There was a lot of fear that, like, kind of the worst case scenario would be that oil gets anywhere near like, $200 a gallon or $200 a barrel, not a gallon. Sorry, that would be.

[Mia Wong]

That'd be real bad.

[Steven Monticelli]

Bad.

[Robert Evans]

But what we're looking at right now, there's credible reason to expect that, like, this stuff won't peak any lower than about 175 bucks a barrel, which is pretty catastrophic for the US economy and the global economy as a whole.

[Mia Wong]

Nightmare.

[Robert Evans]

It's bad. And Trump has been, I think, increasingly making it clear that he is looking for an off ramp. There's a lot of reporting from inside the administration that suggests they did not think things would still be going on this long, that they thought that after the that fact, first rank of Iranian leaders were kind of wiped out. The guys behind them would be willing to play ball with the administration in exchange for staying in power, which is more or less the offer that we gave Delsey Rodriguez in Venezuela and the Venezuelan regime, the people who kind of were behind Maduro were willing to take. But Iran is a very different country, and they're in a very different situation, and they have a very different military, and they have a very different physical, strategic situation than Venezuela does, than any other country that the United States has attempted to use these kind of like, violent bullying tactics on. And so far, Iran does not seem to be interested in coming to the table. Trump has made a couple of statements about how we're working on getting out of this. You know, we've presented an option to the Iranian government that would basically allow them to get rid of all of the sanctions if they just promise to stop enriching uranium and to hand over everything that they do have and to never try to get a nuke. I think it's pretty clear they're not willing to make that promise anymore. I think they were. I mean, they certainly were earlier, five years ago, but at the time, which you've repeatedly killed all of the people running the country, you've kind of only Made it clear that they need nukes. And that's the waiting game that we find ourselves kind of currently locked in here is Iran has shut down the Strait of Hormuz. They've at least, last I checked, I think, hit 17 ships heading through the strait or in the strait, and that's caused the vast majority of traffic that would be crossing through to hold back. And so you've got this massive backlog of craft just kind of waiting because they can't go through. Trump previously had made some big statements about, well, the U.S. navy will escort them through and we'll get like a global coalition of naval forces to escort them through. That hasn't come to pass. For one thing, very few governments with navies seem interested in sending sizable naval forces to the Strait of Hormuz to do this. And for the other thing, that's not an easy thing to do. It may seem like it, because it would be a real crazy thing to all of us listening if a single US Naval vessel were destroyed in combat. Right. Like, the last time anything like that happened was the USS Cole, which was hit while it was in dock by a suicide bomb. The idea of, like a destroyer getting stuck, sunk would be deeply upsetting to the American people, I think. Probably. And, like, deeply, it would be a huge problem for, let alone if an aircraft carrier were to take serious damage. Yeah, these would be serious problems for the administration. The problem is that you can't escort fuel tankers through the Strait of Hormuz without exposing them and the ships escorting them to direct fire. Geographic. You know, you've probably heard a lot about Kharg island recently, which is this island that, as we talked about in a previous episode, a lot of Iran's oil infrastructure is on, because the coast of Iran is not mostly not deep water, and you need very deep water for the boats that transport huge amounts of crude oil. These are massive vessels. These are some of the largest machines human beings have ever built of any kind.

[Mia Wong]

Yeah. These are the size of skyscrapers.

[Robert Evans]

Like, these are skyscrapers on their side. They are enormous boats. It is when people were suggesting, like, what if we just drive the oil. You have no idea how big these fucking boats are and how much oil it takes to keep the world running.

[Mia Wong]

Yeah.

[Robert Evans]

So you have a very narrow waterway through most of this. So the. It's not like it is in, you know, other waterways or in the broader ocean where people have a lot of routes they can take. Big ships can only take one very well known path through the strait.

[Garrison Davis]

Right.

[Robert Evans]

And it's really easy to mine that path.

[Mia Wong]

Path.

[Robert Evans]

If you've got naval vessels escorting those big boats, then you've got US Naval vessels that are exposing themselves to direct fire from the mountains and hills in a way that is impossible to stop them from getting shot at, from having drones flung at them. And we have a pretty good understanding of what we can stop and what we can't stop. And based on everything that's been happening, my suspicion is that Trump has been getting told by his officers, we can't guarantee we won't lose sailors and we won't lose ship ships if we do this, because you are sending them through the chokiest of choke points. And Iran has spent 50 years preparing to fling at naval vessels escorting oil tankers through the Strait of Hormuz. There's no guarantee it's not going to be a bloodbath. So that's why the administration is looking at stuff like, well, what should be we sending in? Marines. And we have Marines that are moving into the area. There's been a lot of talk about having them seize islands in the Strike Strait, potentially even Kharg Island. The problem with that is obviously Iran has to deal with the bottleneck of we need this big island with its deep harbors, otherwise we can't get our oil out. But if the US Takes that island, it's in the middle of a bunch of shit Iran controls and they can fling explosives at the forces who take that island all fucking day long. It is a very bad position to be in if you're the Marines. I don't care how well trained you are, I don't care how much support you have have. That is a bad position to be in. And any military leader who has been under fire is trying very hard right now to let Trump know this will not be a low casualty endeavor and it will not be an easy endeavor. And you will not wind up just controlling this island and being able to dictate things to Iran. You will wind up having potentially thousands of your boys held captive by Iranian forces that surround them and fling explosives at them all day long. It's a bad position to be in.

[Mia Wong]

Yeah. And this, and this is, I think part of, like the issue with, with the Trump administration's policy here is that like Trump himself and the people around him just seem to have been treating the Iranian army as not a real army.

[Robert Evans]

Is.

[Mia Wong]

And it is. No, this is, this is an actual,

[Robert Evans]

you know, what they're doing.

[Mia Wong]

Like, this is. This is not the Venezuelan army. Like, this is an actual army. Yeah, like you can't do this shit.

[Robert Evans]

There's a lot of guys left who have a lot of experience and have been preparing for this exact war for a very long, long time.

[Mia Wong]

Yeah. And who are ideologically motivated to not have the US like invade their country. The issues here with the fact that there's, there's no good way to open the strait, I think has been dictating a lot of what Trump's been doing with his negotiations. And I, I've started calling them like market negotiations, because if you look at when, whenever Trump releases a statement, so on, on Monday, for example, he released a thing saying like, ah, we've entered like, peace negotiations. And that was Monday morning as the markets were opening from a very panicky weekend where people were, it was sort of setting in that oil prices were going to be increasing. And whenever Trump does one of these speeches where he says, oh, well, we're gonna, we're gonna find some way to open the strait, or he does these, like, peace off, like he sends this peace deal to Iran, which we don't know the details of. There was like a reported leak of it in the Israeli media, but we don't know exactly what's in it from that Israeli leak. It didn't seem to seem to be a. I mean, it didn't seem to be something that the government would accept. Right. But the reason he's doing it is because he's trying to calm the markets down on a sort of, on a sort of day by day basis. And part of it also was that there was this whole panic that Trump had been threatening early this week to start doing all of these bombing campaigns against Iranian, like, civilian power facilities and supposedly non civilian power facilities too. And then on Monday, he was like, no, no, no, we're not actually doing that. Actually, we're doing peace talks. We're pushing this off for five days.

[Angela Yee]

Days.

[Mia Wong]

And this is again, market manipulation stuff. Right. Because he watched only we're only at

[Garrison Davis]

war during the weekend when the markets are closed.

[Leslie Southwick (quoted)]

Yeah.

[Mia Wong]

So, so this, this is what these negotiations are. Right. And, and that's why in Iran immediately, like, goes like, no, like, we're not, we're not in negotiations. And then released their own five point plan to end the war in which the US Would pay war damages. And they've been really consistent about this, which is the US Will pay war damages and reparations. And in this one. And also, you know, there was a whole thing about obviously, like the US Stopping the war. They're being deterrent measures in place to Keep the US from doing it again. They want the US to have its regional proxies stand down, which would also presumably end the other major thing that's going on in this war, which is just Israel ethnically cleansing the south of Lebanon. We just. We just released an episode about this. It's very good.

[Robert Evans]

Yeah. To make a defensive barrier.

[Mia Wong]

Yeah. And the other. The last part about this, and this is the part that, that I. That I, I think is the real kind of clincher here is that it would give Iran control over the Strait of Hormuz, which is a real problem for any kind of American negotiation. Because this was always a thing that the Iranian government never did. Right. They had the military capacity to hold the strait. The reason they didn't do it was that it would start a war. But now you've started the war, and now, like, now you've opened Pandora's box and you can't put the fact that they can do this militarily back into the box.

[Robert Evans]

Yeah, right.

[Mia Wong]

So now they're just being like, fuck it. You guys can't actually, like, defeat us militarily before the entire world economy collapses. Like, fuck it. Give us the straight. Now, I do want to mention something about some of the oil tankers, which is that, okay, the whole situation is very murky, but Iran has been. I mean, obviously it's been allowing its own tankers to go through, which is not a huge amount of oil, but it's some. We got a reported case, the statements on this were released by the Thai government and also a Thai oil company, company where the Thai basically foreign minister like, called the Iranian government and said, hey, we have an oil tanker here. Will you let it through? And they went, yeah, sure. So there seems to be some kind of process by which countries can do some kind of negotiation with the Iranian government and be let through what exactly? The look that looks like. And the details of it are really unclear. We don't know if this is a pattern or if they were just like, yeah, sure, whatever. Thailand, you can. You can do, do this. But, yeah, that's kind of the state of things, I guess. I guess we should also mention there's been a bunch of reporting at. The U.S. is deploying 2,000 paratroopers. I've seen both 1,000 and 2,000 cited as the number from the 82nd Airborne into the region, which presumably would be there for that, like, disastrous carg island campaign. But, oh, boy.

[Garrison Davis]

Which is not boots on the ground, because it's an island.

[Robert Evans]

It's an island.

[Garrison Davis]

It's Not.

[Robert Evans]

Doesn't count as the ground. Doesn't count as the ground.

[Mia Wong]

Doesn't count as the ground.

[Robert Evans]

We're good.

[Mia Wong]

I'm so excited for us to fight an entire war in the Arctic where he's like, there's not boots on the ground because they're all wearing snowshoes.

[Robert Evans]

Can't get us there. Nope.

[Garrison Davis]

You see, all the Marines are wearing jet packs. They never touch the ground.

[Robert Evans]

They never touch the ground. They've got those weird. Those weird water backpacks that you fly. You can fly with if you're at the ghost.

[Garrison Davis]

The little jet ski backpacks.

[Robert Evans]

They got those. They're not touching the ground.

[Mia Wong]

They're all. They're all laying a corduroy road in front of them. So they're not technically on the ground. They're on this road. Yeah. So things continue to go badly for kind of everyone involved in this war, except, I guess, the Israelis, who are.

[Robert Evans]

They seem to be happy.

[Mia Wong]

Yeah, they seem to be having a great time doing their. Doing another ethnic cleansing, but another group of people who've been doing extremely badly as a result of this and has gotten almost no coverage in the American press to the extent that, like, I found out about. I mean, like, I was already hearing about the stuff from just, like, my friends who are Indian, which is that things are very, very bad right now in east and Southeast Asia and just South Asia in general. Multiple countries, including, like, Thailand, for example, have either sent part or all of their government employees home and told them to just work from home because they can't afford to keep their offices or open because, like, cooling the offices is too expensive. There's sort of rolling crisis, like, across the entire sort of Pacific Rim area because all of these countries are unbelievably reliant on oil, natural gas. This is also down to stuff like cooking oil, too, which they also have not been able to get. And so, you know, you can look at Sri Lanka, where there are these just enormous fuel queues because the Sri Lankan government, government, they're four years out from the last time that they weren't able to input oil. That one was a sort of currency crisis, balance of payments issue they were having. But the moment there was. There was a problem with the oil supply, the government started doing rationing. So now you have these massive lines for people trying to get gasoline. That's, I think, one of the worst ones in terms of just pure inability to get gasoline. So this is a problem across the region. The BBC also said. I'm just going to read this quote from the BBC that they, quote, declared Wednesdays a public holiday day.

[Robert Evans]

Sure.

[Mia Wong]

So yeah, they're just adding another day to the weekend because they can't have businesses open because businesses can't afford to like, heat or cool themselves. They literally can't afford to keep the economy running. And variations of this are playing out all across South Asia. There's been a massive closure of industries in India. A whole bunch of restaurants, I think the estimates were about one fifth of restaurants are just gone because they can't get cooking oil. And you have these situations where like, anything that requires like cooking oil, even other things that are open, like, can't be used. Gujarat, the Indian state of Gujarat has a very large ceramic industry. And it's gone. It's been gone for like a month. 80% of it is shut down. This is 400,000 people affected by this because they're using propane and there's no propane. And this, this is playing out across the region. Right. There's been some reporting of, about concerns in Taiwan over whether they're going to have enough sort of liquefied natural gas in order to keep their, their ship facilities running. But Taiwan is like, kind of okay. It's places like Sri Lanka, it's places like Thailand, it's places like Myanmar, it's India where things are getting really, really bleak really quickly. There's a story that, that kind of did make it through into the American press about how the US temporarily lifted sanctions on Iranian oil specifically so that there were these tankers, Iranian tankers that, that weren't just at sea and the sanctions specifically on those tankers were lifted so India could buy it. And this has been happening with Russian oil too. And the reason this is happening is that if you're not getting these kind of injections of oil, the situation there would be even more bleak than it already is. And obviously there's some places where just everything is continuing as normal, but you're starting to see just kind of these countries unravel because so much of their infrastructure is based on, on oil and natural gas. That's, that's, that's coming through the Gulf and it's really fucking bleak. And it's something to keep in mind as, as this crisis rolls on, we're dealing with like gas price go up, which is obviously bad in an issue. There are a shit ton of people in the world where it's like, yeah, I know, like 400,000 people are out of their jobs because, because their entire ceramics industry is gone.

[Robert Evans]

Yeah, right.

[Mia Wong]

And these are not people who have money in the first place. And this crisis is just going to continue as long as the Trump keeps this war going.

[Robert Evans]

So I guess we'll see how long that is.

[Mia Wong]

Hopefully not long.

[Robert Evans]

Yeah, I mean, polling continues to be bad.

[Garrison Davis]

I'm sure Marco Rubio and J.D. vance are going to be on it as they. God, as they continue their negotiations.

[Robert Evans]

Yeah.

[Mia Wong]

There's not a long list of people that I want running negotiations less than J.D. vance. But, like, it's. It's not great. It's not great?

[Garrison Davis]

No, it's not great. It's. There's, there's no way to sugarcoat it here.

[Robert Evans]

It says something about how much fucking Kushner screwed the pooch that Iran is like, yeah, get Vance in here.

[Garrison Davis]

Bring in, bring in Vance.

[Robert Evans]

Get J.D. vance in here. I don't want to talk to that other guy again.

[Mia Wong]

There is like a legitimate problem they're having, which, like, there's been a lot of jokes about how like all the DEI firings are like, fucking them, but, like, it actually is. Is where there's like a whole bunch of the embassy staff people like, got fired because they weren't white and because the Doge people were just like it. And now it's like, I mean, this was a situation already. The US Government's like, experts on, on other countries tend to be like, I

[Robert Evans]

mean, if you look at what happened in the lead up to the Iraq war, anyone who knew anything about Iraq as an actual subject matter expert was basically isolated and cut out of like the place planning because they were all saying, don't do what you're doing. It's not gonna work well.

[Mia Wong]

And, and even, even, even in administrations, we regard as competent. Like, I, I randomly, like when I was at University of Chicago, like going to school, I, I met the guy who was, who was Setcom Syria analyst, like right when that beginning of the Syrian revolution and he was like reporting to Barack Obama about what was going on. And it was just like some guy, like, it was like, it was, it was like some guy who'd gotten like an undergrad degree. Right, Right. Yeah, like, and even those guys are getting like. It was just like some random asshole with, I mean like, he's like new his stuff, but he wasn't like a, he wasn't like an expert on this. Right. And even those people are gone. And so now you're dealing with those people who are supposed to be running these negotiations who just have like, literally no idea what's going on because they fired every non white person and so it's just catastrophic for the entire world.

[Robert Evans]

Yep. Cool.

[Garrison Davis]

One more ad break and we will return for a final segment giving an update on friend of the pod, Gregory Vivino.

[Robert Evans]

Oh, Greg.

[Garrison Davis]

All right, we are back. Unfortunately, it's time for our reoccurring Bevino segment. Hopefully the last God.

[Robert Evans]

What's boving on?

[Garrison Davis]

He just had a very interesting interview with the New York Times. He did, in which he said that before he was demoted from his role as commander at large, he had a plan at DHS to deport 100 million people. Something that DHS then tweeted about with a silly little graphic that they stole from another artist. The New York Times reported, quote, Mr. Bevino said he had a master plan that was in motion before his exile back to El Centuro. It would have neutralized protesters, he said, and made it possible to deport 100 million people. That is a goal that the Department of Homeland Security has widely promoted. If it sounds extreme, it's because it's nearly 10 times the estimated number of undocumented people in the country. It's also more than a quarter of the entire US Population. Unquote.

[Mia Wong]

Yep.

[Garrison Davis]

Gregory is also quoted in this piece as saying, I wish I'd caught even more illegal aliens. I mean, we went as hard as we could, but there's always a creative and innovative solution to catching more.

[Ilya Ayub]

More.

[Garrison Davis]

Unquote.

[Steven Monticelli]

God.

[Garrison Davis]

Would have been nice for a journalist to follow up on what he meant by that.

[Mia Wong]

Yep. Yep.

[Robert Evans]

Mm.

[Mia Wong]

I want to talk a little bit about that 100 million number because there was a New York Times report where Trump said in one meeting during the 2024 campaign, Mr. Trump said that if it was up to Mr. Miller, there would only be a hundred million people in this country and they would all look like Mr. Miller.

[Robert Evans]

Wow. Yeah. I mean, that's. He's not lying.

[Mia Wong]

Yeah. You know, and he, He, I guess has the numbers reversed in that. In that the Bovino One is deport 100 billion people, which is the one that's been floating around in sort of like right wing circles and more. And this one was that there's only a hundred million left, but.

[Garrison Davis]

And it's completely disconnected from reality. And like the economic reasons for why. Yeah, these deportations are even something disconnected from the economic reasons behind. Find this sort of immigration enforcement.

[Mia Wong]

Yeah.

[Garrison Davis]

There's just no logistical capacity.

[Mia Wong]

No, they're like. It's, it's. I mean, yeah, it would be one of the largest ethnic cleansings we've ever seen, but it's. It's a Thing that, like, people like Miller and Bovino want. This is kind of split that we've seen a lot in Trump administration between the people who actually want the economy to work and the people who have, like some other ideological goal.

[Garrison Davis]

Yeah.

[Mia Wong]

Because there's the people who just want the white ethnostate. Right, Right. And that's sort of the Bovino, like Miller wing. And then there's everyone else, like Scott Best and like the treasury people who were like, holy shit. Like, yeah, we want. We want there that. We want that. We like, we, we, we. We need the permanently subjugated immigrant underclass. You can't deport 100. And, well, this. This wouldn't even be the immigrant underclass.

[Ilya Ayub]

Right.

[Mia Wong]

This is. This is like most of the non white people in the U.S. right, who, who they're talking about deporting, who are just, you know, people here like me. And obviously, like, we don't know if Vivino's just lying about this because who knows it's Bavino.

[Garrison Davis]

But yeah, what this master plan actually looks like or what it included, also not expounded upon, something that the journalists at least did not get an answer out of that was then reported.

[Mia Wong]

No.

[Garrison Davis]

It's unclear, but during Bavino's, like, reign at Border Patrol, this number was something that DHS mentioned as a gold multiple times. For an example, earlier this month, Louisiana Senator John Kennedy was questioning David J. Beer, Director of Immigration Studies at the Cato Institute, about his criticism of dhs. And Senator Kennedy read a quote from Beer's social media.

[Michael Phillips]

They referring to Republicans think they control their way into us accepting ethnic cleansing. End quote. Your.

[Steven Monticelli]

Your words, not mine.

[Mia Wong]

Did I read that correctly? That was in regard to a. Did I read that about advocating 100 million deportations? That is what DHS has tweeted from their own account. 100 million deep hurts would be ethnic cleansing. You would be one third of. Of the country. So, yes, there are people within the Department of Homeland. Homeland Security.

[Michael Phillips]

You don't think this is hyperbolic?

[Mia Wong]

Give me 30 more seconds. I think advocating 100 million. I'm having fun. Ethnic cleansing on February 5th. He really thought he ate with that one.

[Dana Al Kurd]

He's.

[Robert Evans]

Yeah, he was really. He was really thinking he was going to dine out on that, huh?

[Dana Al Kurd]

Wow.

[Mia Wong]

What a loser. What is rattling around in your skull that you listen to that and think you won? Like, what. What. What is happening here? God, you're having fun.

[Robert Evans]

You're having fun with that, huh? Okay.

[Garrison Davis]

Speaking of the Department of Homeland Security, there is a new big boss in Town. Former Senator Mark Wayne Mullen has been sworn in as the new DHS Secretary. During his confirmation hearings, Mullen said he regrets calling Alex Preddy a quote, quote, deranged individual who came to cause max damage.

[Steven Monticelli]

Those words probably should have been retracted. I shouldn't have said that. And Secretary, I wouldn't.

[Mia Wong]

The investigation is ongoing and there is,

[Steven Monticelli]

like I said, there's sometimes going to make mistake and I own it. That one. I. I went out there too fast. I was responding immediately without the facts. That's my fault. That won't happen as secretary.

[Mia Wong]

So you. You regret that statement? I already said that.

[Steven Monticelli]

Yes, sir. Would you want to apologize to the

[Mia Wong]

family of Alex Preddy?

[Steven Monticelli]

Well, sir, I just said I regret those statements.

[Mia Wong]

Is that the same as an apology?

[Steven Monticelli]

I haven't seen the investigation. We'll let the investigation go through, and if I'm proven wrong, then I will. Absolutely.

[Robert Evans]

Is that the same as an apology? Oh, God, man.

[Dana Al Kurd]

Just speak like a person.

[Robert Evans]

We gotta bring Mr. Rogers in here to tell you what an apology is like. Come on, bro.

[Dana Al Kurd]

I also. There's been a lot of discourse about his name being Mark Wayne.

[Angela Yee]

You can't me. That guy doesn't look like a Mark Wayne.

[Robert Evans]

He looks like a Mark Wayne.

[Dana Al Kurd]

He looks like a Mark Wayne. Thank you so much. He's. Jesus Christ. Just say sorry, dude.

[Garrison Davis]

Later on in this same hearing, Mullen defended the actions of the officer who killed Renee Good. Saying, quote, it's very clear that an officer had to make a split decision in that case. Throughout these hearings, Mullen reiterated that he wants to keep the agency out of the nuke news. Quote, my goal in six months is that we are not in the lead story every single day, unquote. When questioned about what ICE reforms he would be willing to put into law, Mullen said that a quote, unquote, better approach would be working with local municipalities.

[Steven Monticelli]

I would love to see ICE become a transport more than the front line. If we get back. If we can get back into just simply working with law enforcement, we're going to them and we're picking up these criminals from their jail. 1. We're going to reimburse them for having the person there. And partnership is vitally important. I don't think there needs to be

[Michael Phillips]

a wall to change that.

[Steven Monticelli]

I think I can work within what is there, but there's a. There's an approach that can happen, but

[Michael Phillips]

we got to have partners.

[Garrison Davis]

What he's trying to do here is essentially blame ICE overreach on sanctuary city policies, policies saying that ICE would need to be in all these places being on the ground if sanctuary cities would just cooperate with ICE for removal operations. In response to a question about ICE and CBP illegally entering people's homes, Mullen said, quote, we will not enter a home or a place of business without a judicial warrant unless we're pursuing an individual that runs into a place of business, business or residence or a house. Unquote. If this is true, this definitely is a partial movement still with this exception, but a partial movement from the so called administrative warrants which became popular under

[Mia Wong]

Kristi Noem, which big if like it.

[Garrison Davis]

I, I think as like James has said before, I think there is like the wind is changing a little bit. Yeah but I mean it could very easily change back the other way. It is, it is simply too soon to to say and obviously none of these things will be like satisfactory. ICE should not exist as an agency. Yeah but it is interesting to to see the Trump administration slowly adjust towards pressure being put on ICE from the public. At Mullen's swearing in ceremony, Trump said, quote, generally speaking, Mark Wayne would be very much in favor of what I'm in favor of.

[Mia Wong]

Of.

[Garrison Davis]

He might be worse. He might be worse than me.

[Mia Wong]

Oh no. So generally speaking I think I can answer that. Mark Wayne would be very much in favor of what I'm in favor of. Would you say that's right, Mark? I can't think of too many things. He might be worse, he might be worse than me. That's, that's my look at his wife and say that's right. But so yeah, he's going to be great.

[Garrison Davis]

So we'll see. We'll see what that turns out to be.

[Mia Wong]

Great stuff, great stuff. It's just like these people are so bizarre.

[Dana Al Kurd]

Like they can't talk, they sound ridiculous. Nightmare that that's my only takes.

[Mia Wong]

They can't do nor they can't human.

[Garrison Davis]

If you would like to send us a news tip relevant for news purposes, you can do so at coolzonetipsoton me again for news related tips only.

[Mia Wong]

Put a trans girl on your couch.

[Garrison Davis]

We reported the news.

[Robert Evans]

We reported the news.

[Steven Monticelli]

We reported the news.

[Robert Evans]

Hey, we'll be back Monday with more episodes every week from now until the heat death of the universe.

[Dana Al Kurd]

It could Happen Here is a production

[Mia Wong]

of Cool Zone Media.

[Dana Al Kurd]

For more podcasts from Cool Zone Media, Visit our website coolzonemedia.com or check us out on the iHeartRadio app, Apple Podcasts or wherever you listen to podcasts you

[Angela Yee]

can now find sources for.

[Dana Al Kurd]

It could happen here listed directly in episode descriptions. Thanks for listening.

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