Andrew Egger (4:22)

The

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Mike Pesca (6:19)

Hello and welcome back to the show that promises not to touch the two hour mark while handing out medals. It's not even mad Today we speak of the length and breadth of State of the Union and also maybe a little AI talk. We do so as we promise to uphold our reputation for refutation while at the same time vowing to be not even mad. We. I've been using this pronoun. Who are we? This week we are Austin Berg of the Chicago Policy Center. He's the executive director of that center. In a sentence, tell me what the center centers on. Austin.

Austin Berg (7:07)

We work to make Chicago government the most effective, transparent and accountable big city government in America. Which is usually a laugh line falling

Mike Pesca (7:15)

down on the job lately. Yeah. So Fort Worth has that title like who you're going in for.

Austin Berg (7:23)

It depends on what kind of governance. Right. I think there's it depends on the lane, but we're pretty bad on most lanes right now. Getting better.

Mike Pesca (7:32)

Andrew Agar is White House correspondent for the Bulwark. He previously covered politics for the Dispatch and the Weekly Standard. And who are you gunning for Andrew?

Andrew Egger (7:41)

Oh, I got so many problems with so many people here today. Let's just do a quick spiel about the Bulwark. The Bulwark. It depends who you ask. The Bulwark is in our view, it's sort of center center independent media outlet. We're doing a lot of stuff on Substack. We're doing a Lot of Stuff on YouTube. We're in your inboxes, we're in your feeds. You can't get away from us. The bulwark will swallow the world. Some people call us sort of like the rump parliament of the dead old Republican Party that pre existed. We're a bunch of never Trumpers. Not so much anymore, because there's no such real thing as never Trump, because Trump is and has been the main character of American politics for a decade.

Mike Pesca (8:17)

Right.

Andrew Egger (8:18)

You can't really never him at this point anymore. But that's what we're doing. And I cover the White House for us.

Mike Pesca (8:22)

Yes. And if you were worrying or wondering, is Trump really the thing, like the force that penetrates and surrounds us, there was this State of the Union and the State of the Union was interminable. And this isn't just a free floating critique. I think it really did cover everything he was trying to get to at the State of the Union. So I'll let you guys take it where you will. You could talk about it like a theater review, because I think that's how he wanted to present it. You can talk about it like it's a jumping off point. Well, even though Trump said this or that about a policy, maybe he was hinting at a policy that could work. Austin, I'm especially interested in your takeaways. And if there was anything there we, or maybe a conservative or just a person who wants efficient government could latch

Austin Berg (9:09)

onto, I'll take it from a media criticism standpoint. So we started. I run a public affairs agency called Iron Light. And I remember when Ironlight started, it was actually in the era of Vine. And if you all remember, in the vine era, pre TikTok, there was this sort of cultural panic about how Americans only can think about things for six seconds. And I would always talk to clients in that period and tell them, hey, have you heard of this podcast? It's the biggest podcast in the world. It's this guy, Joe Rogan, and people listen to it for three hours. And I thought of that. Similarly, when people were talking about the length of this speech and for the same reason that Rogan podcast is very successful, it's optimized for clip farming. And I think the state of the Union is now like, it's going to be even longer. I think the trend, they will just continue to get longer because millions and millions and millions more people are going to watch the clips than the whole thing. So why not get as many clips as possible? And so I think you see this as kind of A set piece for the midterms. Trump clip farming. And if you think of it in those terms, it's like, yeah, of course you do the thing where you say stand up. If you think the first duty of American government is to protect American citizens and not illegal aliens, like, that's just a midterm ad. So I think there are just many moments like that.

Mike Pesca (10:26)

Yeah. So maybe it was, by Trump's own lights, a success. Andrew, I was watching you watching it. Literally the Bulwark had coverage of the speech where you or Tim Miller or Sam were in the corner rolling your eyes. And I said, is this good programming? And then I remember, just like Austin reminded me about the popularity of Joe Rogan. Yes, Twitch. And that's what they do on Twitch, they watch people watch things. And it's unbelievably effective and a great audience gatherer. But what were your takes, do you think even from Trump's perspective, things worked out well with that speech?

Andrew Egger (11:02)

This has become extra terrifying to me now because you're already pre primed for many of the things that I may end up having to say if they're thoughts I've had before on our stream last night. Yeah, I don't know. I take Austan's point about the. I think he's correct that that was basically the thing they were going for. There was really no overarching theme to this speech at all. It was a heap of anecdotes and vignettes and sort of moments where he was trying to put Democrats on the spot and moments where he was spotlighting this American hero story or that immigrant villain's story, just like maximizing the number of just like little, like you say, kind of clippable moments. I do wonder though, whether that in this specific instance was kind of a mistake, because the right wing and the left wing kind of content ecosystems are not exactly lacking for just sort of like pre chewed, easy to digest, like momentary vignette type content. Right. I mean, insofar as sort of like political strategy right now is optimized for getting into those ecosystems, I think it tends to work better for people who don't have a spotlight already. Like if you are like a congressional candidate on the make who wants to catch some sort of big wave going really viral, getting into those ecosystems might help you. Trump already lives in those ecosystems. Trump is already like commanding the right wing media ecosystem like nobody ever has before, maybe like nobody ever will, who knows? And I think that what in theory would have been a road not taken last night would have been to actually capture, not like just the algorithmically pre sorted audience, which he already commands a pretty good share of, but to take advantage of the fact that the State of the Union is one of these moments where a larger than usual number of people still tune in. It's a friendly audience, but it's not a completely preaching to the choir audience. And tried to make some sort of overarching theory of the case for why he thinks the country's in particularly good shape for what he thinks they're gonna be trying to do over the next year. And I think that it was that lack of succeeding on the merits of a speech as a speech that could be digested by a television audience. I think that is a bad outcome for Trump, especially given just the, the state that he is in politically right now. I mean, a political status quo. Preserving this moment all the way through this year until November is not something that the president wants to do going into the midterm. So I thought it was a miss in that respect.

Mike Pesca (13:27)

So due to the miracle of time, the State of the Union will have been two days ago. Just wanted to note that when this airs, but we continue. That's a sweet. That's a sweet idea, Andrew. And in fact, I heard Pete Buttigieg saying a version of that on the Bulwark show, which is that many regular Americans tune into the State of the Union to find out what this State of the Union might mean for me. And I said to myself, I don't think I'm too much of a cynical political insider. Say, I don't think they do that. I don't even know if they once did. But that is not really how they're using the State of the Union. I don't even know if they can use the State of the Union, not just given attention spans, but given, you know, the audience at the time will be not insignificant, but it's going to be exponentially more significant once it is mined for clips. I also think that he might have told himself Trump and his speechwriters might have told himself that he scored some wins by constantly talking about when the Democrats didn't stand. And I counted at least six times. Mrs. Rootska, tonight I promise you, we will ensure justice for your magnificent daughter Irina. How do you not stand? How do you not stand? The men's gold medal hockey team. Go ahead. That's the first time I ever saw them standing. And not actually all of them did stand. Even a shout out to the absent Nancy Pelosi, of course, did she stand? If she's here. So, you know, that does I really don't think that influences influences any voter in the midterms. I think that is kind of thrilling to the Fox audience. But the question is if he had accomplishments to tout, I'm going to put a pin in that because I think maybe on some prices, to be very, very fair, they have come down and it's good that he's talking about it. But if he had real accomplishments to tout, given his philosophy of the case, would it even work in the State of the Union? So if Trump R X was really doing a tenth of what he said it was doing, could that mess or is the cynical sort of skewering my enemies message the only one that will leave ever actually gain purchase?

Austin Berg (15:29)

AUSTIN well, it was definitely a preview of midterm messaging in that his main message is that Democrats are crazy and you see a lot of leading Democratic candidates potentially for president having to address that. So Gavin Newsom, I think today was actually getting a little bit of flack because he was in an interview saying we have to be, quote, culturally normal or more culturally normal. And he got a lot of heat for that. But the fact is Trump's not getting good marks on what is supposed to be his number one issue, which is immigration, because of how this ICE expansion and rollout has worked. We were in the eye of the storm for that here in Chicago for about six weeks and saw firsthand the belligerence and just inefficacy and brutality of that up close. And it was not fun and he's not winning on that issue. So to the extent he can tout accomplishments, I think the the biggest one that is most clear to an average voter is that the border was insane and it was chaotic. And now it is not now what happens after that. You can't keep running that back over and over again. And I don't think this what's funny is the median voter, I think, wants to extreme enforcement at the border and pretty lax enforcement in the interior. That's where the median voter is. And I don't think Trump is going to do the latter.

Mike Pesca (16:53)

Will killings that occurred 10 months before the elections still play among voters in the elections? Or maybe you can make the case that without even without them, then it'll come back to the issue of affordability in which Trump is also not doing well.

Andrew Egger (17:10)

On ANDREW I do think that specifically these killings that we saw in Minneapolis with Renee Goode and Alex Preddy have sort of they have taken on like a political salience because of just the pretty open and shut nature of the way that they took place during, like Austin is saying, this environment of what everyone could kind of perceive as sort of out of control brutality. I mean, it did not just.

Mike Pesca (17:34)

And the lying about them as well. That's another major fact.

Andrew Egger (17:38)

Yes, yeah, yeah. And so I think that they are going to continue to be sort of seen as rallying cries, at least for sort of the Democratic opposition. And it's not just that they are a base rallying thing, but they are a rallying cry that has this much broader resonance among independents. I mean, like, this is the main thing that we have seen, the main story of Trump's first year sort of political sag, of the coalition that he put together coming out of just like the absolute political catastrophe of the late Biden years with the last minute attempt to Hail Mary to Kamala Harris. I mean, Trump came out of that with the possibility of really carrying this coalition that had carried him back to power. They are abandoning him in droves across young people, minorities, and in particular, independents. I mean, the numbers that Trump is getting among independents right now are like, like truly astonishing. It's like 20% in some polls, approval, 23% approval in some polls. I mean, and this is because of these extremely evocative moments, like the killings of Renee Good and like the killings of Alex Preddy, that are not just like, so tragic on their own terms, but are also so easy to understand within this broader narrative of administration policy, and particularly a policy of an administration that, as I said before, is kind of out of control. And the one other thing I'd add is that like, like, yes, we do not know what actual things are going to really drive the news six, seven, eight months from now. But again, we had a cycle of elections late last year, right? Not a ton of them, they were the off year elections. But Democrats cleaned up kind of across the board in a way that made Republicans really look around and say, wow, we need to figure out some kind of recalibration. And the question was, what will Trump do to recalibrate? That was already now, three months ago. That was before Minneapolis. That was before all of these things. We are now, from the point of view of last year year's off term elections, we're a quarter of the way to the midterms today, and we're still kind of asking, well, is there gonna be some pivot? Is there gonna be some pivot? Are we gonna see some kind of new thing out of the President that is going to improve his political standing? And so Far we keep seeing again, things like the State of the Union. Well, maybe this is a great opportunity. This is a really high profile event. Maybe we'll see some kind of change. And again, it's just all the same playbook. It's all, the Democrats are worse, the Democrats are crazy. Don't you hate the Democrats? Don't you think they're gonna ruin the country? And it's just not. That is paying off to anybody outside the MAGA base right now.

Mike Pesca (20:05)

Well, it's not a playbook, it's talking points. And that's an important thing to mention. He doesn't have new policies. I guess he has tinkerings. Trump R X or the non mentioned, what was it, the democracy games that he announced in that primetime address that didn't need to be a primetime address where he talked about the warrior dividend of 1776. And this is a huge problem with Trump in that he's not terrible in terms of diagnosing problems like some stuff with transgender surgery or where the border was. He gets it right. Good politicians have to meet the public where they are. But then when he tries to execute on that, he always goes too far. He always gets it wrong. As with Doge, as with defining our border problems as just allowing ICE to. To kill people without accountability. And there is no evidence that he has any better ideas to actually implement to address these problems. And even if you want to look at the number one issue, affordability, I really do think carrot tariffs run counter to any sort of affordability agenda. So as much as he was right to talk about specific prices that have lowered, his policies didn't have much to do with that, to be fair. But also the thing he's fighting the most for is to allow affordability to go out of control. And I don't know if it's that the American people have figured this out. They just have. They just live their lives and see things aren't going well. Right, Austin?

Austin Berg (21:38)

Yeah. You saw him speak to a couple affordability points in that speech. One was Trump rx, as you mentioned, mixed to unclear results so far on Trump rx. You then had Trump accounts, which is Michael Dell contributing $5 billion, I believe, which is just an insane amount to think of as a philanthropic donation for one guy.

Mike Pesca (21:58)

Yeah, for a federal government, it's nothing.

Austin Berg (22:00)

Yeah, yeah. For federal government, it's a drop in the bucket. But for one guy to do that is pretty amazing. It was. There was also one of several interesting Trump Trumpisms in that speech. He made sure that people knew he did not name them Trump accounts. That was Michael Dell who named them. That's.

Mike Pesca (22:17)

I also want to interrupt when he was dedicating the I almost it the Museum of Peace, the Trump center for Peace, he made it very clear that he was surprised by Marco Rubio to name it after him. He was touched and surprised.

Austin Berg (22:29)

Wasn't his act the other, the other Trumpism in that speech. And he actually didn't go off book hardly at all. There were just a couple moments. But one was this speaks to what we were talking about before we started taping. He had a line that was offhand where he said we love religion and we love bringing it back. And I thought that was such a Trump line. But yeah, so he talked about Trump rx, talked about Trump accounts and then he talked about no tax on tips. And with the exception of no tax on tips, what's important to understand, I think from an affordability perspective is that this administration has very clearly decided that it's not going to try to do anything in Congress and ultimately lasting change that the market believes in is going to have to come through Congress. Now that's not to say there's not a lot you can do with executive power. The Department of Energy and Chris Wright is, is doing a lot to let energy production rip to feed the new industrial revolution and the largest capital expenditure in the history of humanity with AI and that's certainly helping that ultimately helps people's pocketbooks and bottom line for many Americans. But again, I think it's very hard to get markets to believe much long term if you are not leveraging Congress in some way and it's hard to get big things done.

Mike Pesca (23:46)

Yeah. Is there anything he could have said to cauterize any of these wounds?

Andrew Egger (23:51)

Let me give him like I don't know if credit is the right word on one thing. He was dealt a really hard hand with the timing of the State of the Union when it came to the tariffs specifically. Cuz you just talked about how he doesn't really have like a policy agenda. The tariffs are one humongous exception to that. I mean like that has been the big like policy overarching story of the whole first Trump term. I mean I and a lot of other people think it was not a good policy agenda in a lot of respects. But at least it had an ethos. Right? I mean at least there was something happening. He had kind of an end goal state in mind of closing the trade deficit, bringing back American manufacturing. A lot of bad economics going on under the hood. But that was the pitch. And that was, politically, the message is like, this is a work in progress. But you can see it happening, you can see these trade deals being made. And we're gonna get to this golden age any minute, so just you wait. And then four days before the State of the Union, I don't know if it's exactly four days, but about half a week before the State of the Union, the Supreme Court slaps down the biggest tent pole authority under which he was trying to run this trade war. The most flexible, these AIPA tariffs. Basically he's got a bunch more that were not under this authority, but this was the one that he basically had been trying to put the fear of God into every world leader with, because under interpretation of that statute, he basically had unlimited authority to put any tariff on any good from any country for any duration at any level. And it was like just any time he would set them high and then he would set them low and then he would put them all over the place. And it had a lot of economic downsides, but at least it was a pitch. And then it was gone. And so now what can he say? What can he even get up and do? He can try to sort of redirect blame and say, well, the Supreme Court really shouldn't have done that and we're gonna try to put it back. But it's plainly not the same pitch as he would have been making if the court had waited another week to put out its decision on that. He should have seen it coming, cuz everyone knew it was likely to come down that way because it wasn't a breathtaking assertion of executive power under that statute. But you can kind of feel for him and all the golden age things that he wanted to say in that speech and was unable.

Mike Pesca (26:02)

Yeah, yeah. By doing this plainly unconstitutional thing that gets called unconstitutional at an inopportune time. It did really put a burr in his saddle. I guess he could have made it worse. He could have talked about specific justices. What he did was call it an unfortunate Supreme Court ruling. And for Donald Trump, that is Baby Rockaby. That is Rockaby Baby and kid gloves. That is not going off script. So I suppose whoever wrote that speech thought that that was fortunate and he could have picked a worse fight. He could have made things worse with Iran. Even the Iran rhetoric was tempered given, I don't know, maybe given what he's really thinking about Iran, but also what it could have been. And I think quite wisely he just basically pivoted to the might of the US Military and some talk about the success of the Venezuela operation, which, you know, serves a purpose a couple of ways as a warning to Iran and also for his own domestic agenda to talk about, you know, how great the execution of the military was and how wise he was to have executed it. All right, so here we are.

Andrew Egger (27:06)

Can I just say really quickly.

Mike Pesca (27:08)

Yeah, go ahead. Go ahead.

Andrew Egger (27:09)

Real quick on that. It is insane to me, and this is just sort of an indictment of just how impossible it is to actually keep tabs on all the things that are going on in the news cycle all the time right now. But we went and did a military operation and snatched the president of Venezuela, the dictator there, off the street out of his palace. We brought him in.

Austin Berg (27:26)

I don't even know why you're bringing him up.

Ad Voice (27:27)

He's still here.

Andrew Egger (27:29)

He's just like in a jail in New York. And like, they're doing a lot. I was like, oh, yeah, did that happen?

Mike Pesca (27:35)

Very bad drought.

Andrew Egger (27:36)

I wonder what's going on in Venezuela right now.

Austin Berg (27:39)

Did you guys catch the hockey?

Ad Voice (27:40)

That was cool.

Mike Pesca (27:44)

Yeah, we did that to Venezuela, didn't we? And then almost nothing changed.

Andrew Egger (27:49)

Huh.

Mike Pesca (27:49)

So I guess continuity. He's a continuity president. Not here, but in Venezuela.

Austin Berg (27:54)

One thing on the tariffs, Mike, one lesson that he did not learn in that speech, which is very clear throughout history, is that the more a president attacks the legitimacy of the Supreme Court, the more the legitimacy of the Supreme Court increases. And that has always been the case throughout American history. And it's the case with this as well.

Mike Pesca (28:10)

Yeah. But also, attacking the legitimacy of individual justices has a track record of driving them into a corner. You would think they just stand as redoubts of wisdom and exemplars of the Constitution walking among us. But they're human beings. And if he tears Gorsuch apart, who knows? I think maybe Gorsuch will come back and find his rectitude and his voice and, you know, be a much more moderate justice than maybe he would have been otherwise. I don't know that Trump is playing this out, but at least in the speech, he did not go as far as he might have. In a moment, we'll be back with more of Andrew Egger and Austin Berg AB and AE to talk about AI Back in a minute. It with not even mad. The gist is brought to you by Progressive Insurance. Fiscally responsible financial geniuses, monetary magicians. These are things people say about drivers who switch their car insurance to Progressive and save hundreds. Visit progressive.com to see if you could save Progressive Casualty Insurance Company and affiliates potential savings will vary. Not available in all states or situation.

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Mike Pesca (29:56)

We're back with Not Even Mad, talking to Austin Berg, who is trying to get Chicago right again with the Chicago Policy Center. You know, I don't know, maybe it's right already and he's just trying to tell everyone just how right it is. And then of course there's Andrew Egger, who is the White House correspondent for the Bulwark, or as I call him, Andrew Ethos Egger. Okay, maybe he calls himself that. I enjoyed your use of the word Ethos. Andrew, can you tell us what's going on? Maybe we'll come back to the State of the Union. But I have to know about what the Pentagon is doing in terms of warning the AI company Anthropic. And the question is, as with so much, can they do that?

Andrew Egger (30:38)

So this is a crazy story. I'm obsessed with it. It is an enormously consequential story because what it is is it's really the first real fight between the US government and an AI company over who gets to actually make the calls about what these insane MA means, that we don't really know what they can do and we don't really know how they do it, but they're probably going to be the future in a whole lot of different ways. Who gets to make the final calls about how they're used. Basically, what's happening is the Department of Defense has a number of contracts with a number of different AI labs to do a bunch of different stuff. But the one that they're using, at least according to reports, the ones that they're most integrated with are the AI LLM bots that are coming out of Anthropic. Anthropic has contracts specifically to do classified work with the DoD, which is, as far as we're aware, and it's been reported they're the only one that's kind of operating under those sort of circumstances. They were reportedly used. Their bots were apparently used during that attack that we mentioned in Venezuela a couple of months ago at this point. So they're in there, they've got this big contract, Pete Hegseth and the Department of Defense are now threatening not only to rip up Anthropic's government contracts, like the $200 million deal that they have with the DOD right now, they are also threatening to basically make Anthropic radioactive for anybody who does any kind of business with the DoD by putting them on what's called a supply chain risk list, such that if you have any contracts with the Defense Department of any kind, you yourself cannot have any business relationship. Anthropic, it's basically a mechanism that has only ever really been used for foreign threat actors or tech companies out of China or Russia, things like that. You can't have a Chinese owned cybersecurity company doing your cybersecurity stuff and have business with the Department of Defense. What Hegseth wants is for Anthropic to just drop a couple of constraints that Anthropic has in their contract on how the Department of Defense can use these AI models. There are not a lot of them, but the two big sticking points. And again, this is all in public reporting. Some of it's opaque because again, even the terms under which Anthropic contracts with the Defense Department under classified settings are not widely known. But it has been reported that what Anthropic's sticking points are are specifically they don't want their models used to conduct mass American surveillance. Not really clear why the Department of Defense would even want that. That might be sort of a hypothetical case they're fighting over, but the bigger one for actual policy is they do not want their models used, at least yet for autonomous weapons, for a self piloting drone that can identify a target all by itself without a human, Go ahead, go and eliminate that target. So that's the fight. The Defense Department says, look, you shouldn't be making the calls of whether we're gonna use these kind of drones. We just wanna license your chatbot. This is up to the government to decide how we're gonna actually use these technologies. They say we should be able to use them for, and their term is all lawful purposes. So it's actually not against the law for them to manufacture, develop, distribute, use these sorts of drones. They'd like to be able to do so if they choose to do so. Again, it's still somewhat hypothetical. It's not necessarily clear that the Pentagon would begin using these tomorrow if they could. But it's the fight over kind of who gets to decide. And the DoD has given anthropic a deadline of I guess today from the Point of view of this podcast. Friday to. To figure it out. No, am I wrong? It releases on Thursday. Sorry. Okay, so still tomorrow in your present. Our future. It is still in your future as well.

Mike Pesca (34:33)

That's how good, Clark.

Andrew Egger (34:34)

One more day to decide.

Mike Pesca (34:36)

Yes. So thank you, Andrew. Excellent laying of the predicate. And we'll come back to you for analysis points that jump to my mind and then I'll throw it to you. Austin, is. Is Pete Hegseth the guy or the entity the Pentagon under Pete Hegseth the guy to make the right calls about this technology? And question 2. How much should we take Dario Amodi's word on it that he has ethical concerns about this? And how much is this, you know, market positioning? You don't want your brand name associated with either mass surveillance or autonomous weapons.

Austin Berg (35:15)

Austin, this is part of a growing concern that I have about the US economy in general, which is the extraordinary. Politicization. Politicization. And always tough word, I'm sure, Mike, when you use that on the radio, you just pick another word. You got it?

Mike Pesca (35:29)

You entered politicization.

Austin Berg (35:32)

Yeah, exactly. Yeah. So if you're the head of a major company, the amount of kowtowing and strategery that you must do, depending on who the president is, if you're in the United States, is just really crazy and increasing. And you see this in some industries, this has been the norm for a while. So, like I've worked with a lot of folks in solar energy and they call it the solar coaster, because whoever's the President completely changes whatever the policy is in the United States with regard to solar energy. And it makes it really hard to make long term investments in that industry. For that reason, the quasi nationalization of a frontier AI lab is a very, very bad idea. And as Andrew said, and it's important to be clear about this, Anthropic has a user agreement. When you and I subscribe to Claude, we have a user agreement agreement. The Pentagon is the same. It had a contract with them for years with that user agreement. And now Hegseth is threatening to destroy the company if they don't change their user agreement. And Anthropica said, no thanks, we're good, we'd rather not work with you. And Heth says, the hell you're not. You are working with us. And I find one of the deep ironies here is that folks in this space often talk about supply chain risk. We have to ensure that we don't have this woke AI as part of our supply chain. Right. Well, you know, What's a huge supply chain risk if all the American companies that are publicly traded that use Claude can immediately no longer use it because it's deemed a foreign adversary? And just because Pete Hegseth said so, that's a major supply chain risk. That's a major risk to the US Economy. I think I'll close Dean Ball with had a great line on this. He's one of, I would say, like the leading voices on the right when it comes to AI policy. Policy. He worked. Yeah, he's great. So he had, he had three points. He goes, according to the Pentagon, anthropic is one, woke two such a national security risk that they need to be regulated in a severe manner usually reserved for foreign adversaries, and three, so essential for the military that they need to be commandeered using wartime authority. So whose fault is this? Who hired this horrible, risky company to be at the heart of our national security apparatus? So it's really, really, really disappointing move. And this is such a huge part of the American economy and global economy right now that it really spooks me that one person can really change the trajectory of that in this way.

Mike Pesca (38:03)

And it does strike.

Andrew Egger (38:04)

Let me real quick.

Mike Pesca (38:04)

Go ahead, Andrew.

Andrew Egger (38:05)

Yeah, just off the point, I mean the point that you make is so true and it is almost so obviously true that I do almost wonder just to steel man it a little bit whether this is just one of these sort classic Trump administration threatened the worst thing you can possibly think of and see what it shakes loose. You could in theory see a situation where Hegseth Anthropic stands firm and Hegseth either backs off or stops at tearing up the contract and doesn't try to invoke the Defense Production act or doesn't put them on the supply chain risk list. I would hope that that would be the case. And we should probably at least acknowledge that it's still within the realm of possibility. They have not actually taken these steps yet. They have just publicly threatened what would be, I totally agree with you, totally ruinous courses of action if they went either of those directions.

Mike Pesca (38:57)

Yeah. It also seems to me that they're using analogies or they're using precedent that don't apply, you know, Huawei or Kapersky, which is on the supply chain risk lab. These are literally foreign adversaries that you don't know if they will inject some, some code or bugs and, and pollute the supply chain. Not only does not this not apply to Anthropic, Anthropic has this technology that's way beyond what anyone else has. So this is almost like getting upset with a military manufacturer who says, no, I'm not going to build that bomb. Right? I'm not going to. We have the technology to deliver on the atom bomb, but we choose not to investigate how to build a neutron bomb, which is the mythical bomb that will leave structures in place, but only kill people. That to force a company to make that neutron bomb, which is like forcing Anthropic to make this military technology that it defines as unethical, is unlike anything else that I can think of. And I also have to think that the Hegseth threat is just bluster. What's he going to do, take over Anthropic and have colonel's code instead of Dario and his geniuses who don't want to do this thing? So I don't know if you guys think that he really can compel Anthropic to give up technology or destructive ability that it doesn't want to give up.

Austin Berg (40:33)

I think it's important to note that, that the Steelman of this case would be made better if Anthropic was the only frontier AI lab. And we're going. We're hurtling towards this AGI world where it's the ultimate superweapon. And by God, if America doesn't get there first, then our adversaries are going to get it and wipe us off the map. Okay, then maybe we have a case here. America has the extraordinary good fortune to be home to every real frontier AI lab. Pete Hegseth could switch vendors like any other government contractor. I'm sure that Gemini, that Google would love to have this business, that OpenAI would love to have this business. But right now, I believe, Andrew, you would know better. Well, so Palantir, I believe, brought Anthropic in. That's why Anthropic has this contract, right? So Palantir brought them to the dance. Now, I do think if this was only one company, that's one argument. But there's many other companies who could do this work. And it seems to me it's just one of those things where Pete Hegseth is like, oh, man, it would be really annoying if we had to have another vendor come in and fix all this stuff on the fly. So you need to stay here. Anthropic, it seems to me just almost like a laziness. And Andrew, you would know better than me, but I think the distinction, right, is that Anthropic is the only AI tool that has direct access to classified material. Or something that nature, do you know,

Andrew Egger (42:01)

that's the nature of the. I mean there are a number of these contracts that are. The number of these AI labs that have contracts with the DoD. Anthropic is the one that has signed these specific contracts to be able to be used in this classified setting. Which basically means they can bring the bot behind the big red line behind the wall. They can train versions of Claude on raw classified data sets. There's a lot of legwork that they have already done in terms of building up specific models that are totally unlike what you or might see if we went to Claude AI, their consumer facing model. I mean the technology that they're licensing to them is the ability to train up their own sort of military bots for military purposes. And obviously there's a lot of that that's opaque, but. So there is a sunk cost here. But you're right. I mean the sunk cost possibility was evident when they signed these pre existing contracts. These are not new standards that Anthropic is trying to now sort of like in a post hoc way impose on the Defense Department. The Defense Department is just realiz. Hey, this is working really well. We wanna like kind of be able to soldier ahead. And the thing you mentioned about sort of the psychology of it from Hegseth's point of view, I think that is such like, to me that's been the hardest thing to kind of wrap my mind around is this is like such a staggeringly large decision that has so many implications for like what the world's gonna look like as these governments and these insanely valuable and powerful AI companies kind of hash out their own relationships with each other. How the government of the world are gonna use the software that still belongs to these companies. Cause all the government is doing is licensing the use of this software. And it's crazy to see all of this stuff basically boil down right now to like a boardroom like mano a mano, kind of like testosterone fight between Amadei and Hegseth, where they're both just kinda standing there watching to see who the other one is gonna blink for. And it's just, I mean, I guess that's ultimately. Sometimes that's just how these things have to play out. I'm not sure it necessarily could have gone another way, but at the same time, I mean you talk to a lot of people in this space who are just mystified by the whole thing because Anthropic has been among the frontier labs, probably the most open to just sort of like strong integration with national security purposes. They have not. Like to your point earlier, Austin, I guess you mentioned it, Mike, they have not been like skittish about the idea that like they would be supplying killer robots to the government. Amadei has basically said, look, we don't think we're in a state right now where we're capable of licensing these things. But like, maybe that's a purpose, maybe that's a useful purpose for like democratic governments to not get outstripped by China in the future. Like we're open to that conversation. And so like the idea that it's happening, not like between the Department of Defense and like some hippie like lab. I don't know which one that would be exactly. Well, you know, anthropic is confusing to a lot of people here.

Mike Pesca (45:02)

A few years ago, and this was during a different time, I think it was workers at Microsoft or maybe it was Amazon who objected to the company and caused a kerfuffle back when the huge companies were listening to their workers about military contracts. But I want to ask you, Andrew, what's your sense of the politics is? I'll give you a multi part question. Take any parts of it. Is Pete Hegseth playing this role?

Andrew Egger (45:26)

Right.

Mike Pesca (45:27)

Would another Trump aligned Defense Secretary, I don't know, Mark Esper or someone who maybe had some experience on Fox and Friends, would he be doing the same thing in the same way? Can a plausible case be made that it is wise to make anthropic give in to your demands because you don't want this powerful company to be able to say no at any point. And then I'll throw something out there which I think there's a track record of Hegseth pumping himself up saying my way or the highway, for instance, to how the press covers him. And then the press walked away and Hegseth didn't win that exchange. So five parts to that question, but take any part of it you want.

Andrew Egger (46:11)

Yeah, I think the last thing you said there is maybe the most important for this particular thing. I think that the thing that is driving this Hegseth is probably not that different from other Defense secretaries in the sense that he wants to protect the prerogatives of the department, to use the technologies at their disposal as they see fit without a lot of external permission structures and red lines. I think basically any Department of Defense, any Secretary of Defense would feel the same about that. The thing that is different is this particular style and this like you say, kind of the my way or the highway ultimatum style negotiating that he is doing. I don't think that Pete Hegseth wants to put anthropological on the supply risk list, their supply chain risk list. I don't think he wants to have to do that. I think he would like for Anthropic, which again is the AI that is already the AI lab that is already most integrated into the Defense Department sort of structures. He would like to just be able to use them. That's what he wants. And for it to have gotten to this point, I think there would be a prudential tack that was the road that he chose not to take, which is to basically say what a lot of the people in this space are saying, which is like, you've already got as pro DOD a contractor as you're likely to get. You happen to have lucked into a situation where that is the frontier lab that also happens to have the model best suited to your purposes at this time. So just like you catch more flies with honey, just continue to do what you can for now and push in the future to get these restrictions dropped as soon as you possibly can. That's not the road that he's chosen to walk with this.

Mike Pesca (47:53)

Yeah, and I've got to wonder, and I wonder if you're wondering about this too, Austin, this negotiation posture of threatening something that you don't actually want to do, that your adversary probably discerns that you don't want to do, taking maximalist public stances all but, you know, saying there is a two week window to do this is very Trumpian. Do you think he's learned the lesson from Trump? Or maybe even more. Moore is doing this in the exact way, not to even get a result, but just to appeal to Trump.

Austin Berg (48:25)

The Trump people, and this is definitely applying to our foreign policy, have a mental model that previous administrations were too tied up by convention, too tied up by polite society, didn't threaten other nations enough, didn't exercise executive power enough when it comes to foreign policy, you know, didn't threaten other nations enough to achieve American ends. And I think that's kind of what you're seeing with this stance from Hegseth here. But to be clear, threatening a foreign adversary and potentially destroying them just because it's not allowing the DoD to unilaterally renegotiate its contract. That is not normal practice. In the words of Scott Alexander from Slate Star code. It is quote, insane Third World bullshit. That is, it is third World dictator behavior to go to companies that you are so lucky to have in your backyard. I can't imagine. Just like more divine providence that at this era of our country, we somehow, out of nothing, out of silicon, out of silica chips and sand, are creating these incredible companies that are going to change the world that any other company, country in the world would kill to have, that we would be treating them this way, even if he doesn't ultimately label them that way. Just, just the threat alone is, is. It hurts. It hurts our country.

Mike Pesca (49:52)

I would say, strategically, there are times to threat, and there are times to cajole, and there are times to do neither. And when your posture is, we always have to threat, you're going to get it wrong. There are instances where the administration has used the threat of force followed by force to actually achieve positive policy and ends. I don't see this one ending like that. All right, let's go to our goat grinders. These are the little things. You call them annoyances. You could call them things that grind your gears or get your goats, because the conversation thus far has been so relentlessly positive. I just want to give a little balancing and a little ballast with a little negativity if we can, in fact, inject some. And I go to you, Austin Berg, do you have a goat grinder for us?

Austin Berg (50:37)

Yes. So it relates to a previous topic we discussed. So I buy a lot of records. Records. And I buy a lot of records from Europe. And if you've ever bought stuff from overseas, you know about this magic thing called the de minimis exemption, and we've had it since the 1930s. And it says purchases under a certain dollar amount.

Andrew Egger (50:56)

It's.

Austin Berg (50:56)

It's wavered, but it's like a few hundred dollars. If you're buying something for less than, you know, $800, say you don't pay tariffs on it. And so when the tariff ruling came down, and by the way, this exemption was eliminated, okay. When Trump took office. So it's been a huge pain in the ass to buy records from Europe, and I've had to pay drug mules, essentially, to get me the records.

Mike Pesca (51:17)

And Trump slipping a 45 up your ass.

Austin Berg (51:19)

Exactly. Yeah. It's a real. It's a huge affordability crisis personally, for me, that I have to do this. Okay, so when the tariff ruling comes out, and I'm very close with the chairman of the Liberty justice center, which brought this case, I was so excited for her, Sarah All Albrecht to win this case. And I selfishly, personally was so excited because, oh, my God, we're going to get de minimis back. All right, so here's the problem. Trump used that emergency authority to set tariffs and that got rolled back by the ruling. Right. He also used the emergency authority, though, to remove the exemption for the de minimis rule. And that's treated differently in the law. So I still have to deal with this thing. And didn't the Supreme Court didn't save me when I thought it would. So I'm still paying like, you know, triple what I should for.

Mike Pesca (52:09)

For records and what kind of records?

Austin Berg (52:12)

It's a lot of African. West African records is what I collect. And a lot of those come from Europe.

Mike Pesca (52:18)

Yeah. The annoyance is De Maximus for Austin Berg. I'll go now. And mine is also related to recorded sound. My co grinder is lav mics. Every social media clip you see, see someone is talking into a little mic, a laugh mike. Sometimes it's sort of fuzzy. And these are not what these mics were invented for. If only lav mics existed, which are the mics you clip on your collar and then you have to take them off to talk on them, causing a lot of friction and hand noise. If someone invented. Well, what if we took the idea of the microphone and built a nice metal shaft around and then you could hold the shaft and it wouldn't cause noise, but then you could talk into the microphone part. That guy would be considered a genius. Or maybe he'd be considered a boomer. Because when I brough this up to a somewhat younger, but not as young as she pretends to be broadcaster, she said to me, you sound like an old person. Like, well, you know how I sound because I'm talking into a good mic with a proper handle to hold that doesn't get in the way of the audio. So laugh mics and just, I'm going to say performative laugh mics. At this point, you can't even not use a laugh mike. They'll drive you off TikTok. They'll call you a boomer. But laughter mics are my go grinder. Andrew, what do you got?

Andrew Egger (53:32)

Honestly, I really struggled to think about something for this segment. I think next time you have me on, I'll have spent the whole intervening period trying to kind of plumb my life for small frustrations. It'll be a lot better. But I have been kind of actually pretty irritated about how bad Twitter has gotten as a way to process anything other than the culture war. I have not been able to fully pull myself off of there. I still get way more of my news and commentary from that website than I really ought to. But it really came home to me over the Olympics just how impossible it is nothing comes up. Nothing bubbles up on Twitter except for conflict. Except for stuff that's designed to make everybody mad at everybody else. We had the most magical run of Olympic. Just usa, let's go. We are the best. We're doing it. We're the chosen ones. Everything's coming up Milhouse for America, for Team usa Like, all through week two of the Olympics. And yet somehow I was only experiencing that dimly. I had to reach through this film of sludge to really be able to appreciate the hockey wins and the figure skating gold and all this stuff. And I was just like, why do I continue to get on this website and let it poison my brain and make me far less gracious and appreciative and positive of a person? But I do. And I guess I still to want. So I wish it were less worse. That's my goat grinder.

Mike Pesca (54:59)

Let me ask you, Andrew, Was the negativity more of the quad God fail variety or the Eileen Goo succeed variety? Cause I am responsible for one of those two things.

Andrew Egger (55:09)

Well, what's weird is you get it all. I mean, like, there's almost every. It's the most negative version of every take. Right. Of the quad God stuff of the. Of the. I don't even remember her name. Goo Wu. Eileen Goo. Yeah, obviously. Well, everyone should. Yeah. I mean, like, come on. Forget her and the hockey teams and the Trump call and Kash Patel being there and different takes about even just sort of sanctimonious takes bubbling up about how I'm mad that everybody isn't just able to appreciate this on the merits. But you're not appreciating on the merits right now. You're mad at those other people who aren't appreciating it on the merits, which is what I'm doing right now. And it's all because we have our brains hooked up to this relentless negativity machine that does nothing for anybody called x.com and I'm sick of it. But like I said, I will still. I will. I'll keep that garbage.

Austin Berg (56:00)

I love the curling drama was so good. And I do think that prior to the gold medal game, Canada should have been banned from all winter Olympic sports and like Russia forced to compete as sort of a stateless people, like the miscellaneous persons of North America or something like that. And that was. I got all my. My curling drama.

Andrew Egger (56:19)

I like that they got karmic justice for that in the. In the hockey finals there at the end. You can have curling. You can have the women's bronze medal in curling.

Mike Pesca (56:27)

Canada. Yeah. No. No way to lose a tooth in curling. Well, you're right, everyone is mad. Which points to the fact that we've really misnamed this show if we were trying to appreciate the zeitgeist. But Austin Berg of the Chicago Policy center, thank you.

Austin Berg (56:41)

Thank you, Mike.

Mike Pesca (56:42)

And Andrew Egger, read him in the bulwark. Thank you, Andrew.

Andrew Egger (56:45)

Andrew, thanks. Very fun.

Mike Pesca (56:47)

Until next time, we are not saying we're right. We're not saying you're right. We are somewhat sadly saying we're not even mad. And that's it for today's show. Corey War is the producer of the Gist Kathleen Sykes. She edits the Gist list. She puts it together, she slaps it up there at Mike Pesca Substack. Jeff Craig edits so much of the show. You know, he's the editor of how to. All those words are chopped together by him. He does our videos as well. Ben Astaire is our booking coordinator and Michelle Pesca oversees it all.

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Mike Pesca (57:24)

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