3541 - The Affordability Argument w/ David Dayen

Summary

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Podcast Summary: The Majority Report with Sam Seder

Episode: 3541 – The Affordability Argument w/ David Dayen
Date: December 9, 2025
Guest: David Dayen (Executive Editor, The American Prospect; co-host, Organized Money podcast)

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Main Theme

In this episode, Sam Seder and his co-hosts welcome David Dayen to discuss the "Affordability Agenda"—a deep dive into the structural factors driving America's cost-of-living crisis. The conversation explores why everyday life feels increasingly unaffordable, the failures of regulation across key sectors, the impact of inequality, and the real drivers behind price hikes, all within the context of both short-term headlines and long-term economic shifts. The latter part of the interview shifts to media consolidation, with a detailed discussion about the impending Netflix–Warner Brothers merger and its implications for consumers and creators.

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Key Discussion Points & Insights

Introduction & Topical News Roundup

[02:12–05:16]

• Sam and Emma run through pressing political news: ACA subsidies, Supreme Court oral arguments on presidential power, Trump's policy moves, Gaza humanitarian concerns, and COVID vaccine data.
• Quote: “The largest COVID-19 study ever shows vaccine lowers death from COVID by 74%... no increase in four-year mortality.” (Sam Seder, [05:07])
• Sets the socio-political backdrop for the affordability conversation.

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The “Affordability” Issue at The American Prospect

[26:28–27:56]

• David Dayen introduces The Prospect's latest print issue focused on affordability.
• Critique that "affordability" has become a meaningless buzzword, used to justify any agenda.
• Quote: “Affordability now has become a word that means nothing… we wanted to look at the long-term drivers of affordability… unless you’re looking at the right part of the problem.” (Dayen, [26:49])

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Energy, Utilities, and Regulatory Capture

[27:58–36:27]

• Discussion on how electricity prices exemplify structural regulatory capture.
  • State public utility commissions (PUCs) are meant to protect consumers but are dominated by industry.
  • Investor-owned utilities get far higher rate increases than public ones.
• Quote: “This system isn’t working… this system of, ‘okay, a private company can own the utility but we’re going to keep it in check,’ isn’t working.” (Dayen, [32:03])
• Sam: Why not take utilities public if monopoly power is inevitable?
• Dayen: Public options (e.g., Tennessee Valley Authority) offer effective models, and more municipalities are pushing for re-municipalization.

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Regulatory Failure Across Sectors

[36:27–40:53]

• Similar regulatory dysfunctions seen in healthcare and higher education.
  • Examples: CMS doesn’t control quality or costs; Dept. of Education doesn’t leverage student loan tools to force college affordability.
• Dayen highlights the infiltration of private equity into utilities as evidence of weak regulation.
• Quote: “Private equity doesn’t go into these things thinking, ‘oh, these must be low-margin businesses that are tightly regulated’… They know they can dominate this regulatory system.” (Dayen, [39:28])

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Other Structural Drivers of Unaffordability

[41:00–49:11]

• Middlemen: Proliferation of intermediaries (like pharmacy benefit managers in healthcare) add costs without value.
• Wage Stagnation: Wages as a share of national income have dropped sharply.
  • If wages had kept pace, American workers would have $79 trillion more over 50 years.
  • Quote: “If wages stayed at the level they were at 50 years ago, the American worker would have $79 trillion more… $3.9 trillion just in the last year studied.” (Dayen, [41:02])
• Rising inequality is fueling demand for “premiumization”—products priced for and marketed to the wealthy, narrowing options and driving even basics out of reach for many.
• Social media, FOMO, and easy-access credit feed a cycle of overspending and price escalation.

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How Inequality and Technology Drive Prices Higher

[44:00–51:04]

• The rich now account for a disproportionate share of spending, pressuring companies to target high-end consumers—at the expense of affordability for everyone else.
• Retailers and suppliers, using fine-grained marketing and AI, manipulate pricing to maximize profit, sometimes personalizing prices.
  • Example: Instacart users buying the same basket of groceries at the same time, from the same location, saw 20% price differences.
• Quote: “Personal characteristics, or even just testing, [lead to] millions of little changes in prices… very, very sophisticated. They are not doing it so they can offer discounts… They are doing it so they can maximize and exploit the amount of earnings they get off every single good.” (Dayen, [49:52])

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The “Tyranny of Aggregates” in Economic Data

[51:39–54:57]

• Traditional economic metrics (e.g., GDP, Black Friday sales) mask the real economic pain experienced by the majority.
• Aggregate stats are increasingly distorted by the outsize consumption of the top 10 percent.
• Quote: “If there are three people in a room and two of them don’t have any money and the other is Bill Gates, the aggregate of that room is very well off, but it neglects the individual circumstances.” (Dayen, [51:43])
• Sam asks whether there are efforts to recalculate economic indicators to reality-check this disconnect; Dayen says the data is there, but it’s rarely framed or presented properly.

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Political Implications and Need for New Metrics

[54:57–56:39]

• Discussion of how this disconnect has repeatedly harmed incumbent politicians and led to "ping ponging" between parties.
• Dayen: For a “durable majority,” politicians need to speak to the actual economic experiences and needs of the public.

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Climate Change and Long-Term Affordability

[57:19–59:12]

• A whole article in the issue focuses on climate change as an unaffordability driver.
  • Crop failures, extreme weather, shifting pathogen patterns increase grocery and living costs.
• Such factors are rarely discussed as cost-of-living issues, though they are pivotal.

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Notable Quotes

• David Dayen on Regulatory Capture:
  “Private equity doesn’t go into these things thinking, ‘oh, these must be low-margin businesses tightly regulated by the government’. They’re going in because they know they can dominate this regulatory system.” ([39:28])

• On Wage Inequality:
  “Wages as a share of national income have gone significantly down over the last 50 years... $79 trillion more if they’d stayed at the same level.” ([41:00])

• On Premiumization and FOMO:
  “We have the FOMO economy… you can buy that in several installments… you can get the things you deserve right now… this access to cheap credit, premiumization and this FOMO economy ends up raising prices over time.” (Dayen, [47:10])

• On “Tyranny of Aggregates”:
  “If there are three people in a room and two of them don’t have any money and the other is Bill Gates, the aggregate of that room is very well off, but it neglects individual circumstance.” (Dayen, [51:43])

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Discussion: Netflix–Warner Brothers Merger & Media Consolidation

[59:59–81:00+]

• The second half pivots to the brewing Netflix–Warner Brothers–Paramount mega-merger.
• Concerns span both market power (price, content restriction, reduction in movies) and power over talent.
  • Mergers reduce the number of buyers for creative work, driving down pay and output.
  • The merger is likely illegal under antitrust law, as recent precedent (Penguin Random House–Simon & Schuster case) showed.
• State Attorneys General, led by high-profile figures like California’s Rob Bonta, could (and should) challenge such mergers even if the federal government is friendly to them.
• Quote: “Netflix’s main competitor gets bought; why would I go with HBO Max as a producer if it might not exist in two years?” (Dayen, [76:23])
• Sam and David agree the deeper problem is the end of legal separation between production and distribution (e.g., loss of Paramount Decrees).

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Notable, Memorable, or Humorous Moments

• Sam’s recap of the “FOMO economy”: “[You’re told that] you deserve the finer things in life, and ultimately this ends up raising prices for all of us.” ([46:14])
• Dayen’s explanation for why "aggregate statistics" are misleading:
  Detailed, clear, and relatable—making the point with the Bill Gates metaphor.
• Discussion about streaming wars/behemoths:
  Lively banter over how the collapse of old models led to a feeding frenzy, with Sam recalling the demise of Peacock’s digital venture.

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Timestamps for Key Segments

• [26:28] – Intro to “Affordability” issue (David Dayen)
• [27:58] – Regulatory capture in utilities & energy
• [36:39] – Other sectors plagued by regulatory failure
• [41:00] – Wage stagnation and inequality as affordability drivers
• [44:00] – Inequality, premiumization, FOMO, and technology
• [49:51] – Dynamic pricing and its impact
• [51:39] – Tyranny of aggregates: How economic stats mislead
• [54:57] – Political fallout from economic mismeasurement
• [57:19] – Climate as a cost-of-living driver
• [59:59] – Discussion on Netflix/Warner Bros/Paramount merger
• [62:57] – Effects of merger on consumers and talent
• [69:36] – Antitrust, state action, and the prospects of a legal challenge

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Conclusion & Where to Find More

• David Dayen: “We don’t have paywalls. We think the value that we produce needs to be accessible… If you believe that information should be free, you can help support us.” ([81:21])
  • Find the issue: prospect.org/subscribe

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This conversation delivers a comprehensive, accessible tour of the real reasons life is getting harder for most Americans—linking healthcare, utilities, education, inequality, regulatory failure, and market manipulation into one narrative—while warning of the dangers of unchecked consolidation in media and beyond.

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For those who want to go deeper, check out The American Prospect’s special issue on affordability, and stay tuned for more from David Dayen and the Organized Money podcast.

Transcript

[Sam Seder]

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I mean now's the time for the show too.

The Majority Report with Sam Cedar. It is Tuesday, December 9th, 2025. My name is Sam Ceder. This is the four time five time award winning.

We are broadcasting live steps from the industrially ravaged Gowanus Canal in the heartland of America, downtown Brooklyn, usa. On the program today, David Dayen, executive editor of the American Prospect, co host of the Organized Money podcast.

On the Affordability Agenda. Also on the program today, Australia bans social media for kids under the age of 16.

Meanwhile, after oral arguments, Republicans on the Supreme Court likely to overturn a 90 year old unanimous decision limiting presidential power.

Speaking of presidential power, Trump passes the buck to Hegseth on the release of the September 2nd boat strike video. Incidentally, they destroyed the October 10th video.

[Emma Vigeland]

That's things that innocent people do of.

[Sam Seder]

Course.

Trump's former personal attorney Alina haba, now former U.S. attorney from New Jersey, Jasmine Crocker enters the Texas Democratic Senate primary versus Talarico, calling Allred to drop out and switch to a congressional race.

Washington Post reports Israel denying doctors entry into Gaza.

Because they don't like it when the doctors come back out and talk about the absolute war crimes that have taken place there.

[Emma Vigeland]

Same reason they've blocked journalists or killed them.

[Sam Seder]

Honduras issues an arrest warrant for its former president and drug kingpin who is just pardoned by Donald Trump.

Announces $11 billion tariff relief. I should say tariff relief. Bailout for farmers suffering at the hands of his tariffs.

Federal judge blocks Trump's cancellation of wind energy permits.

Politico reporting Brad Lander is going to declare his run against Dan Goldman, expecting a Mamdani endorsement.

[Emma Vigeland]

Whoa.

[Sam Seder]

And the largest, largest COVID 19 study ever shows vaccine lowers death.

From COVID by 74%. It drops all cause mortality by 25% and there is no increase in four year mortality. That is a survey of ten tens of millions of people in France. All this and more on today's Majority Report. Welcome, ladies and gentlemen. That was a little bit abrupt, but it is News Day Tuesday.

[Emma Vigeland]

Hello, Sam.

[Sam Seder]

Yep, hello. And here we are. Emma, last night on cnn. I don't know if you saw that.

[Emma Vigeland]

I was, I, I did. I witnessed it. You know, I floated outside my body and watch.

It was good. It was interesting. I haven't done CNN yet. It was my first appearance last night. So I'm a little bit tired because that show goes a little late, but.

[Sam Seder]

That show goes.

Too late.

[Emma Vigeland]

Yeah, but it was fun. I did the full hour and I got to interact with Scott Jennings, which was interesting.

[Sam Seder]

That sounds like a lot of fun.

[David Dayen]

And Nero Tandem and another bozo who.

[Sam Seder]

I've never heard of.

Well before we. I want to play a clip of something that you did on that show that I quite enjoyed and is definitely timely there. The Democrats this week are going to get the vote that they were promised in signing off when Chuck Schumer caved on the Republicans continuing resolution. And this is a sure to fail vote. But it'll put the Republicans on record as voting against the extension of the ACA subsidies. Here's Donald Trump trying to float what is.

Maybe going to be offered by Republicans as a replacement, which is a 1,000 to $2,000 subsidy to Americans under, I think it is like 500% of poverty, one to $2,000 that they can put into an HSA, which is a health savings account that is available only now. If you have a very high deductible insurance program, they're going to allow for more of those. This is a very good thing. If you are 21 years old.

Are not on your parents health insurance.

And you are absolutely sure that you will not need any medical attention for years to come. But outside of that small cohort, it is a complete like it is a one way ticket to more bankruptcies because of health care.

People losing their health insurance, etc. Etc. Here is Donald Trump.

[Donald Trump]

I want to give the money to the people to buy their own health care. That's a good thing, not a bad thing. The Democrats don't want to do that. They want the insurance companies to continue to make a fortune. The Democrats are owned by the insurance companies. They want the insurance companies to get this. Trillions of dollars we spent, we spent trillions of dollars goes to the insurance companies. I want that money to go to the people and let the people go out and buy their own health care. It works like magic. But you know who doesn't want it? The Democrats. Because they're corrupt people. Because they're totally owned and bought by the insurance company.

[Sam Seder]

It's weird that this is, this magic has been around. Incidentally, this is the second term for Donald Trump. They have yet to come up with any type of alternative plan for health care.

This HSA thing is a scam because it is. They will pay the money. It's basically like putting it into a 529. It is good if you. It's gonna be good for some people who are lucky enough that they will go through their life and never need any type of major medical help.

[Emma Vigeland]

Yeah, it's the Democrats that are in the pocket of the health insurance companies. Many of them are, but not as much as the Republicans. It's insane to say that when you also outside of the ACA subsidies piece, you kicked millions and millions of people off of Medicaid. That was also a part of what the Republicans did here. So it's an all out assault on health care. It's not like this is something that the private health insurance companies are crying about.

[Emma Jansen]

And Trump's populism is really thin. He's basically said previously like, look, the health insurance companies are making too much money.

[Sam Seder]

They can still make a little bit.

[Emma Jansen]

Of money, but we don't want to make them so much money.

[Emma Vigeland]

I mean the ACA is insufficient, but part of why these subsidies need to be extended. And this was not when, when that gang of eight Democrats cave. They did not get Assurances on this front is that people still need their health insurance. It's just like their premiums are going to double and many people are just going to opt out of having health insurance altogether because they're not going to be able to afford it. And that means more of a burden on our health care system. Yeah.

[Sam Seder]

Fifteen hundred dollars.

[Emma Vigeland]

Right.

[Sam Seder]

That if they don't spend annually. That if they don't spend. If they don't spend will accrue on the stock market. Assuming that just keeps going up.

[Emma Vigeland]

Right. Anything to funnel more funds into the casino. That is the stock market.

[Sam Seder]

That's. I mean, it's a twofer for them on that end. But all you'll need is, you know, one or two, like a broken arm and all of a sudden that fifteen hundred dollars out the window. Sorry.

Here is Emma Vigland on CNN last night.

[Emma Jansen]

She insisted we play.

[Sam Seder]

Oh, I force us to play.

[Emma Vigeland]

I'm gonna get so red.

[Sam Seder]

She said no more eye contact with her.

[Emma Vigeland]

That's. I mean, no more. I'm not gonna be able to make eye contact with anyone for like a half hour. So I can watch these in private to critique myself. But that's because in private I can go like, stupid idiot.

[Sam Seder]

You should have just said this. We'll turn your mic down. Here is Emma Viglund. And who is this guy you're sitting next to?

[Emma Vigeland]

Oh, he was. Tim. I forgot his last name. I'm sorry. But he was a Republican strategist. I was on with near tandem.

[Sam Seder]

Speaker is absolutely.

[Emma Vigeland]

This guy's the Republican strategist. I was Jeff Flake, former senator, and Scott Jennings. So this is part of that.

[Sam Seder]

This speaker has absolutely passed transformational legislation and is doing absolutely an amazing job on behalf of the American people. So these folks are entitled to their opinion, but the results that are coming out of this House, say, tell a totally different story. Positive. For one second. You could take that, what he just said. It was so general and vague. You could literally put that into any era at any time.

[Emma Vigeland]

Yes.

[Sam Seder]

It doesn't matter necessarily. Republican or a Democratic speaker. And in fact, you could actually put into a million contexts where it's not even referring to the speaker of the House. It's just to a speaker at, let's say, a conference or something.

[David Dayen]

Talking skeleton.

[Sam Seder]

It really is amazing.

There's such thin gruel. I mean, they did pass this massive piece of legislation. And can anybody point to any Republican who is trumpeting the benefits that we got from that legislation?

[Emma Vigeland]

Right. It was a very odd, like defending Mike Johnson's Honor seemed to be what the thrust of this. And like I don't care about that obviously, but it just goes to show a lot of these people, if they're, you're in a Republican circle, you're trying to maintain relationships and I just find it a little odd that that's at the forefront of news commentary.

I would say, yes, the trend, the legislation is transformational and taking millions and millions of people off of their health care. That is exactly what's going to happen.

[Sam Seder]

The ACA was supposed to fix that.

[David Dayen]

The ACA passed before.

[Sam Seder]

Supposed to be the magic pill that fixed everything.

[Emma Vigeland]

That's not said it was a magic. And I'm a believer in Medicare for all. There's 45 million people.

Expanded coverage. That did not solve everything. We need to have a single payer system that can change that. And that's something that I advocate for on my show all the time. So I'm not going to say that the ACA is a panacea. But, but the Republicans right now are not extending the 2021 ACA subsidies, meaning that people's premiums are going to maybe double skyrocket because of the Republican Party right now. So yeah, it's transformational legislation. Yes, it is. You control Congress and you control the White House. So of course it's the Republican Party's fault.

[Sam Seder]

Who wrote the sunset?

[David Dayen]

Who wrote the.

[Emma Vigeland]

Let me finish my point. Let me finish my point. I want to go back to what Marjorie Taylor Greene said. I want to go back to what Marjorie Taylor Greene said about Mike Johnson and about the.

[Sam Seder]

Okay, you move the topic. But here's, I mean this is their point about the sunset provision and this is apparently something that they don't know in Republican circles. Everything sunsets. Everything sunsets. They're going to be voting on the National Defense Authorization act and they're going to be doing that in two or three days because it sunsets. They have the opportunity. And first off, none of them voted for the expansion of those subsidies in the first place.

[Emma Vigeland]

Right.

[Sam Seder]

Never mind the sun setting. They didn't vote for it to happen in the first place.

[Emma Vigeland]

Right.

[Sam Seder]

During COVID And so the idea that they're going to get that by blocking the vote to extend these subsidies that they're not responsible for the sunsetting of it is absurd. And I think they know that.

[Emma Vigeland]

Of course. Of course. But the, you know, it's just a little bit of a game. It's, you know, they've loved trying that.

[Emma Jansen]

Point out since John Fetterman basically like stumbled into granting it to them during the shutdown.

[Emma Vigeland]

And I also just think in these formats too, not to get too meta about it, but it is interesting when you're not just defensive of a democratic policy and you acknowledge that there are improvements and you say something like a single payer healthcare system is the way forward. It's almost disarming because as I was trying alluding to before, a lot of this are people jockeying and trying to tow a line or represent a perspective that's more partisan. And so you can make a much more coherent point when you just are ideologically consistent as opposed to.

[Sam Seder]

Well, for that dude sitting on there. Yeah, he's on there so that he can go to other clients.

[Emma Vigeland]

Yeah.

[Sam Seder]

And he's got a two. There's really two parts of his job. One part is to butter up Mike Johnson so that he can go and take his lobbying clients there. And and then two is to get future clients by saying look how chummy I am on cnn.

But you got in that Emma, good job.

[Emma Vigeland]

Thanks. Thanks. Thanks guys.

[Sam Seder]

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[Emma Vigeland]

Let's.

[Sam Seder]

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[Emma Vigeland]

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[Sam Seder]

Water. That's right, Emma. And that's what a bidet is all.

[Emma Vigeland]

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[Sam Seder]

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[David Dayen]

It.

And live.

[Sam Seder]

We are back. Sam Cedar, Emma Vigland on the Majority Report. What a welcome back to the program. David Dayan, executive editor of the American Prospect, co host of the Organized Money Podcast.

David Dan, welcome back to the program.

[David Dayen]

Thanks for having me.

[Sam Seder]

Let you guys are doing a an affordability.

Issue.

Taking on the affordability issue. Tell us what type of stuff you're covering in that.

[David Dayen]

Yeah. So this is our latest print issue of the Prospect. And.

I think affordability now has become a word that means nothing.

It can really serve as a justification for just about any policy that you already believe in. And so we had the idea of instead of looking at it from the perspective of this is why X is this high, this is why Y is this high, this is why specific items have increased in price or instead of saying Trump has raised prices. And here's why, we wanted to look at the long term drivers of affordability that we've seen over many years and that we are seeing coming into vogue in recent years. And we don't feel like you can actually get at the solutions to the cost of living unless you're looking at the right part of the problem. And so that was that was the goal behind this issue.

[Sam Seder]

Well, let's talk I mean, we can start with the energy, I mean, because that we've seen energy prices go up and a lot of this is being driven by AI or what.

[David Dayen]

Actually that we did something that used utility prices and electricity rates as kind of an avatar, but that was really about regulatory capture. So.

We don't think that it has been well discussed that.

The way that electricity rates are set typically is that each state has a public utility commission that is supposed to act in the interest of ratepayers and only allow a minimal rate of return on the investments that are made in utility infrastructure and basically deliver costs at the lowest cost possible because we don't have 20 wires going into our houses. Right. A monopoly, sort of a natural monopoly. The only way, at least in the conception of the current system where 70% of America gets their electricity from an investor owned utility, from a private company, the only way to keep that company in check because obviously they have this extreme monopoly power. They're the only ones who is sending power to your home so they can raise the price at will. Unless we have this process of these public utility commissions that are supposed to keep rates in check. However, the problem is that these public utility commissions have been captured both in terms of literal capture where.

Lobbyists who used to work on the commission are lobbying for higher rate approvals for specific utilities, but also in the sort of mindshare concept of capture in that the economic models that are used to justify rate increases are ridiculous. And they are used in a way that maximizes the amounts of rate increase an investor owned utility can get. And it really is a problem on the investor owned side. Studies have shown that private utilities ask for and receive much higher rate increases than publicly owned power companies.

[Sam Seder]

I mean, why wouldn't we just have publicly owned. I mean, if it's a natural monopoly, right. I mean, I imagine there may have been a time in the government's history where the government didn't have the money to invest in this, in the building of the infrastructure needed. Although I'm skeptical. But let's just grant that. But that's certainly not now. And if the theory is, is that we know we need to regulate the rate increases and maintain a specific ceiling on profits, although it seems like that the ceilings of profits don't really go, that's more theoretical than in. We could also say like okay, we're just going to buy this from you one time. We're going to build in whatever the profits that theoretically you're supposed to get. And we'll, we'll, we'll buy you out and then we'll just have the government run it. Because it seems like the government's having to do just about all of this anyways. We'll contract out to you maybe the, some of the, the work and that's it.

[David Dayen]

I mean, all you have to do to look at the fact that this system isn't working is to look at the stock prices of these major private utilities. I mean this is an industry that is supposed to have to go hat in hand to the government when it can increase its rates. And it's supposed to be allowed this rate increase under a very strict formula. So that is not the makings of a superstar stock. Right. I mean that, that's not a company that's going to be earning wild profits.

[Sam Seder]

Right. That's not, we don't have 100x potential on this.

[David Dayen]

Theoretically it's a tightly regulated utility. It's it's a, it's a, you know, and, and yet you look at the stock rates of these private companies and they are earning well in excess, many multiples in excess, their stock rate is higher than what their projected earnings would be. What that shows is that this system of, okay, a private company can own the utility, but we're going to keep it in check with this Public Utility Commission. It isn't working. It was set up, this kind of regulatory structure was set up by the investor owned utilities themselves. I mean that's originally when they started buying out public power companies. They said, oh, okay, well you'll help keep us in check by putting in place this regulatory structure. And it's clearly not working. And so yes, in that piece we talk about many campaigns across the country that are attempting to essentially move these private companies back into the public sphere. And we've seen this in many areas of the country. Ann Arbor, Michigan is going to have a vote on this next year. Maine had a vote In I believe 2022.

A vote which failed, I should say. And then other municipalities led by DSA's Power of the People program, are attempting to un, privatize, I would say, these investor owned utilities.

[Sam Seder]

Is there an opportunity for the federal government to do this? I mean, because one of the problems is we don't have really a cohesive and maybe not even coherent national.

Power grid. And it feels like we are going to need one, particularly if we're going to.

Pursue.

Energy sources that are renewable. And you know, it would be nice to be able to like, we have a lot of wind in this part of the country and it can generate more electricity than we need. We can send some of that down to another part of the country.

[David Dayen]

Well, I really think these are the right questions to be asked. And you know, it's one thing to sort of say, hey, electricity rates are going up and we need to freeze those rates for a temporary period of time or we need to, you know, reduce the use of data centers. And maybe there's a good reason for that.

It's better to look at, okay, why is this a problem? Like why are these electricity rates going up? And what does it say about other facets of the economy where these instances of regulatory capture exist? And so instead of saying here's what we need to do on electricity, I think the better question is to say, well, in areas where there is clearly a disconnect between the regulatory system and the reality, we need to dismantle that regulatory system and figure out another way to deliver this good or service. And it could be public provision. Certainly the Tennessee Valley Authority, which was established in the 1930s to electrify rural America, has operated in such a way as a public power generation system that has been very beneficial to the millions of customers that it serves. And we can look to that as a model going forward.

[Sam Seder]

Where else do we see regulatory capture.

Create runaway prices or in affordability.

[David Dayen]

Unaffordability.

[Sam Seder]

Unaffordability.

[David Dayen]

I think it would be un. So certainly you look at the healthcare system. I mean, we have a regulatory.

Structure that is woefully unequipped to deal with the large private interests that are dominating American health care. The center for Medicare and Medicaid Services does little to no quality control on the various things that it oversees. So, you know, I mean, just go down the line. I think look at the Department of Education and how it's been unable to keep higher education costs down, even though it has tools to say that, okay, you're only going to be able to participate in the student loan system if you keep down your bloated administrative costs or whatever other cost bloat is in the system. I mean, I think that the failure of these regulatory structures calls into question why we should continue with them.

[Sam Seder]

There's two dynamics, right, when we talk about these failures. One is, like you said with the Department of Education, it is a failure to use the sort of like to condition the carrots, right? Because it's a carrot to higher education institutions that the federal government is facilitating loans. So if we're going to do that, aside from like my issues with us profiting off of those loans, but essentially, if we're going to subsidize the universities in this way, we should get a return on that investment that we're making, which is you can't. If you're. If you're spending too much on capital improvements because you want to have a nicer dining hall, we're no longer going. You're not going to be accredited under some, you know, accreditation, rubric, affordability, credit, accreditation. You're not going to be available to participate in our loan program. That's the carrot side, right? And the stick side is supposedly, I guess on the, on something more like the electoral. The electrical grid is where we're supposedly constraining what these companies are doing. But that seems like a sort of a snow job. I mean, it sort of just reminds me the dynamic of like, we're gonna buy your electric company but you'll still get to constrain us is sort of like the debate I have with my son where it's like, oh, get me an iPhone and I promise you can limit my use of apps. And then all of a sudden it's just like off to the races within six months. You're just like, I can't keep up.

[David Dayen]

Yeah. I mean, I think everything you need to know about the inadequacy of the regulatory system as it relates to electricity is in the fact that private equity firms are now moving headlong to buying utility companies. So in Minnesota we saw BlackRock's infrastructure arm purchase Elite, which owns, it's sort of a consortium that owns several utilities in Minnesota and I believe also Wisconsin. We have a story coming tomorrow about Blackstone, the world's largest private equity firm attempting to buy a public power company in New Mexico. There are smaller private equity firms that are trying to buy the biggest gas company in New Mexico.

Private equity doesn't go into these things thinking, oh, these must be low margin businesses that are tightly regulated by the federal government. That sounds like a good business for me to earn my oversized returns. I'm definitely going to go into there. They're going in because they know they can dominate this regulatory system and they can earn these outsized returns that they're investors want.

[Sam Seder]

Outside of the either regulatory capture or just regulatory failure.

What else would you say is the premier driver of unaffordability?

[David Dayen]

We tackled it from a number of different angles. We did a piece on middlemen that have been inserting themselves into various transactions in the economy everywhere from real estate to healthcare in a big way. So example being pharmacy benefit managers which get sit in the middle of pharmacies, health plans and drug companies and as it turns out take a bunch of profit off the top for themselves and make drug prices higher. So that's an example middlemen. We did another story on wages. I mean low wages is one of the reasons why people can't afford everything. There was a great Rand Incident Institute study that showed that wages as a share of national income have gone significantly down over the last 50 years. And if they stayed at the level they were at 50 years ago, the American people, the American worker would have 79 trillion more dollars than they did under the current circumstances. And that includes $3 trillion just in the last year studied, which I believe was 20, 23, $3.9 trillion more just if wages stayed at the level they were at in 1975.

[Sam Seder]

Just I want to make this a little bit more explicit for people so they understand that is when we talk about wealth inequality, that's what we're talking about because the economy is still generating this wealth. It's just a question of how it's being distributed.

[David Dayen]

Right?

[Sam Seder]

And in 1975, it was distributed far more broadly when the economy made $100, you know, 95 of it went to the people, and $5 maybe went to the top 5% or 10% or I should say, you know, the top 1%.

[David Dayen]

Sometimes we talk about this in terms of the wage productivity gap. So productivity is sort of a measure of how much the economy is producing at any one time. And for decades, that tracked right along with wages in a very tight.

Separation between one another. And that started to break off in the late 1970s. And ever since, productivity has kind of soared while wages have stagnated. And that, that leads to this huge gap that we're talking about.

[Sam Seder]

We got this gap right here. And. And I think, but again, it's important somebody got that money right? Like the delta between the light blue line and the dark blue line. The light blue line is wages. The dark blue line is the amount of money that's being generated. Somebody got that money. It just wasn't workers.

[David Dayen]

Wasn't you? Wasn't me. And that actually leads to what I think is one of the most interesting pieces that's in the series, and it's about how inequality drives unaffordability. So you say that, you know, somebody got that money, and those people that got that money are spending it at higher rates and at more pronounced rates than the people who don't have barely enough money to gain basic necessities. Sometimes what this is called is a plutonomy, which is kind of a portmanteau of plutocracy and economy. That was something that was coined 20 years ago by bank of America in a research note. And they advised companies, well, look, the rich are doing all the spending, so you should cater, you should target your prices, and you should target the services that you provide to the rich. And we have seen studies since more recently that say that the top 10% of income earners are doing up to 50% of the consumer spending. And so this leads to a concept in marketing called premiumization. So instead of a hairdryer costing 15 bucks, there's a premium Dyson hair dryer that comes in different colors and apparently dries your hair better. I guess. I've heard about this thing costs much, much, much more than just a basic hair dryer. And the problem is that the rest of us who aren't rich aren't immune to. To those marketing.

Considerations. And so we see the same ads, we feel the same premiumization that goes on in the economy.

And it interacts with social media in a way where.

Influencers and people who are trying to sell products like that, they present kind of a depiction of the economy where you deserve the finer things in life.

And ultimately this ends up raising prices where we're paying more for things that we're told are premium. Whether they are or not, we're told that they are premium products, whereas we would have settled for something different years ago.

[Sam Seder]

And isn't there also a dynamic, though, that.

[David Dayen]

The.

[Sam Seder]

In the market? I mean, it doesn't obviously, maybe not so much in the hair dryer market, although I would imagine, like, look, if I have a store and I have one product that is going to make me a 20% markup, you know, the premium hair dryer, I'm going to give that shelf space. So I'm going to limit the options for ones that may be less. They may not serve the same purposes.

[David Dayen]

It might be the only thing you sell.

[Sam Seder]

It might be the only thing I sell. Because why am I going to. I'm paying the people to stock with a discount.

[Emma Vigeland]

Good.

[David Dayen]

If most of the spending is happening at the very top. And so that limits access to other people. And this interacts as well. This is a really great, really complex piece by Emma Jansen. This interacts as well with the access to cheap credit that we have. So we have kind of this FOMO economy, right, where you see all these experiences and you feel like, hey, I want, I work for a living. I want to be able to experience some of these finer things. And the way I can do it is because there's a buy now, pay later thing that tells you, oh, don't worry, you can buy that in several installments and you can pay it off over time and you don't have to worry about it. You can get what you want, you can get the things that you deserve right now. And you put this all together, this access to cheap credit, this premiumization, and then this sort of social media marketing in this FOMO economy, and it ends up raising prices over time.

And constraining the cost of living.

[Sam Seder]

And doesn't it do that also, I would imagine, in areas with the real estate market? Because if you have somebody who's coming in, you know, I'm going to compete against this other person to, to buy this house or rent this apartment, and there's just basically a race to the top. And then you can fill. It creates this sort of like a vacuum. You can slowly creep Up. I mean, it seems like it creates upward pressure on prices.

[David Dayen]

Yeah, I think that is the case. And then that interacts with the piece that I actually did for this issue, which was about technology as a driver of this affordability crisis. And companies have gotten much more sophisticated about individual personal desires, personal needs.

Your shopping patterns, when you buy things, why you buy things. And they are exploiting that through the use of big data, through the use of machine learning, through the use of AI. We had a piece that just came out. I wasn't involved with this, but Groundwork Collaborative, which we partnered with in the past, just did a story today that was also in the New York Times and dealt with, I think Consumer Reports was involved, where they got 20 people to shop for the exact same goods at the exact same time from the exact same location on Instacart. And the prices varied by up to 20%.

[Sam Seder]

Wow.

[David Dayen]

So basically personal characteristics, or even not personal characteristics, and just a bunch of testing is done, millions of changes, little changes in prices to test what does well and what doesn't and how we can maximize that willingness to pay. This level of pricing is not just about supply and demand anymore. It's become very, very sophisticated. And they're not doing it so they can offer discounts to everybody. They are doing it so that they can maximize and exploit the amount of earnings that they can get off every single good that they sell.

[Sam Seder]

The other thing, I just want to turn back to one moment about the sort of, the inequality and, and how it drives prices up. But also, do you think that this is why.

There has been a real inability to assess how.

The American public is experiencing the economy? So, for instance.

Black Friday, record number of dollars spent.

[David Dayen]

Right.

[Sam Seder]

Not record number of goods bought. And if we know, if we apply what we know about the top 10% buying, 50% of the stuff, it suggests that, like, we look at these top line economic numbers that have always, you know, we've always relied on to get a sense of how the economy is doing, but it's really only telling us how the economy is for a very narrow band of Americans, that the rest of Americans are sort of left out of the economy in many respects.

[David Dayen]

I sometimes call this the tyranny of aggregates.

And this has been, you know, how many presidencies in a row have been taken down by this where they say, look at the aggregate economy. Consumer spending's good, unemployment's low, et cetera, et cetera. And yet a large majority of people or a large segment of people feel like they're not Getting ahead. And when you aggregate the economy, you know, the old joke is that if there are three people in a room and two of them don't have any money and the other is Bill Gates, the aggregate of that room is very well off, but it neglects the individual circumstances that are involved. So I think that we have a problem with this often and it does tend to mask what is actually happening to certain groups of people.

[Sam Seder]

How do we fix that? I mean, how do we fix now? I mean, like, how do we fix that specific dilemma? Because, I mean, I remember, you know, back when there was going to be a peace dividend, when Clinton, Bill Clinton came in, back in, like 92, 93, you could read a bunch of think pieces about how we were going to recalculate. I think they called it the GNP then, not gdp. How are we going to recalculate the GNP to include the opportunity costs that may be associated with economic activity or the externalized costs that might be associated with economic activity? Somebody breaks into my apartment and steals my TV and bust my door, the. The GNP goes up at that time, but there's no accounting for the fact that, like, maybe my productivity goes down because I get to miss a day of work, or maybe I am just bummed out and. Or maybe we, you know, to replace the wood table that got busted, we got to cut down another tree and it adds to global warming or whatnot. Like, and that went by the wayside. Is there even a movement now to look at other economic indicators that give us a better sense of, oh, wait a second, 70% of the population is sort of suffering here as opposed to it looking like everything's rosy.

[David Dayen]

I mean, I think there are a lot of ways to measure an economy. You can look at distributional analysis instead of just, you know, is the line going up? You can look at what different deciles, what is happening to the bottom 10%, what's happening in the bottom 50%, what's happening the bottom 90%. A lot of that information is there. Like, we measure it. Like, I wouldn't have that statistic for you about the top 10% doing 50% of the spending if that information wasn't available. The question is, how is it presented? And so, you know, I think every, from a political standpoint, every administration is going to try to present that information in the best light for them, but it is incumbent upon the rest of the media and commentators.

[Sam Seder]

Well, the media's not going to do it. The media's not going to do it because they're all like, they're completely incentivized.

[David Dayen]

To do the opposite. Just told you about it?

[Sam Seder]

Well, no, but I'm saying, I'm saying the mass commercial media, I mean with all due respect to you and to, and to me, you know, like we're going to turn on cable news, they're not going to be talking about it very much because that's just not the business they're in. Certainly not going to happen on the business channels.

It seems to me that there has to be, we need to hear about it either more from politicians or there needs to be, I don't know, think tanks. Look, but I don't know who's going to start this.

[David Dayen]

How many times does this disconnect have to happen before the political system writ broadly and I'm talking not just about politicians and think tanks and policymakers, but also media, I think gets put into that equation. How many times.

Do we have to have this conversation? How many presidencies can be taken down by this disconnect between aggregate statistics and the realities for large segments of people on the ground? How many times does this have to happen before things change so they can continue to operate along the same lines that they always have and the public will continue to be angry and they'll ping pong back and forth between the parties and throw everybody out every couple years.

If you want a durable majority, you need to speak to those needs in the ways that I think the more successful candidates this year did.

[Sam Seder]

Yeah, I mean, you know, it, it seems like, and maybe, maybe we're sliding into a different era. But I still remember like this sort of the major talking point about our health care system was princes and kings come here to get their surgery and like that, that, you know, like that's we got the best in the world. That's why princes and kings come from everywhere. But it, you know, like maybe it's starting to occur to people that like only princes and kings can really afford the good healthcare and everybody else gets screwed is not necessarily the flex you think it is.

[David Dayen]

Right.

I agree. I mean I'm trying to think of the other big piece that we had in the issue. Looks at a topic that is woefully, I think neglected in the course of all of this in terms of a long term driver of affordability problems and that's climate change. We have stopped thinking in the terms of the cost of inaction. But it's not just extreme weather patterns that knock out infrastructure and that then has to be rebuilt. But it's changing Weather patterns that change the nature of crop yield, for example. I mean, one of the things we're talking about the most in terms of affordability is groceries, right? Well, you know, coffee prices were at an all time high before the tariffs, and they were that way because of the changes in where you can actually grow coffee, which is migrating away from the traditional growing regions. The expansion of pathogens in a hotter climate environment has been a major factor in cattle thinning of cattle herds. It's been a major factor in wiping out a lot of the orange groves in Florida and a number of other problems. Literally, you look like every week there is some different pathogen, whether it's bird flu or there's some different. Because of a drought or because of an extreme weather pattern or flooding. There's some wipeout of crops somewhere around the world that produces 50%, 70% of the world's product of that particular good. We don't talk about this at all. And yet it is the definite factor in.

The increasing lack of affordability of groceries.

[Sam Seder]

I want to turn to what's going on with Netflix, but we just. I just got a question.

Steve Austin asks Sam, please ask David Dayen where one could pick up a copy of the December affordability issue if they currently don't have a subscription just yet.

[David Dayen]

That would be at prospect.org donate or slash subscribe. And you go there and go get all of our issues. We put out six a year, and we usually throw that in with a monthly donation. So it's probably.

[Sam Seder]

You can get the archives, right? I mean, you can access the archives.

[David Dayen]

Back issues, you can access whatever we got. Yeah.

[Sam Seder]

All right, let's turn to the Netflix Warner Brothers Paramount deal that's happening. You and I met in show business. I don't know if you remember.

[David Dayen]

I wouldn't call it that, but okay.

[Sam Seder]

Student film.

[David Dayen]

But it was more show than business.

[Sam Seder]

It was. It was. Wasn't so much business, but it was definitely. It wasn't. You know, it wasn't even that much show. But. But be that as it may.

What are your thoughts on. On this act? I mean, outside of. This is more media consolidation. People don't seem to be as worried about it because it doesn't necessarily involve news. But, I mean, come on, this is.

[Emma Vigeland]

I mean, theaters could completely close around the country. I don't know.

[David Dayen]

Yeah, these are. I mean, if you're talking about Netflix or whether you're talking about Paramount, these are both illegal mergers. And this real kind of poverty of imagination.

Has led people to believe they have to choose between One of them or the other that, oh, right, Paramount.

[Sam Seder]

Is horrible because we got it like a full on right winger who is literally using his money to dictate like is installed Barry Weiss into cbs.

[Emma Vigeland]

They just hired a promoted Tony Dokipol, by the way, the guy that said the thing about the ta, Nehisi Coates and the backpack of a terrorist.

[Sam Seder]

But you know, she's like interviewing Erica Kirk on a town hall type of situation. I mean, that is. And so people are like, I'm glad it's not Paramount. But even still, I mean, I mean.

[David Dayen]

The two things, it's not like there's this binary setup, there's this sort of conceit that there is because the idea is that, oh, the Trump administration is going to put their thumb on the scale for Paramount over Netflix and we're going to have to endure all of this. And that's really just a very improper and incomplete way of looking at this. Now we can talk about why these deals both have very similar impacts both on consumers and on producers and talent in Hollywood. So Netflix is the number one streaming company in the world. HBO Max, which is part of Warner Brothers, is the number four company in the world. Number three is some Indian streamer that isn't available in the United States. So you're talking about number one and number three combining. And we have seen Netflix, I believe, has raised prices on its streaming product over the last five years by about 120%. So if you liked that, expect more of it. If they're combining the number one and number three streamers in the United States.

[Sam Seder]

States, it would be insane to think that they are not that this is going to in any way expand offerings to us. Right? I mean, it would be, they claim.

[David Dayen]

That they're going to keep HBO Max going, but in the very next sentence of the announcement, they say, and Netflix subscribers will get the benefit of all of the library of HBO and Warner Brothers material.

[Sam Seder]

So in that case, I'm going to definitely have both services. I'm going to definitely pay for both services. Why wouldn't I?

[David Dayen]

It's insane. So, and not only that, but as Emma correctly said, if you, you know, Netflix is famous for limiting theatrical windows, for bringing things directly to streaming, that lack of offering at the box office has already, we've seen in this consolidation era had a definitive impact on how many screens basically are financially viable. When Disney bought Fox assets, we already saw this sort of take place. And it's very likely whether it's Paramount and Warner Brothers combining one studio or whether it's Netflix and Warner Brothers. And Netflix.

Given their past history, influencing the theatrical windows, you're going to see, yeah, potentially the death of movie theaters in the United States.

And then you.

[Sam Seder]

And to be clear, it is, you know, because this was predicted, the death of movie theaters were predicted when VHS tapes came out. And it's not because we're talking about an introduction of a new technology. We're talking about an inability to actually get movies to fill those theaters.

[David Dayen]

Fewer movies. Right. So if Netflix and Warner Brothers, if Netflix and Warner Brothers are the same company, it is highly unlikely that the same amount of movies will be made out of Netflix and Warner Brothers. It just is. And.

The same thing goes for if Netflix, Warner Brothers and Paramount are the same company, it's just very unlikely that you would see the same amount of output. And if there's a limit to the number of films, particularly the number of films that people are going to want to see, which is already a problem in the US Then you know, that's going to have a material impact on theater owners. That's why theater owners have opposed this deal. The other people that have opposed this deal are everyone who works in Hollywood, the Writers Guild, the Director's Guild, the Screen Actors Guild. And that's because if you're taking, you have a project, whether it's a film or a television series, and you have a number of bidders for that project, if there are fewer bidders, if Netflix and Warner Brothers were two of the bidders and now they're one, you're not going to get as much money for that product and there's just not going.

[Sam Seder]

To be as much production, period. Because why would one entity make as much?

Exactly. Right.

[Emma Vigeland]

Well, it's all just, just I wanted to ask just really quickly though. I mean, the first of all, Netflix, I think they do seven day theatrical releases in terms of like the awards consideration and that I would imagine they're gonna lobby to basically have that be nothing.

[David Dayen]

So that they're promising that they would be the same theatrical windows at Warner Brothers that they are currently. But I don't know why we should believe that.

[Emma Vigeland]

Why would we believe them? I mean, and so that's gonna really harm movie theaters. But, but even like when we back up to just how this even got going, you have the Ellison Nepo baby that, that is in charge of Skydance and was across this merger with cbs who just was like bloviating and just was like, yeah, I'm going to, I'm going to acquire, I'm going to acquire Warner Brothers that got Netflix into the. The bidding war. And they were like, hey, we have a better offer. And now they're coming back Skydance, Paramount with another offer with Jared Kushner in tow. He's helping finance it.

[David Dayen]

To be clear, the Paramount tender offer they made for this hostile bid is the same offer that they made at the end of the process that Warner Brothers board rejected. They're basically saying, okay, the board rejected it. We'll take it to the shareholders and we'll let the shareholders decide. And it isn't only Jared Kushner's involvement here, but. But Paramount a couple months ago hired Makin Delrahim, who is the, in the first Trump term, was the head of their antitrust division of the Justice Department. So there were a number of sort of MAGA World figures that were involved with Paramount. And Paramount's entire strategy has been, we're the ones that can get Trump to sign off on this and nobody else can. And so that was sort of their ace in the hole. The problem with that and the problem with this whole binary that gets set up like, oh, I'm relieved that Netflix is going to buy Warner Brothers and not, you know, I'm relieved that this one illegal merger and not this other illegal merger is that state attorneys general have the authority to use the Clayton act, use the Sherman act to challenge mergers. And it's very clear to me that they will in this case, no matter who tries to buy Warner Brothers discovery. Rob Bonte is the Attorney General of California. He has been talking about maybe running for governor of California.

An entire ecosystem in Hollywood is against this deal. Why would he not? And they'd be against the Paramount deal as well, because of the same dynamics. Why would he not challenge this merger in court, especially when there are ample precedents? I mean, this looks a lot like the merger that was proposed between Simon and Schuster and Random House Penguin a few years ago during the Biden administration. And Biden administration challenged that, saying that authors would get smaller advances if there are fewer bidders in the marketplace. The exact same dynamic as Hollywood talent getting fewer bidders in the marketplace and getting lower amounts for their productions. And they won that case.

Pretty resoundingly in court. And that precedent can be used by any attorney general where Netflix and HBO Max is played. So any Attorney General in the United States can use that precedent and say, this is the same kind of thing. It's going to create a monopoly or towards a monopoly in streaming or in studio production, and we're going to challenge it. And it doesn't matter what the Trump administration does. This is at the state level. It doesn't matter that the Trump administration may put its thumb on the scale. We don't have to accept the best that the Trump administration will give us in this case. And I think that's a very important mindset to get out of because I'm seeing a lot of commentary of people like, well, we can't let it go to the Ellisons because that'll be MAGA Inc.

This binary that gets set up, that we have to choose the lesser of two evils, is untrue. Warner Brothers is a very successful business. It is the number one box office winner this year. If you saw the Golden Globe nominations yesterday, the two big films in that were Sinners and One Battle After Another, both from Warner Brothers. There is no reason why this business can't be managed successfully by independently. And any attempt by another company that's a competitor to merge with it is presumptively illegal.

[Emma Vigeland]

I understand that. Right. And I'm hopeful that what you're saying wins the day in court. But is there something to what we're seeing right now, this overall dynamic where it seems like under Biden, of course, we've talked at length about greedflation and these companies getting away with, with taking home these record returns with higher prices. And then you add Lina Khan and more aggressive actual antitrust enforcement. There was major pushback against her. Then we have Trump. And it feels like all of these companies are racing, understanding the illegality of their actions. To get this in right now, in case of, in 2028, a Democrat coming in and tripling down on this strategy. And I don't really see many reasons for them to. To be dissuaded because the administration is on board.

[David Dayen]

They 100% are. And that's why we have to be loud about this. I mean, I haven't seen a lot of California elected officials outside of Ro Khanna talk about why this Netflix merger is bad and it's an illegal merger, and that is a form of cowardice. Democrats who are in control of attorney generals offices all over the country have.

[Sam Seder]

Theoretically we could have a suit where there is 15 attorney generals joining into this suit.

[David Dayen]

And, you know, there is definitely a merger rush happening right now. Wall street is very happy with how they can basically engage in pay to play corruption and get whatever they want out of this administration. And in a lot of the smaller cases, they probably will be able to do that. I mean, state attorneys general are constrained to a certain degree by the bandwidth that they have they aren't the U.S. justice Department. They can't challenge every case, but this one is very high profile and it affects hundreds of millions of people in the United States who are subscribers to HBO Max or subscribers to Netflix. And some of these, you're not gonna get past the goalie.

[Sam Seder]

And.

[David Dayen]

If state attorneys generals think they can sort of keep their powder dry and hope for the best from the Trump administration on this, they are sadly, sadly mistaken. And they need to get involved in the game here.

[Sam Seder]

That would be impressive if someone was that completely oblivious as to what's going on. All right, last question on this.

What Netflix is talking about is buying the. Largely like the, the non cable side, I guess, right?

[David Dayen]

Yes. Yeah. They want streaming services. Warner Brothers Studios, HBO and HBO Max. And then the cable companies will be separated off, much like what Comcast did with MSM cable companies.

[Sam Seder]

So they theoretically be their own entity.

[David Dayen]

That would be spun off into a separate entity.

[Sam Seder]

Yeah, whatever it's called, you know, like, like whatever the choice, what is it?

[David Dayen]

Versant on your former employer at msnbc.

[Sam Seder]

Who knows? But the, but would that be subject to a potential.

Hostile bid?

[David Dayen]

That's a spin off. So I mean, you know, they could kind of do whatever they want with it. But this is actually a larger question here, which is why are we, why would we be at all confident that a company made up of cable networks would survive in 2025?

[Sam Seder]

Well, whatever Versant is, I don't think so. I mean, I can tell you that.

[David Dayen]

Like if I know better on the Discovery Global Network side, which is, I believe, what it would be called, our.

[Sam Seder]

Partner, Kalshee, our part, our Kalshee partner has on the big board. It'll be scrolling along here. You can bet on how long Ms. Now is going to be around. There's a reason why they call it now and not tomorrow.

[David Dayen]

If you Watch cable in 2025, you won't know what year it is. There's like, there's nothing on there that's current. It's just a wasteland of reruns. And cable television is likely to go away. Built up in all of this is this real disruption in how we consume broadcasted information and entertainment. We are moving inexorably to streaming. The question is who's going to dominate that space? Netflix is making their play. One of the things about this is that Netflix wins, even if this gets mired and caught up in legal challenges. Because for the next year and a half there is going to be this question as to whether or not Netflix is going to be able to purchase Warner Brothers, HBO Max, its main competitor or one of its main competitors or not. And so if you're a producer and you have two bids for your television show, and one is Netflix and the other is HBO Max, which one are.

[Sam Seder]

You going to go to? You're going to go to Netflix.

[David Dayen]

Of course, the larger problem here, and I know you've thought about this a lot because it came up way back in the day when Al Franken was challenging.

[Sam Seder]

Well, this is what I was going to say. This is. The other thing is like, is this Bill Clinton's fault? The Telecommunications act of 96?

[David Dayen]

It's the fault of a couple things. It's the fault of the end of the Paramount decrees, which was actually during Trump's first term. What we're seeing is an end of the separation between production and distribution. Yeah, FinCEN. And also the Paramount decrees. So the Paramount decrees in the 1940s said, if you're a theater owner, you can't also be the production company anymore. And that's how it was prior to the Paramount decrees. And the television equivalent of that is Vincennes, which is that different production companies have to be involved with different production television networks. And we're now moving towards a reality where Netflix owns its productions and therefore can dictate the prices that it pays for those productions. And it also has the distribution output, and so it can favor its own content. If this merger goes through, you won't see any Warner Brothers Pictures on other streaming companies.

[Emma Vigeland]

Right.

[David Dayen]

Because they'll all be on Netflix or.

[Sam Seder]

In a theater, because that theater is also competing. Like, they're just like, why should we. Why should we diminish what we can make on our streaming service for ourselves?

[David Dayen]

And this is exactly what the Paramount decrees and these other structures were set up to stop because it trended towards sort of a monopolization on, in this case, entertainment. But you can also see it related to information. And so, you know, if you're talking about what's the real answer here, it's not just this sort of uneasy status quo. So maybe there's, you know, what if there's another buyer for Warner Brothers and it keeps it independent, we maintain this competition between Warner Brothers and Netflix and Paramount. That's not the full answer here. The full answer is to set up, once again, a separation, a structural separation between production and distribution in a way that preserves the ability for frontline talent to recoup the value that they produce. Nobody goes to movies for the executives. Nobody goes to movies to see who.

[Sam Seder]

Produces can we also just say that this is about literally a couple of guys? Zaslav is one of them. I've heard he's just a lunatic to work for who have turned their companies into basically a cottage industry in the sense that, like our old timey notion of, like a corporation and company, man. And I'm doing this for the sake of the company and the future of the company and my workers and blah, blah, blah. These are just guys who perceive these entire operations as a financial instrument in the same way that they would buy a stock and, you know, they don't have any emotional attachment to it. It's like if, you know it's going to.

[David Dayen]

I'll give you two things on that. David Zaslav stands to get a $500 million payday if the Netflix Warner Brothers merger goes through. So that's number one. What do you think he's rooting for? Number two, Warner Brothers would be an absolutely profitable company, especially if they shed their. Their zombie cable networks and move those off to the side. But the only reason that it isn't, it has massive debt from all of these other failed mergers that it did.

[Sam Seder]

Yes.

[David Dayen]

The merger with Time Warner that then failed. The merger with AT&T that then failed. The merger then with Discovery that is in the process of failing.

[Sam Seder]

And when they spin off these cable companies, they give them the debt. You guys own the liabilities, right? That's what happens.

[David Dayen]

So, yeah, I mean, the only reason that this company is not as viable as it should be, with a lot of success, both at the HBO level and the Warner Brothers level, is this legacy debt from failed mergers. So the answer to that is to do another merger.

It's just madness.

[Sam Seder]

David, Dan, always a pleasure. Folks should head over if they get a. If you subscribe to the Prospect now, you get access to the archives. And so if you haven't seen this.

[David Dayen]

Affordability, even if you don't, you get access to the archive.

I know I'm a bad marketer, but. But here's my point.

[Sam Seder]

We don't have making $500 million and you're sitting here letting people off the hook.

[David Dayen]

Here's my point. We don't have paywalls. We don't. We think information should be free. And we think that the value that we produce needs to be accessible. And we ask our.

People who support us to help us keep that free. And so it's more of a fundamental kind of philosophy that we have, have that we believe that this information, stories about ideas, politics and power should be available to everybody. And, you know, if you believe in that, if you think that that's an important value to you, then you can help support us and keep that a reality.

[Sam Seder]

So you're a red diaper baby, essentially. Is that what's going on here? This is all full on communism that is breaking out over there.

[David Dayen]

That's right. That's why we're the great stable organization that we are.

[Sam Seder]

There you go. David Dayne, honestly, how many years has it been since you've been executive editor?

[David Dayen]

Six and a half.

[Sam Seder]

Really?

[David Dayen]

Yeah.

[Sam Seder]

Holy cow. It has been amazing what you've done with that magazine. And very important.

[David Dayen]

And we're going to have a Netflix show, too, on Organized Money pretty soon, probably next week, so you can check that out as well.

[Sam Seder]

Netflix show.

[David Dayen]

Oh, no, no.

[Sam Seder]

That was coming out.

[David Dayen]

We're gonna do a show about Netflix.

[Sam Seder]

Yeah. Can you imagine after all that? Like, that would be hilarious. After all that.

[David Dayen]

After all that. Yeah, we're. Netflix called us. They said, you know, you guys are. You guys are doing some fun stuff. No, we're gonna do a show about. About the Netflix Mer potential. Mer so.

[Sam Seder]

Well, well, that I was very excited to watch you on Netflix, but maybe another time.

[David Dayen]

I can. I can I still access the Peacock archives of you, by the way.

[Sam Seder]

Dude, let me tell you something. You couldn't even see the show when we were on Peacock. Like, that was the problem. I tried to explain to them, you're not on the. You know, we could. We could talk for about another 20 minutes about how all of these entities spent billions with a B in setting up streaming plays without any clue as to what they were doing or where they were going to make money from it. And it's why they. They pushed that writer strike, because they need to get out of deals and they need to backfill all of this debt they had created. They. We weren't. That's not even the Internet. Like, it was just. Don't. Don't get me started. David. Dan.

Will put a link obviously to prospect.org thank you so much.

[David Dayen]

I appreciate it.

[Emma Vigeland]

Thank you.

[Sam Seder]

All right, we're gonna take a quick break and head into the fun half of the program, wherein we will have fun and go over more clips of Emma because she's been so consistent. We play all the. Like, we're gonna do. Do the whole hour. We got to do the whole hour.

[Emma Jansen]

Let's just take it from the top.

[Emma Vigeland]

We should include the part where I completely forgot Scott Jennings name. Then call. Call him Jeff, because Jeff Flake was.

[Sam Seder]

Sitting next to me. That looks Like a Jeff.

[Emma Vigeland]

It was going into break and then I was like for a minute in the break. Like what is his name? What is his name? What is his name? And it's Scott Jennings. Not that Jeff Flake.

[Sam Seder]

You know what, honestly, that is a power move to go on television and call somebody by their.

[Emma Vigeland]

That's what my husband texted me.

[Sam Seder]

Accidental.

Power move. Total. You just call him Bill.

[Emma Vigeland]

Yeah, yeah.

[Sam Seder]

It's Kevin over there said and just watch the look on his face. Like what Kevin?

It's hard for him to scowl any harder than he was already scowling before you. Right in his face.

[Emma Vigeland]

He's mugging folks.

[Sam Seder]

Remember, it's your support that keeps this show keeping on can become a member @join the majorityreport.com when you do you only get the free show free of commercials. You get access to the fun half and you can im us.

[Emma Vigeland]

Yes.

[Sam Seder]

Also just coffee.co op. It's their end of the year sale. 30% off. You don't even need to use the coupon code Majority though it doesn't hurt for you to put it in there because I think they see that in their logs. But just coffee co op, they got all sorts of coffee. Now is the time for you to check it out. Store up. If you've never tried just coffee, now is the time to do it. This is the time of year you get 30% off. If there's a different flavor you wanted to try, now is the time to do it. You get 30% off. If you've never had the majority report blend, now is the time to do it. Just coffee.co op. The dot co op is because it's a co op.

[Emma Jansen]

Matt left reckoning after the show today at 2:30 Eastern Time. David Griscomen. I'll be talking about this Senate primary in Texas where Colin Allred drops out and Jasmine Crockett jumps in and Talrico still there and none have really done a whole lot of substance yet. And we also talk about this Netflix slash Paramount slash Warner Brothers deal where I suggest that maybe we should go back to copyright terms that allow us to like keep this stuff as assets indefinitely. Because the whole reason we we've kept expanding this copyright beyond like what it is in the Constitution, which is like a lot shorter than 75 years plus the age of the author, whatever it is now is so like Mark Twain's family. Could it have like not be poor?

[Emma Vigeland]

Right?

[Emma Jansen]

And it wasn't so like the Saudis could buy like the Maltese Falcon. I think all this stuff if it should either be property of, like, the unions and the people who produce it. Or it should be public domain. It shouldn't be a plaything for these, you know, psycho billionaires. But check that out after the show today.

[Sam Seder]

100%.

PBD and J. Brad Lander. The primary. Dan Goldman. Yes, we headlined that. Yes, folks, come on. See you in the fun half.

[Emma Vigeland]

Keep up.

[Sam Seder]

See you in the fun half.

Three months from now, six months from now, nine months from now. And I don't think it's going to be the same as it looks like in six months from now. And I don't know if it's necessarily going to be better six months from now than it is three months from now. But I think around 18 months out, we're gonna look back and go like, wow.

What? What is that going on? It's nuts. Wait a second. Hold on. Hold on for a second.

Emma, welcome to the program. Fun hack.

[David Dayen]

Matt.

[Sam Seder]

Fun hack. What is up, everyone? Fun hack. No M. Key.

[David Dayen]

You did it.

[Sam Seder]

Fun crack.

[Emma Vigeland]

Let's go, Brandon.

[Sam Seder]

Let's go, Brandon.

Bradley, you want to say hello? Sorry to disappoint everyone. I'm just a random guy. It's all the boys today.

[Emma Vigeland]

Fundamentally false. No. I'm sorry.

[David Dayen]

Women.

[Sam Seder]

Stop talking for a second and let me finish.

[David Dayen]

Where is this coming from?

[Emma Vigeland]

Dude?

[Sam Seder]

But. Dude, you want to smoke this seminary?

[Emma Vigeland]

Yes.

[David Dayen]

Hi.

[Sam Seder]

Me?

[David Dayen]

Is this me?

[Sam Seder]

Yes.

[Donald Trump]

Is this me?

[Emma Vigeland]

Is it me?

[Sam Seder]

It is you?

Is this me?

[David Dayen]

Hello?

[Sam Seder]

Is this me? I think it is you. Who is you?

No sound. Every single freaking day. What's on your mind?

[David Dayen]

We can discuss free markets and we can discuss capitalism.

[Sam Seder]

I'm gonna go Skyline Libertarians. They're so stupid. Though common sense says of course.

[Emma Vigeland]

Gobbledygook.

[Sam Seder]

We nailed him.

[Emma Vigeland]

So what's 79 plus 21?

[Sam Seder]

Challenge.

[David Dayen]

Man, I'm positively quivering.

[Sam Seder]

I believe.

[David Dayen]

96.

[Sam Seder]

I want to say. 8572-1035-5011-0389, 11.

[David Dayen]

For instance.

[Emma Vigeland]

$3,400. 1900. 5, 4.

[Sam Seder]

$3 trillion. Sold. It's a zero sum game.

[Emma Vigeland]

Actually. You're making me think less of.

[Sam Seder]

Wait. But let me say this.

You can call it satire.

[David Dayen]

Sam goes satire. On top of it all. My favorite part about you is just.

[Emma Vigeland]

Like every day, all day, like everything you do.

[Sam Seder]

Without a doubt. Hey, buddy. We see you.

All right. Folks. From folks.

[Emma Jansen]

Folks.

[Emma Vigeland]

It's just the week being weeded out. Obviously.

[David Dayen]

Yeah.

[Sam Seder]

Sun's out, guns out.

I. I don't know.

[Emma Vigeland]

But you should know.

[David Dayen]

People just don't.

[Sam Seder]

Like to entertain ideas anymore. I have a question. Who cares?

[David Dayen]

Our chat is enabled, folks.

[Sam Seder]

I love it.

[Emma Vigeland]

I do love that.

[Sam Seder]

Gotta jump. Gotta be quick. I gotta jump.

[David Dayen]

I'm losing it, bro.

[Sam Seder]

Two o', clock, we're already late and the guy's being a dick. So screw him.

Sent to a gulag.

[Emma Vigeland]

Outrageous.

[Sam Seder]

Like, what is wrong with you? Love you. Bye. Love you. Bye. Bye.