Latest / Breaking Points with Krystal and Saagar / 5/14/26: JD Gaslights On Trump Not Caring About US Finances, US Test Scores Plummet, Tucker Humiliates Kevin O'Leary

Transcript

5/14/26: JD Gaslights On Trump Not Caring About US Finances, US Test Scores Plummet, Tucker Humiliates Kevin O'Leary · Breaking Points with Krystal and Saagar

0:00
Speaker 1: Hey, guys, Saga and Crystal here.
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0:33
Speaker 2: Let's turn to how things are going domestically in the
0:36
Speaker 2: US as Trump is at his big meeting in China.
0:39
Speaker 2: So you'll recall yesterday we covered Trump getting asked whether
0:42
Speaker 2: he considers American's financial situations when thinking about the Iran war,
0:46
Speaker 2: and he said, no, I don't think about that at all. Well,
0:49
Speaker 2: yesterday Vice President Jadie Vance got asked about those compents
0:53
Speaker 2: and just straight up was oh, I don't think he
0:54
Speaker 2: said that at all.
0:55
Speaker 3: Let's take a listen.
0:57
Speaker 4: When approaching the war with Iran, do you agree with
1:00
Speaker 4: the president's position that Americans' financial situations should not be
1:05
Speaker 4: a consideration in that decision making process.
1:07
Speaker 5: Well, I don't think the President said that. I think
1:10
Speaker 5: that's a misrepresentation of what the President said. But look,
1:12
Speaker 5: I agree with the President that Iran should not have
1:14
Speaker 5: a nuclear weapon. We're obviously engaged in a very aggressive
1:18
Speaker 5: and very engaged diplomatic process to try to ensure that
1:21
Speaker 5: that doesn't happen, and the President has a lot of options.
1:24
Speaker 2: So he thinks that was misrepresented. He doesn't think the
1:26
Speaker 2: president said that. Just as a reminder, here are the
1:29
Speaker 2: president's own words.
1:30
Speaker 1: When are denotiating with Iran.
1:32
Speaker 3: With the President, what extent are marakat financial thing making motivating.
1:36
Speaker 1: You to make it deal?
1:38
Speaker 6: Not even a little bit.
1:39
Speaker 5: The only thing that matters is when I'm talking about Iran,
1:43
Speaker 5: they can't have a nuclear weapon.
1:44
Speaker 6: I don't think about American financial situation.
1:48
Speaker 7: I don't think about anybody.
1:49
Speaker 6: I think about one thing. We could not let Iran
1:53
Speaker 6: have a nuclear weapon.
1:54
Speaker 3: That's all.
1:55
Speaker 6: That's the only thing about it.
1:57
Speaker 2: There's ale quote literally, I don't sayin about Americans financial
2:01
Speaker 2: situation saga yeh.
2:03
Speaker 1: I mean, at a certain point, what do you even
2:05
Speaker 1: do you just deny that it ever happened. I guess
2:07
Speaker 1: it took apparently.
2:10
Speaker 2: Got good, yeah good, and Vans having to just like
2:13
Speaker 2: lie about him. I don't think that's what he said.
2:15
Speaker 2: Just shows you what a devastating quote it ultimately was.
2:18
Speaker 2: So let's take a look at americans financial situation, shall we.
2:21
Speaker 2: We got another very hot inflation reading. Let's put s
2:25
Speaker 2: three up on the screen. This was wholesale prices that
2:29
Speaker 2: jumped in April.
2:30
Speaker 3: From the New York Times.
2:31
Speaker 2: They say prices rose at their fastest rate in four years,
2:35
Speaker 2: the latest sign that the war with Iran is taking
2:37
Speaker 2: a toll on the US economy. The Producer Price Index,
2:40
Speaker 2: a measure of the cost that businesses pay for goods
2:43
Speaker 2: and services, rose one point four percent in April and
2:46
Speaker 2: was up six percent from a year earlier. You can
2:49
Speaker 2: see the spike there, guys on that chart, and it's
2:52
Speaker 2: very clear what that is attributable to. That is attributable
2:55
Speaker 2: to a war of choice in Iran that this president
2:58
Speaker 2: decided to start at urging a Benjamin Net Yahoo. That
3:02
Speaker 2: is why these prices are going up. They go on
3:04
Speaker 2: to say. The news came one day after the government
3:06
Speaker 2: reported the better known consumer price index rose three point
3:09
Speaker 2: eight percent in April from a year earlier, the fastest
3:12
Speaker 2: pace of inflation in nearly three years. Producer index typically
3:16
Speaker 2: gets less attention than the consumer index, but economists watch
3:20
Speaker 2: the measure closely, especially during periods of global disruption, because
3:24
Speaker 2: it gives an early look at how costs are filtering
3:26
Speaker 2: through the supply chain. So these are wholesale prices. This
3:30
Speaker 2: is what businesses will be paying. Do you think that
3:33
Speaker 2: they're going to just absorb those costs and decrease their
3:37
Speaker 2: profit margins.
3:38
Speaker 3: Of course they're not.
3:39
Speaker 2: They're going to pass those costs onto you and very
3:43
Speaker 2: likely then some. In addition, because we hear them on
3:46
Speaker 2: their earnings call Sager, we saw this play on during
3:49
Speaker 2: COVID where they were bragging to their investors about, hey,
3:52
Speaker 2: because of inflation, we're able to raise our prices above
3:55
Speaker 2: and beyond even what are increases in costs are. Which
3:58
Speaker 2: is why corporate profit margins have continued to go up
4:01
Speaker 2: and up and up, no matter what the inflation numbers
4:04
Speaker 2: are doing and whether their actual costs have risen at
4:07
Speaker 2: the same pace.
4:08
Speaker 1: Yeah, exactly, and actually initially what they had seen in
4:11
Speaker 1: the last time that this happened from last month, the
4:13
Speaker 1: BLS said that PPI rose only zero point five percent
4:16
Speaker 1: in March, which they said at the time was an
4:19
Speaker 1: encouraging sign that the energy price shock was not setting
4:22
Speaker 1: off a broader inflationary spiral. However, after two months, they
4:26
Speaker 1: say that optimism is now called into question. The increase
4:28
Speaker 1: in March was revised up, and April's gain was triple
4:32
Speaker 1: what forecasters had expected. Energy prices jumped by seven point
4:36
Speaker 1: eight percent in April after rising ten point one percent
4:40
Speaker 1: in March, and the price increases were not limited to energy.
4:43
Speaker 1: KeyPoint core producer prices energy and other volatile categories were
4:47
Speaker 1: up four to five percent from the year before, suggests
4:50
Speaker 1: that the oil procet shock, as well as the tariffs,
4:53
Speaker 1: is working through the supply chain. I will just challenge
4:56
Speaker 1: anybody in the world to tell me that a seventeen
4:59
Speaker 1: percent increase in energy he is not going to show
5:00
Speaker 1: up in a bill somewhere. I mean, be real, like,
5:04
Speaker 1: you know, just take a look at credit card debt,
5:07
Speaker 1: at all of the other consumer you know, goods that
5:11
Speaker 1: are beginning to price. Honestly, I still don't even think
5:14
Speaker 1: that we've begun began to see really any of it,
5:16
Speaker 1: because right now the increase, it's only been two months.
5:21
Speaker 1: It's only at the gas pump and with diesel, there
5:24
Speaker 1: are contracts being booked out six months from now. There
5:29
Speaker 1: are hotels that people haven't booked yet for August or
5:33
Speaker 1: for September. There is some there's some guy out there,
5:37
Speaker 1: maybe me, who's supposed to have done a rental car,
5:39
Speaker 1: who hasn't done it yet. Like you know, there are
5:41
Speaker 1: a lot of like there are guys like that, who
5:43
Speaker 1: is it's been on his task list from his wife
5:45
Speaker 1: for over six months and he's just going to push
5:48
Speaker 1: it to the end. There's a guy out there again,
5:50
Speaker 1: maybe me, who is going to be paying probably triple
5:53
Speaker 1: for what he was supposed to have paid if he
5:55
Speaker 1: had just done it whenever he was told. But that
5:57
Speaker 1: is one of those which is just going to continue
6:00
Speaker 1: to ripple out. I think through the economy where their
6:03
Speaker 1: sticker shock at these things is just so crazy. I
6:07
Speaker 1: was just talking to my parents because they flew back
6:08
Speaker 1: from India and they're saying, if you want to avoid
6:10
Speaker 1: the Middle East, like right now, the price, the going
6:13
Speaker 1: rate for an economy seat is literally what people were
6:17
Speaker 1: paying for business like a year ago. Just again, if
6:20
Speaker 1: you want to take the risk of, oh, I don't know,
6:22
Speaker 1: getting shot by a drone on your approach to Dubai
6:25
Speaker 1: International Airport. That's the reality of just like basic international
6:30
Speaker 1: travel plus jet fuel, grocery price. I just think, really,
6:34
Speaker 1: it has not even begun to show up.
6:36
Speaker 2: Let's go forward to see six, just to show you
6:39
Speaker 2: the level of stress that the American consumer is already under.
6:43
Speaker 2: So this is credit card delinquencies ninety days plus delinquent.
6:49
Speaker 2: The numbers here have skyrocketed. And this is not just
6:53
Speaker 2: around war and gas prices. This has been for the
6:57
Speaker 2: past two years. Those numbers have been going up, up
7:00
Speaker 2: and up. And you can see mortgage delinquencies there at
7:03
Speaker 2: the bottom, ninety plus days delinquent.
7:06
Speaker 3: Those are edging up as well.
7:08
Speaker 2: These are dire warnings for signs that the American consumer
7:13
Speaker 2: is tapped down. This means they are using credit cards
7:16
Speaker 2: to sustain their lifestyle, perhaps even just sustain their ability
7:20
Speaker 2: to pay bills at the end of the month, and
7:23
Speaker 2: they are running out of runway because now they're not
7:25
Speaker 2: able to even pay those credit card minimums at the
7:29
Speaker 2: end of the month. So this is a very poor
7:32
Speaker 2: sign for the US econi economy. Inspite if was it
7:34
Speaker 2: Kevin Hassett that went on and was bragging about like, oh,
7:37
Speaker 2: credit card spendings up, as if that was somehow a
7:40
Speaker 2: good thing. Again, it's a good thing, I guess if
7:42
Speaker 2: you are one of those credit card issuers. But for
7:44
Speaker 2: ordinary people this is obviously a disaster and shows just
7:49
Speaker 2: how stretched people are and the ends they're having to
7:52
Speaker 2: resort to in order just to keep it together. So
7:55
Speaker 2: while unemployment continues to be relatively low, we did the
7:59
Speaker 2: last hiring report was relatively good. It was over one
8:02
Speaker 2: hundred thousand jobs that were added. You see these incredible
8:06
Speaker 2: signs of stress throughout the economy.
8:08
Speaker 3: And you also just see.
8:09
Speaker 2: Logically the way that the growth sectors in the economy,
8:12
Speaker 2: which is largely like AI and I guess gambling, do
8:16
Speaker 2: not benefit and in fact they are predatory and exploitative
8:19
Speaker 2: of the American public. You add on top of that
8:22
Speaker 2: the negative impacts increase in inflation, increase in gas prices
8:27
Speaker 2: on the American consumer because of the Iran War, and
8:29
Speaker 2: it's a very bad looking picture.
8:31
Speaker 1: Yeah, I mean, look, the credit card stress one, I
8:33
Speaker 1: don't know, it's hard to say. We've said, we've covered
8:35
Speaker 1: it now for five years. It's one of those where
8:38
Speaker 1: I think a lot of people often have a modal
8:41
Speaker 1: outcome of like two thousand and eight, like one big moment.
8:44
Speaker 1: I don't really think that that's what's happening here. I
8:46
Speaker 1: think what's happened is what's reflecting in our politics, and
8:49
Speaker 1: then the general happiness and feeling levels. It just gets
8:52
Speaker 1: worse every year. It's nobody's breaking. No, there's no great
8:57
Speaker 1: Kumbaya moment where everyone's like, oh, it's all fake, this
9:00
Speaker 1: entire thing, because that's very cathartic. And instead it's just
9:02
Speaker 1: year after year after year gets more expensive, the house
9:06
Speaker 1: price goes up, the mortgage rate. It's like this slow grinding,
9:10
Speaker 1: you know, thing that where you can just look back
9:13
Speaker 1: over the period of your life and say, oh, wow,
9:16
Speaker 1: it's actually a lot worse. It's really shocking whenever you
9:19
Speaker 1: confront it, you know, from a I think I've talked
9:21
Speaker 1: about I always talk about my McDonald's stories because that
9:23
Speaker 1: genuinely is like a five year difference between like wait what,
9:28
Speaker 1: And I'm sure everybody has felt that at some point.
9:31
Speaker 1: People coffee, I know you're not a coffee person. I
9:34
Speaker 1: buy a specialty coffee. The price increase is so insane.
9:38
Speaker 1: It's up one hundred percent, literally one hundred percent. I
9:41
Speaker 1: was looking at my old orders for what we would
9:43
Speaker 1: pay the stuff that we drink here in the studio
9:45
Speaker 1: compared to what it was. I was like, I can't
9:47
Speaker 1: believe this now, granted is already specialty or whatever. But
9:50
Speaker 1: then I looked at the wholesale price and I was like, oh,
9:52
Speaker 1: so this is actually reflective of the whole market. It's
9:56
Speaker 1: But the thing is, if you experience it daily, then
9:58
Speaker 1: the five percent or whatever a cumulative inflation year over year,
10:02
Speaker 1: you get conditioned slightly to it. But it's only when
10:04
Speaker 1: you look back at the long increase of twenty one
10:07
Speaker 1: twenty two percent that you're like, wow, I really have
10:11
Speaker 1: materially become way worse off in terms of what I'm spending. Yeah.
10:16
Speaker 2: Yeah, one more thing here, t C five that was
10:21
Speaker 2: flying around yesterday. Chicago Border trade wheat and Casey wheat
10:26
Speaker 2: futures climbed by their daily trading limits on Tuesday after
10:29
Speaker 2: the US Department of Agriculture projected the nation's harvest will
10:32
Speaker 2: dropped the lowest.
10:33
Speaker 3: Level since nineteen seventy two.
10:35
Speaker 2: Now, I think a lot of people saw this and
10:37
Speaker 2: assume this is because of the Iran War. Those effects
10:40
Speaker 2: from the Iran War, those are the ones we're still
10:42
Speaker 2: waved on that will come in the next harvest. Okay,
10:45
Speaker 2: when fertilizer was so expensive that we're already having farmers
10:48
Speaker 2: farmer bankruptcies have been accelerating. We're already having farmers saying
10:51
Speaker 2: we can't afford to fully plan our crop. That is
10:54
Speaker 2: all in our future. This is a warning sign of
10:57
Speaker 2: what is to come though, because this is because there
10:59
Speaker 2: was a stating drought and very strange like weather patterns
11:04
Speaker 2: last planting season.
11:06
Speaker 3: This is wheat that's sewn in the.
11:08
Speaker 2: Fall and then you know, now is when it should
11:11
Speaker 2: be harvested, and there was massive problems because of this
11:14
Speaker 2: drought and then unseasonably warm weather in certain parts of
11:17
Speaker 2: the country that screwed up this crop for a lot
11:20
Speaker 2: of farmers. Again, this is you know, very likely fallout
11:22
Speaker 2: from a climate crisis. You know that has been exacerbated
11:26
Speaker 2: over the years and is something we can continue to
11:29
Speaker 2: expect in the future, but definitely not because of the
11:31
Speaker 2: climate crisis.
11:32
Speaker 3: This time.
11:32
Speaker 2: We can expect for sure we're going to have problems
11:34
Speaker 2: because of the issues with fertilizer and the increased cost
11:37
Speaker 2: there for farmers.
11:38
Speaker 1: So in general, low harvest means what you know, limited
11:42
Speaker 1: amount of supply, which means.
11:43
Speaker 2: Higher crisis price, and it means in poor countries famine.
11:47
Speaker 1: Famine, fertilizer, oil, credit card. I don't think. I don't
11:53
Speaker 1: think anything is yet at a so called breaking point
11:55
Speaker 1: or anything. I do think if we get to six
11:58
Speaker 1: seven dollars a gallon that we will, and I'm still
12:01
Speaker 1: not far off. I mean, nothing has happened. It's absolutely
12:05
Speaker 1: nothing has happened. How much is gas up? Let me
12:07
Speaker 1: take a look, Yeah, four fifty three. It was four
12:09
Speaker 1: to fifty two yesterday, so it just you know, give
12:12
Speaker 1: it a week. Every week it goes up by six percent,
12:15
Speaker 1: seven percent. Gas is six fourteen a gallon in California,
12:19
Speaker 1: it'll probably be seven. I think I saw that. In
12:22
Speaker 1: Los Angeles it's around six fifty almost seven dollars a gallon.
12:26
Speaker 1: Very not uncommon to see eight dollars diesel or any
12:28
Speaker 1: of these things. The national average of diesel today is
12:31
Speaker 1: five sixty six gallon, and the all time high is
12:35
Speaker 1: five eighty one. So give it what a week and
12:38
Speaker 1: we'll probably be there. Or another bombing or something like
12:41
Speaker 1: that to happen. I don't know. All right, let's get
12:44
Speaker 1: to test scores. Turning now to test scores. This is
12:50
Speaker 1: a really depressing investigation from the New York Times, with
12:54
Speaker 1: a lot of data behind it. I encourage you not
12:56
Speaker 1: only to go read it for yourselves, but there's a
12:58
Speaker 1: tool where all of you can go and look at
13:00
Speaker 1: your individual school district and see what is almost certainly
13:04
Speaker 1: a ten year decline in the test scores for children
13:07
Speaker 1: for math and reading. So let's go to put this
13:09
Speaker 1: up here on the screen. They say, why test scores
13:12
Speaker 1: are in a generational long decline, And in general, what
13:16
Speaker 1: they see is that across America, whether you're rich, whether
13:20
Speaker 1: you're poor, whether you're black, whether you're white, whether you're Hispanic,
13:25
Speaker 1: whether they've done this program, whether they've done that program,
13:28
Speaker 1: students are performing worse than their peers ten years ago.
13:33
Speaker 1: District level data, which was released by the Educational Opportunity
13:37
Speaker 1: Project at Stanford reveals that compared with a decade earlier,
13:41
Speaker 1: reading scores were down last year in eighty three percent
13:44
Speaker 1: of school districts where data was available. Math scores were
13:47
Speaker 1: also down in seventy percent. The declines have affected rich
13:51
Speaker 1: and poor, and cross racial and geographic device. The new
13:55
Speaker 1: data provides the first national comparison of school districts through
13:58
Speaker 1: twenty twenty five and shows a detailed picture of individual
14:01
Speaker 1: school districts have performed over time. From twenty seventeen to
14:04
Speaker 1: twenty nineteen, students lost as much ground in reading as
14:08
Speaker 1: they did during the pandemic. Reading scores continued to fall
14:12
Speaker 1: at a similar rate through twenty twenty four. Immediately after
14:16
Speaker 1: the pandemic, there was hope that students would recover quickly.
14:20
Speaker 1: New data shows that scores have upward in reading last
14:23
Speaker 1: year and have climbed more steadily in math since twenty
14:26
Speaker 1: twenty two, but it has been nowhere near enough to
14:29
Speaker 1: make up for lost grounds. So, in other words, the
14:32
Speaker 1: decline began in twenty seventeen if you look on this
14:34
Speaker 1: long timescale. However, it got exacerbated but way worse by COVID.
14:40
Speaker 1: Then there's been a modest uptick, but it's still lower
14:43
Speaker 1: than where we are in twenty seventeen. And I think
14:45
Speaker 1: that's what you know. And the funny thing is is
14:48
Speaker 1: when everybody starts to look at like, oh, what is it.
14:50
Speaker 1: Here's the thing about the education system, And I see
14:52
Speaker 1: a lot of conservatives like the whole education system is corrupt.
14:55
Speaker 1: You think the education system is corrupt in Utah because
14:58
Speaker 1: school district are now in Utah. Okay, math and reading
15:00
Speaker 1: is down in Utah. Education is one of the last
15:03
Speaker 1: bastions of localism that we have here in the United States.
15:06
Speaker 1: If you, as a citizen want to have an impact,
15:08
Speaker 1: as we saw during all the CRT debates, you actually can,
15:11
Speaker 1: like you actually can have an impact on your school
15:13
Speaker 1: district if you want to as a parent. That's what
15:15
Speaker 1: property taxes are for, by the way, and one of
15:19
Speaker 1: the reasons you pay them is because you have an
15:21
Speaker 1: investment actually in it. Yes, even if you're childless boomer
15:25
Speaker 1: or if your children are no longer in the education system.
15:29
Speaker 1: But the point that you see here the whole nation,
15:32
Speaker 1: it's one of the most decentralized systems in the world.
15:34
Speaker 1: Right every school has funked by their local school board
15:39
Speaker 1: and the state. There's been all of the I mean,
15:42
Speaker 1: how many pilot programs have there been, right of charter
15:45
Speaker 1: schools in this school and that's magnet schools in New
15:49
Speaker 1: York City does something this way, in California does something
15:52
Speaker 1: that way. At the end of the day, the test
15:54
Speaker 1: score is gone down, which means only one thing. It's
15:58
Speaker 1: cultural almost certainly, and it's technology. I just I do
16:02
Speaker 1: not see a way out of it. And let me
16:04
Speaker 1: just put my cards up here at the front. Technology
16:07
Speaker 1: alone in the school is not going to save you, because,
16:09
Speaker 1: as they point out, they've still continued to see declines
16:12
Speaker 1: even in schools where they have had phone bands, because
16:16
Speaker 1: it's not just about the phone. We were talking earlier
16:18
Speaker 1: about chromebook and you were telling me about how your kids'
16:20
Speaker 1: school like they issue them all chromebooks. All the homework
16:23
Speaker 1: has to be done on chromebook. Yeah, I think that's
16:25
Speaker 1: got to go. Honestly, at this point, I even think
16:27
Speaker 1: the overhead projector's got to come back. No power points,
16:29
Speaker 1: nothing paper homework period, because I mean, you read these
16:33
Speaker 1: stories the Wall Street Journal chromebooks and somehow, you know,
16:36
Speaker 1: there's some whiz kid as we all used to do
16:38
Speaker 1: with land on our computers. This is twenty years ago,
16:41
Speaker 1: you know, to play Halo or whatever. People will always
16:44
Speaker 1: figure it out. Some mother discovers that her son's been
16:46
Speaker 1: watching seven thousand hours of YouTube two years on his
16:49
Speaker 1: school issued seven thousand hours of YouTube on his school
16:53
Speaker 1: issued chromebook. That's an extreme example, but I'm just giving
16:56
Speaker 1: one of what it is. The fact is is that
16:58
Speaker 1: the mass distraction in college because remember this is this
17:02
Speaker 1: is also being found in college universities. Is we're seeing
17:06
Speaker 1: it now across the entire United States. And that's why,
17:10
Speaker 1: you know, a lot of conservatives were, oh, it's being woke.
17:13
Speaker 1: I'm like again, like you literally like it's in Florida,
17:16
Speaker 1: two guys, it's in Utah. It's the whole nation. It's
17:20
Speaker 1: a much more it's a much bigger problem. Like you
17:23
Speaker 1: can have those individual debates, but I don't know, I
17:26
Speaker 1: see no other evidence, like it's just.
17:28
Speaker 2: Technology, and there are I think, if memory serves, I
17:32
Speaker 2: could go back and look at the chart. There were
17:33
Speaker 2: three places that defied the trend.
17:36
Speaker 1: One of them was DC and Mississippi.
17:37
Speaker 2: Mississippi was another, and I think Hawaii was the third,
17:40
Speaker 2: which shows you to your point, those are very different
17:43
Speaker 2: places ideologically, you know, so this isn't really a liberal
17:47
Speaker 2: versus conservative thing, and we should all be looking at
17:49
Speaker 2: Mississippi and d C.
17:51
Speaker 1: Part of what I hate to say is, yeah, Mississippi
17:52
Speaker 1: and DC, we're so shitty that being modestly increases, Like
17:55
Speaker 1: so let's be on look no disrespect, but it's true DC.
17:58
Speaker 1: I remember they did that.
17:59
Speaker 3: Will be Hawaii. It's great shakes either.
18:00
Speaker 1: Remember the documentary about DC schools, how awful they were
18:03
Speaker 1: with that eight What was that woman?
18:05
Speaker 3: Oh yeah, yeah, gosh, I forgot too. She came in,
18:09
Speaker 3: she was a big charter school whatever.
18:11
Speaker 2: Anyway, I know part of what they did in DC
18:14
Speaker 2: is there's this very it's very controversial, like the way
18:17
Speaker 2: to teach kids to read, even though there's a very
18:20
Speaker 2: clear science based analysis that teaching phonics is the way
18:25
Speaker 2: to go, and like doing it in a you know,
18:27
Speaker 2: rather than the site reading ways that you know, people
18:30
Speaker 2: used to do whatever. Anyway, so DC really fully implemented
18:33
Speaker 2: that and that seems to have worked for them.
18:35
Speaker 7: Well.
18:35
Speaker 3: But to your.
18:36
Speaker 2: Point about this is obviously a national issue, it's obviously
18:39
Speaker 2: a cultural issue. I don't really know that I would
18:42
Speaker 2: penance so much on the chromebooks in the school.
18:45
Speaker 3: I think it's more about.
18:46
Speaker 2: Culturally, Like people they they don't read books, right, They
18:51
Speaker 2: instead they're on their screens.
18:53
Speaker 3: That's a big shift, you know.
18:54
Speaker 2: Another one that people don't talk about is another thing
18:57
Speaker 2: that screen time replaced is board games. Now, board games
19:01
Speaker 2: are very good in terms of math skills, like just
19:04
Speaker 2: very basic I have to roll the dice and I
19:06
Speaker 2: have to add them together and know how many places
19:08
Speaker 2: to move and be able to count that out, and
19:10
Speaker 2: or you know, dealing with money if you're playing Monopoly
19:13
Speaker 2: and these sorts of things. This is something that one
19:15
Speaker 2: of one of my children's teachers told me. She was like,
19:18
Speaker 2: you know, older towards retirement. She said, one of the
19:20
Speaker 2: big differences she notices is kids coming into kindergarten they
19:24
Speaker 2: don't have that basic numeracy because they're not playing card games,
19:28
Speaker 2: they're not playing board games.
19:30
Speaker 3: So that's another one.
19:31
Speaker 2: I mean, this is just you know, the screens take
19:33
Speaker 2: up everything, and so that means that other activities that
19:38
Speaker 2: were more educational and helped to develop brains more effectively
19:42
Speaker 2: are pushed out to the side. And the other thing
19:45
Speaker 2: that this data shows you is that whether you looked
19:48
Speaker 2: at families where they were like go wild with the screens,
19:52
Speaker 2: or families that considered themselves to be more restrictive, they
19:55
Speaker 2: did a little bit better. But there is a huge
19:57
Speaker 2: increase in screen time for everyone. And this is where
20:00
Speaker 2: I get sort of frustrated with some of the conversations,
20:02
Speaker 2: the debates that unfold online. That's like very judgmental about
20:05
Speaker 2: parents and how much green time their kids are getting.
20:07
Speaker 2: And listen, we have restriction in my household.
20:09
Speaker 3: I do my best.
20:10
Speaker 2: I know every parent is out there doing their best
20:12
Speaker 2: for their kids to try to figure all this stuff out.
20:14
Speaker 2: But you are up against a multi trillion dollar industry,
20:17
Speaker 2: you were up against an entire culture. The idea that
20:20
Speaker 2: you are going to be able to just individually bootstrap
20:23
Speaker 2: your way to avoid the complete dominant culture. I mean
20:27
Speaker 2: it's impossible, you can, genuinely impossible.
20:30
Speaker 1: You can. You have to be rich, and you have
20:32
Speaker 1: to be fucking crazy. You actually have to be crazy.
20:34
Speaker 2: And then there's soundsides to that because then your kid
20:37
Speaker 2: is weird, like they're not in touch with the dominant culture.
20:40
Speaker 2: And there's something to be said for being weird, right,
20:42
Speaker 2: I Mean, some of the greatest thinkers and insights and
20:44
Speaker 2: creatives and whatever come out of people who don't grow
20:47
Speaker 2: up in the mainstream culture, and so they have a
20:49
Speaker 2: different perspective. But you know, most people are not going
20:53
Speaker 2: to be able to pull that off. The other thing
20:55
Speaker 2: that came out in this data that I thought was
20:57
Speaker 2: really interesting is in terms of the post COVID improvements.
21:01
Speaker 2: The two sectors of society that have done the best
21:03
Speaker 2: are the rich predictable because they can invest in tutoring
21:07
Speaker 2: and whatever support they need and blah blah blah, and
21:09
Speaker 2: the poor because there were programs, there was money put
21:12
Speaker 2: in place of like, Okay, we know we had this
21:14
Speaker 2: learning loss during COVID, we've got to do something. And
21:16
Speaker 2: it's actually the sort of middle income just like your
21:19
Speaker 2: average middle income district and family that has seen the
21:24
Speaker 2: least improvement post COVID because they don't have the resources
21:28
Speaker 2: of the rich to helicopter parent in and do everything
21:31
Speaker 2: possible and potentially with one stay at home parent that
21:34
Speaker 2: can do all the work on the side, and they
21:36
Speaker 2: don't have the extra support from the state and from
21:39
Speaker 2: the government to help get their kids back up to speed.
21:41
Speaker 2: So I thought that was really noteworthy as a well.
21:43
Speaker 1: Yeah, and to your point here about the culture, and
21:45
Speaker 1: this is when I say chromebook, I'm not blaming just
21:47
Speaker 1: the chromebook. I'm saying that it's about the ethos of
21:51
Speaker 1: doing things on the screen. You know, there's been a
21:53
Speaker 1: ton of evidence about education and retention of information. Typing
21:58
Speaker 1: is not the same as writing. It's just not and
22:01
Speaker 1: yet what do we teach, Oh, all homework has to
22:03
Speaker 1: be done on the chromebook, no paper needs to come
22:06
Speaker 1: back and look, it's one of those for retention, patience
22:11
Speaker 1: in lack of instant gratification. It's like a whole ethos
22:14
Speaker 1: around it. So when I say ban the screens and
22:17
Speaker 1: the chromebooks inside, I'm talking about introducing friction and learning
22:21
Speaker 1: and retention, which at this point only exists in private school,
22:24
Speaker 1: which I'm personally very against, Like I don't I'm not
22:27
Speaker 1: saying we shouldn't have the option. I'm saying for me personally,
22:30
Speaker 1: I don't believe in private school, like literally in terms
22:32
Speaker 1: of my own family a because I think it's like
22:35
Speaker 1: kind of empathetical to like a social project. But you know,
22:38
Speaker 1: more so more what I'm saying is like what it
22:40
Speaker 1: means is the American project of like mixing and actually
22:44
Speaker 1: getting to know like a lot of different people I
22:46
Speaker 1: think is very important. I support people's right to do
22:48
Speaker 1: so homeschool or private school or whatever if they want
22:51
Speaker 1: to religious school, if that's your thing. But I'm saying
22:53
Speaker 1: the way that I look at things, And that's why,
22:55
Speaker 1: though I think the government policy around this is so
22:58
Speaker 1: vital and important. Let's go to the D two. This
23:01
Speaker 1: supports your point here about technology. So American children now
23:06
Speaker 1: spend a massive amount of time on Internet enabled devices.
23:11
Speaker 1: And this is the best part all families, it's all
23:14
Speaker 1: the way up. What you also see though, is families
23:17
Speaker 1: who say they are low tech and prioritize outdoor play
23:21
Speaker 1: not all that different than the families who say they
23:24
Speaker 1: encourage engagement with technology. There's a gap, but it's not
23:27
Speaker 1: that big. The point is is that based on the
23:29
Speaker 1: reports of parents forty thousand children reported by twenty four
23:32
Speaker 1: thousand parents that adults may have reported children as using
23:35
Speaker 1: multiple devices simultaneously. It shows the weekly combined hours that
23:40
Speaker 1: a child use any Internet enabled device that has steadily
23:44
Speaker 1: climbed up with their age, that ultimately culminates in some
23:47
Speaker 1: nineteen hours per week that a child is on an
23:50
Speaker 1: Internet enabled device. And I think that points out even
23:55
Speaker 1: if you're one of the conscientious people, that you're really
23:58
Speaker 1: just not that far off from even the people who
24:00
Speaker 1: are like, oh, yeah, whatever, you can use an iPad.
24:02
Speaker 1: So when I said you have to be crazy, like
24:04
Speaker 1: I really mean it, like you have to be nuts. Yeah.
24:06
Speaker 1: And you can also see this in terms of broader culture.
24:10
Speaker 1: Go to the next one. This is another fascinating one.
24:12
Speaker 1: You could tell me more about this. Because your kids
24:13
Speaker 1: are older, American children are not allowed to go many places.
24:17
Speaker 1: The percent of children at each age allowed to walk, bike,
24:20
Speaker 1: or drive given distance without an adult accompanying them, according
24:23
Speaker 1: to each parent. So what you see is that there
24:26
Speaker 1: has been a dramatic decrease of the ability for children
24:30
Speaker 1: to not go to many places, cannot leave the house,
24:34
Speaker 1: cannot leave the street, can go cannot leave the yard,
24:36
Speaker 1: and cannot leave the neighborhood. And that Obviously, children become
24:41
Speaker 1: more independent as they get older, but the age at
24:45
Speaker 1: which they're allowed to like go and to be able
24:47
Speaker 1: to do things is steadily climbed. Some of this is probably,
24:52
Speaker 1: you know, there's all this talk about Anxius generation. A
24:54
Speaker 1: lot of this might be, you know, a surveillance like
24:57
Speaker 1: with technology, just because people literally know, like where you're
24:59
Speaker 1: going owing with what's that app? Call that all these
25:02
Speaker 1: families are like life with Life three sixty. I think
25:05
Speaker 1: that's what it is. It's like a tracker, which I get,
25:08
Speaker 1: you know, but in general, the lack of independence of
25:11
Speaker 1: the street you're talking about with board games critical thinking.
25:13
Speaker 1: I just think a lot of these formative experiences have
25:16
Speaker 1: dramatically declined over the last twenty years or so, even
25:20
Speaker 1: just compared to my childhood, which was already pretty embedded
25:22
Speaker 1: in the television culture, which was already dramatically different. There
25:25
Speaker 1: are trade offs. It's a value neutral phenomenon, but you
25:28
Speaker 1: have to observe it and say, what's the impact here
25:30
Speaker 1: on the education system?
25:32
Speaker 2: Yeah, you know, I think I'm just thinking this through
25:34
Speaker 2: in real time about the increased like protection about what
25:39
Speaker 2: you're allowed to do. So I'll just say, my nine
25:41
Speaker 2: year old, she's certainly allowed out of the house. She's
25:44
Speaker 2: but if she was going to go, I'm uncomfortable with her,
25:47
Speaker 2: just like going around the neighborhood by yourself, you know,
25:49
Speaker 2: at nine years old, and I'm worried about cars like
25:53
Speaker 2: that should be you know what, people don't pay attention, right,
25:56
Speaker 2: That's what I am fearful of. My twelve year old
25:59
Speaker 2: is allowed to go around the neighborhood by himself. You know,
26:02
Speaker 2: I want him to tell me before he leaves, but
26:04
Speaker 2: you know, when he's got his phone with him. That's
26:06
Speaker 2: another thing is the nine year old doesn't have a phone.
26:08
Speaker 2: The twelve year old does. Have a phone, so that's
26:10
Speaker 2: a difference as well. So that's, you know, the balance
26:13
Speaker 2: that I struck when I was When I was nine ten,
26:17
Speaker 2: I was allowed I lived in a much larger neighborhood,
26:20
Speaker 2: and I was allowed to go anywhere on my bike
26:22
Speaker 2: at any time. And so I know that it's different,
26:25
Speaker 2: and I'm not sure why. There's a different level of
26:28
Speaker 2: comfort for me. And by the way, if my mom
26:31
Speaker 2: was watching my kids, like, she's putting even more limitations
26:34
Speaker 2: on him than I am, even though she raised me
26:36
Speaker 2: in a much more prousive way. So something about the
26:38
Speaker 2: culture and the mentality has changed. I think part of
26:41
Speaker 2: it is that there is just people have fewer kids,
26:44
Speaker 2: and so there's a lot more invested in these like
26:47
Speaker 2: fewer numbers of kids that people have, and you see
26:50
Speaker 2: that and everything. You see that in the number of
26:52
Speaker 2: activities and the amount of time that people spend them,
26:54
Speaker 2: even as women have entered the workforce in large numbers
26:56
Speaker 2: at this point, women spend more time spending time playing
27:00
Speaker 2: games with teaching their kids than they did in previous generations.
27:05
Speaker 2: So there's just like a lot invested in them. So
27:07
Speaker 2: it makes the stakes really I of like, I don't
27:08
Speaker 2: want anything to happen to them. So I think there
27:11
Speaker 2: also was a shift with like the crime wave panics
27:14
Speaker 2: of the eighties and nineties too. There was a lot
27:17
Speaker 2: of emphasis on local news about you know, this kid
27:19
Speaker 2: getting kidnapped down of the blue, and I think that
27:21
Speaker 2: led to a lot more protective parenting as well. So
27:23
Speaker 2: it's a whole host of reasons why we've had this shift.
27:27
Speaker 2: But you know, I try to push my own comfort
27:30
Speaker 2: zone with you know, my kids doing things that are
27:33
Speaker 2: a little bit risky, even because I think it's important
27:35
Speaker 2: for kids to be able to manage their own risk
27:36
Speaker 2: levels without always having a parent gum and don't do that.
27:39
Speaker 3: It's not say, blah blah blah.
27:40
Speaker 2: But there's no doubt that I raised my kids in
27:43
Speaker 2: any more restrictive way than I myself was raised.
27:45
Speaker 1: Yeah, but you're already probably still out of step because
27:47
Speaker 1: most of these helicopter parents around like where I live
27:49
Speaker 1: and others, nobody's go leaving the house probably until like
27:51
Speaker 1: thirteen fourteen in terms of.
27:53
Speaker 2: Yeah good, I mean, granted, I live in a rural area, right,
27:55
Speaker 2: so it's a little different.
27:56
Speaker 1: See, this is why where you live matters. It really does.
27:59
Speaker 3: I will tell you you.
28:00
Speaker 2: Probably some of the parents that do the best job
28:01
Speaker 2: of this are like New York City, because I know
28:03
Speaker 2: New York City parents where you know, if you're you're
28:06
Speaker 2: a teenager, you're riding the bus in the subway around
28:08
Speaker 2: the city. You're going to school on your own on
28:10
Speaker 2: public transit from the time you're certainly in high school
28:12
Speaker 2: even middle school, and there, I feel like there's a
28:15
Speaker 2: lot more independence baked into that culture. Yeah, that culture
28:19
Speaker 2: than there is in most of American It makes sense.
28:22
Speaker 1: Yeah, I remember when you meet like a eighteen year
28:26
Speaker 1: old New York kid, You're like, you're like thirty dudes.
28:28
Speaker 2: Yeah, it's so much more yeah, together and like self
28:31
Speaker 2: sufficient than very true, you're average.
28:33
Speaker 1: Right, there's a few other elements here. Oh yeah, we
28:36
Speaker 1: wanted to put this up here.
28:37
Speaker 7: D six.
28:38
Speaker 1: We're always keeping an eye on all the countries. What
28:40
Speaker 1: are they doing? This is an interesting one out of Israel,
28:43
Speaker 1: Benjamin and Yahoo has unveiled we're speaking of different systems.
28:48
Speaker 1: Their system they have unveil unveiled a sweeping Summer AI
28:53
Speaker 1: initiative where students will be trained in GPT, cloud tech
28:57
Speaker 1: and more before matriculation exams, while also closing wartime gaps.
29:01
Speaker 1: The Education Minister says over billion shekels will be invested,
29:04
Speaker 1: with July counted as a full but optional school month,
29:08
Speaker 1: and Bezil Smotrich is framing it as freeing parents to
29:11
Speaker 1: work while delivering real learning, not babysitting, calling it so
29:14
Speaker 1: it's like a National Vision twenty forty system where all
29:18
Speaker 1: of Israel's future will be shaped through AI and training
29:22
Speaker 1: in GPT. Not really what I would want to sign
29:25
Speaker 1: my kids up for.
29:26
Speaker 3: Sounds appropriately dystopian for that country, yep.
29:29
Speaker 1: And then in terms of hours, there was this great
29:32
Speaker 1: bit from Tim Dillon. Let's put this here on the screen.
29:34
Speaker 1: You may have missed it. Milania Trump doing this event
29:39
Speaker 1: at the White House with the Queen Consort Camilla where
29:45
Speaker 1: children are all donning VR headsets for quote AI powered
29:51
Speaker 1: cross cultural educational program.
29:54
Speaker 3: So freakin dystopian.
29:56
Speaker 2: Milania has been on this weird like wanting to put
29:59
Speaker 2: AI in the school systems and like this is her
30:02
Speaker 2: thing this time around, and I yeah, I don't know, no, thanks, no, good, good.
30:07
Speaker 1: On that, thank you. I'm exiting that those are the
30:10
Speaker 1: If those start showing up in public schools, that's whe
30:12
Speaker 1: I'm going to go private. That's why we need the ability.
30:14
Speaker 3: There is a line.
30:15
Speaker 1: If we need to that's my line for sure. You
30:18
Speaker 1: start with GPT in a five year old space. No no, no,
30:21
Speaker 1: no no. All right now, continuing on this vein, we
30:23
Speaker 1: have got great guest standing by Zach Xley. Let's get to.
30:26
Speaker 2: Him, says you guys know, we've been covering the development
30:32
Speaker 2: of AI and some of the local opposition to AI
30:35
Speaker 2: extensively on this show. Joining us now to talk more
30:37
Speaker 2: about a new vision for how we should think about
30:41
Speaker 2: the development of AI is Zach Exley. He's a former
30:43
Speaker 2: senior advisor to Bernie Sanders, co founder of the Justice
30:46
Speaker 2: Dams alongside my own husband Kyle Kolinski, and founder of
30:49
Speaker 2: the New Consensus think tank.
30:51
Speaker 3: Welcome z That great to have you.
30:52
Speaker 7: Good to you, Thank you.
30:53
Speaker 8: It's really exciting to be here you guys. I have
30:56
Speaker 8: to say, you guys are really the one place where
31:00
Speaker 8: progressive populists are.
31:01
Speaker 7: Doing it right.
31:02
Speaker 1: Oh, thank you.
31:02
Speaker 8: And yeah, I mean you've got this amazing combination of
31:07
Speaker 8: viewpoints and I really think the right perspective that is
31:12
Speaker 8: going to serve us going into the decades as of
31:15
Speaker 8: the rest of our lives.
31:16
Speaker 7: So I'm really grateful for what you're doing here.
31:19
Speaker 3: It's our pleasure.
31:19
Speaker 2: Thank you very much for that means a lot coming
31:21
Speaker 2: from you, and you've been doing a lot of work
31:23
Speaker 2: on AI want a broaden out in just a moment,
31:25
Speaker 2: But first I wanted to talk a little bit about
31:28
Speaker 2: the immediate bipartisan backlash that is really building into sort
31:32
Speaker 2: of a grassroots movement against data centers being located in
31:36
Speaker 2: local areas. And the bipartisan nature of this was on
31:40
Speaker 2: display in a recent Tucker Carlson debate with Kevin O'Leary,
31:44
Speaker 2: who is behind this massive data center build out project
31:47
Speaker 2: in Utah. Tucker challenges som quite aggressively on that. Let's
31:51
Speaker 2: go ahead and take a listen.
31:52
Speaker 9: I would think since you disagree with the Chinese way
31:54
Speaker 9: of life, which is pretty civilized in a lot of ways,
31:56
Speaker 9: but the one way in which it's barbaric is that
31:59
Speaker 9: it grants its is no real rights, and so I
32:02
Speaker 9: would think that you would be very worried about aping
32:05
Speaker 9: their system, which we are now doing. Like they have
32:08
Speaker 9: total surveillance. It's a panopticon in China. We should create
32:11
Speaker 9: our own. Let's take forty thousand acres in Utah and
32:13
Speaker 9: make it possible for the government to know where you
32:15
Speaker 9: are at all times and what you're thinking, listening to
32:17
Speaker 9: you on your phone like we have that, But we
32:19
Speaker 9: can't be upset about you.
32:20
Speaker 6: You have to choose the less of two evils in
32:23
Speaker 6: your scenario. And I'm telling you what you should do
32:27
Speaker 6: is say, I want Kevin Ollury to succeed. I want
32:30
Speaker 6: him to beat the Chinese and compute power and then
32:34
Speaker 6: use the laws of the United States to make sure
32:36
Speaker 6: that you keep that compute power and check whichever way
32:38
Speaker 6: you want, but to not have it available to put
32:41
Speaker 6: down my shovel. I don't think people want me to
32:43
Speaker 6: do that. Even the people in box Elder, the majority
32:46
Speaker 6: of them want me to hold my shovel and start digging.
32:49
Speaker 6: And that's basically the debate we're having.
32:52
Speaker 7: These How do you know that that the majority.
32:54
Speaker 6: They voted for unanimously before the Chinese guys, there was
32:58
Speaker 6: a referendum match all this crap that's being spewed up, we're.
33:02
Speaker 9: Told, and I'm yeah, and I may have fallen for
33:04
Speaker 9: some of it. So you correct me. There was a
33:06
Speaker 9: referendum among citizens or did some like county board vote.
33:11
Speaker 6: We actually went through the whole process that you have
33:15
Speaker 6: to do by their laws and were granted.
33:19
Speaker 1: Three to zero.
33:21
Speaker 6: The commissioners of the county said, we.
33:23
Speaker 9: Will do three people voted, the people of the county officials.
33:27
Speaker 9: That's how you How hard is it for Kevin O'Leary
33:32
Speaker 9: and Amazon and Microsoft and Google to subvert three county
33:37
Speaker 9: commissioners in rural Utahucker.
33:39
Speaker 6: They vote, they wanted, They asked us to come. They
33:43
Speaker 6: asked us to bring fifteen billion dollars. They asked, and
33:46
Speaker 6: they voted, and they it was a three to zero vote.
33:49
Speaker 1: They that's how it got. There's no other run.
33:52
Speaker 9: Google and Kevin O'Leary got three county commissioners in rural
33:55
Speaker 9: Utah on their side.
33:57
Speaker 1: Good work, And.
33:58
Speaker 2: Just to add some numbers to the level of opposition
34:01
Speaker 2: that has grown to the development of these data centers locally,
34:04
Speaker 2: could put F three up on the screen. Recent poll
34:08
Speaker 2: that found seven out of ten Americans said they would
34:11
Speaker 2: oppose a data center being built near them. Opposition is
34:14
Speaker 2: so intense that more Americans would live rather live near
34:17
Speaker 2: a nuclear power plant than a data center. That's music
34:20
Speaker 2: to socber's ears on that one. But in any case,
34:23
Speaker 2: act I mean this is relatively recent. Previously there was
34:26
Speaker 2: a lot more openness. People have drawn this kind of
34:29
Speaker 2: line in the sand around data centers specifically because it
34:33
Speaker 2: is the pressure point they had. It's a one place
34:34
Speaker 2: where they have some control potentially over what development looks
34:38
Speaker 2: like and what gets built in their own neighborhoods.
34:41
Speaker 8: Yeah, and I think it's great that people are fighting
34:43
Speaker 8: back against data centers. It's really important because they're harming communities.
34:47
Speaker 8: They're in all kinds of ways. They're raising utility bills
34:50
Speaker 8: at a time when they're already incredibly high. And also
34:53
Speaker 8: there's an aspect of you know, you know, the luddite
34:56
Speaker 8: to you know, through their wooden shoes in the machines,
34:59
Speaker 8: to just like, you know, destroy the machines that we're
35:01
Speaker 8: displacing them. Like, there's an aspect of people seeing that
35:05
Speaker 8: AI is going to take away their livelihoods, and so,
35:09
Speaker 8: you know, there's a bit of a just like, let's
35:10
Speaker 8: fight it wherever we can fight it, you know, aspect
35:14
Speaker 8: to that, which I think is fine. It's and it's good,
35:16
Speaker 8: and people should be doing it. We should be doing
35:18
Speaker 8: it as much as we can. But it's not a
35:22
Speaker 8: solution to the whole problem of AI. This is really
35:27
Speaker 8: something that is going to completely transform our world, our
35:31
Speaker 8: way of life, whether we like it or not, no
35:34
Speaker 8: matter what we do. And the I think that progressives,
35:38
Speaker 8: especially progressives and lefties like have a hard time seeing that, Yeah,
35:41
Speaker 8: because I think there's this instinctive you know, these are
35:45
Speaker 8: this is a new product that these billionaires are pushing
35:49
Speaker 8: on us. It's just like social media. You know, it's
35:51
Speaker 8: all over again. It's this new thing that we don't
35:53
Speaker 8: have any control over. That's all completely true, but it's
35:57
Speaker 8: also something completely different than that. And you know, it's
36:00
Speaker 8: it's an emergent phenomena in our universe right where where
36:05
Speaker 8: human intelligence is spilling out of humanity into these data centers.
36:11
Speaker 8: And you know, even if we stop all of the
36:13
Speaker 8: data centers, the way the technology is advancing, like you're
36:17
Speaker 8: going to be able to run amazing a AI on
36:19
Speaker 8: your phone, you know, in another few years. Like there's
36:22
Speaker 8: just there's no stopping this phenomenon of our intelligence. You know,
36:27
Speaker 8: this last skill that humans had that made that you
36:30
Speaker 8: know that machines couldn't do. These skills, these abilities are
36:33
Speaker 8: just pouring into the physical world, into silicon and and
36:37
Speaker 8: so we're I don't I don't think there's any way
36:39
Speaker 8: to stop it. But the good news is that we
36:43
Speaker 8: are still a part of the process of this stuff
36:45
Speaker 8: being built. We're still a part of this technological explosion.
36:49
Speaker 8: And as long as we're a part of it, maybe
36:51
Speaker 8: just for another few years, we can change course and
36:54
Speaker 8: we can turn it into something that really benefits us.
36:57
Speaker 1: Yeah, Zach, let's put F two up here on the screen,
37:00
Speaker 1: continuing on this data center project around Lake Tahoe. You
37:04
Speaker 1: could see that nearly fifty thousand have been told their
37:07
Speaker 1: utility will stop providing power because it's redirecting that power
37:11
Speaker 1: to data centers. Nevada Energy has supplied most of Lake
37:14
Speaker 1: Tahoe's electricity for decades, says next year it will stop
37:18
Speaker 1: servicing homes in the area and instead direct that electricity
37:22
Speaker 1: to the growing demand of Nevada data centers. So how
37:26
Speaker 1: is it, though, that you can see this happen, and
37:29
Speaker 1: not only in a US state, but have the consumers
37:33
Speaker 1: and the citizens have no even say over something like this.
37:38
Speaker 8: Well, I mean, that's how our economic system works. We
37:41
Speaker 8: have you know, we we here in the US, people
37:44
Speaker 8: all over the world, we've got very little say over
37:47
Speaker 8: what's happening to us economically. You know, we've been just
37:50
Speaker 8: to pick a random example, you know, we've been exporting
37:52
Speaker 8: our waste, you know, including all kinds of toxic waste
37:57
Speaker 8: to poor countries all over the world, and you know,
37:59
Speaker 8: just killing tons and tons of people and making millions
38:02
Speaker 8: of people sick. Nobody even talks about that. You know,
38:05
Speaker 8: there's a million other things like that. This is just
38:07
Speaker 8: in the news now because I think because people can
38:11
Speaker 8: see that it's actually much bigger than our utility bills
38:15
Speaker 8: going up. This really is something that's going to eliminate
38:19
Speaker 8: work for just about everybody. And the incredible thing and
38:23
Speaker 8: this is really what we've got to refocus to because
38:25
Speaker 8: this data center stuff is, yes, we have to fight it,
38:29
Speaker 8: but it's like really kind of a distraction if we're
38:32
Speaker 8: not really keeping our eye on the really big consequence,
38:37
Speaker 8: which is that really, in just a matter of a
38:39
Speaker 8: few years, everybody like, if you could do your job
38:43
Speaker 8: in the pandemic on your computer, if you can do
38:45
Speaker 8: your job remotely, now your job is going to be
38:48
Speaker 8: done by AI, right, and and people, you know, people
38:52
Speaker 8: still haven't accepted this. They're still coming up with explanations
38:56
Speaker 8: about why this isn't going to happen. And I don't
38:58
Speaker 8: know if you guys would like to get into that now.
39:00
Speaker 8: It's a difficult conversation to have because you know, there's
39:03
Speaker 8: just there's so many completely new things about this that
39:07
Speaker 8: we're having a hard time getting our heads around.
39:09
Speaker 2: Yeah, I do want to talk a little bit more
39:10
Speaker 2: about that. First, let's put F one up on the screen.
39:12
Speaker 2: This is some of your work at New Consensus. You've
39:14
Speaker 2: got a provocative headline here, which is you say, why
39:17
Speaker 2: capitalism can't survive AI, and you get into the details
39:21
Speaker 2: of why this is different from the Industrial Revolution, let's say,
39:25
Speaker 2: or you know some of the past transitions that people
39:27
Speaker 2: point to of like oh, this technological you know, advance,
39:30
Speaker 2: there was all sorts of naysaying and doom and gloom
39:34
Speaker 2: around it, but ultimately created more jobs than it destroyed.
39:37
Speaker 2: You've got some details about how you think the collapse
39:40
Speaker 2: is going to happen, and then you have ideas about
39:42
Speaker 2: what we need to do. So let me start here
39:45
Speaker 2: playing devil's advocate for the idea that it is going
39:47
Speaker 2: to be this transformative, because I think you're right. I
39:50
Speaker 2: see a lot of progressives and people more broadly on
39:52
Speaker 2: the left who see this all as like marketing gimmicks
39:55
Speaker 2: are like, yeah, sure, these people are selling yous bill goods.
39:58
Speaker 3: That they're going to replace all of labor.
39:59
Speaker 2: The the reason they're saying that is because to justify
40:02
Speaker 2: their valuations, they have to claim that this technology is
40:06
Speaker 2: going to be hyper productive and be able to replace
40:08
Speaker 2: all sorts of human beings. That's where the value comes
40:11
Speaker 2: in for the companies that they're trying to sell this to,
40:14
Speaker 2: and in the minds of the shareholders and the investors
40:16
Speaker 2: that they are trying to promote to.
40:18
Speaker 3: So what is your response, Why are you.
40:20
Speaker 2: So confident that this is going to be something other
40:24
Speaker 2: than a basically glorified Google search. How it's going to
40:28
Speaker 2: be this truly transformative technology, unlike something we've seen in
40:32
Speaker 2: the past.
40:34
Speaker 8: Yeah, and that's one of the questions, right, is it
40:37
Speaker 8: really going to be smart enough and capable enough to
40:40
Speaker 8: replace humans?
40:42
Speaker 7: And like, let's just start with that.
40:45
Speaker 8: It's I mean, first of all, it is replacing a
40:48
Speaker 8: lot of humans in a lot of knowledge jobs. You know,
40:51
Speaker 8: what's happening in software development is just absolutely incredible. But
40:57
Speaker 8: there's still some limitations to these AI agents, and you know,
41:02
Speaker 8: the kind of AI that people are using to like
41:04
Speaker 8: really try to do jobs. There's still some limitations, but
41:07
Speaker 8: those that are preventing them from from replacing tons and
41:10
Speaker 8: tons of employees. But those limitations are really mundane. They're
41:15
Speaker 8: not at the level of you know science or you know,
41:19
Speaker 8: real advanced software development. It's it's stuff like just wiring
41:23
Speaker 8: the AI to a memory, Like the memories are really
41:27
Speaker 8: bad right now. But there's like a thousand companies and
41:31
Speaker 8: you know, a thousand thousands of open source developers all
41:34
Speaker 8: working to build memory systems, and it's it's such simple stuff,
41:38
Speaker 8: Like really like people who aren't even software developers are
41:42
Speaker 8: building some of these systems because it's really just creating
41:44
Speaker 8: ways for the AI to like make notes to itself
41:48
Speaker 8: and a set when you know, if you get into
41:50
Speaker 8: like studying how the brain works, you realize that that's
41:53
Speaker 8: really how our brain works too.
41:55
Speaker 1: You know.
41:55
Speaker 8: We we we're not fully conscious and aware of everything
41:59
Speaker 8: all at the same time. Our brain, you know, has
42:02
Speaker 8: intelligence built into all these circuits, and it has memories
42:05
Speaker 8: and it goes and fetches those memories as it needs it.
42:08
Speaker 8: So the last pieces, like the other really mundane piece
42:12
Speaker 8: that AI needs that's holding it back right now is
42:15
Speaker 8: just access to your keyboard and your screen, right, And
42:18
Speaker 8: it's it's funny, like I do a ton of work
42:21
Speaker 8: with AI, all kinds of software projects and research. We
42:24
Speaker 8: use it at new consensus and you know that leads
42:27
Speaker 8: a lot of people to yell at me online whenever
42:30
Speaker 8: they hear me say that, but it's, you know, I'm
42:32
Speaker 8: using it so that I can really know how this
42:35
Speaker 8: actually works. And it really is like working with a
42:38
Speaker 8: human being. It's just really you know, and the capacity
42:41
Speaker 8: that it has for the work that I do with
42:43
Speaker 8: it is just incredible. Like I have managed teams of
42:46
Speaker 8: software developers before, you know, on multimillion dollar projects, and
42:51
Speaker 8: this one AI for one hundred dollars a month can
42:54
Speaker 8: do the work of a team of ten people projects
42:57
Speaker 8: that would have taken a year or just would have
42:59
Speaker 8: been playing in pops. We can you know, I can
43:01
Speaker 8: now do with it in days, right, But also on
43:03
Speaker 8: the research front, it's incredible, and I mean, I'd love
43:06
Speaker 8: to tell you all about it, but it's really incredible
43:08
Speaker 8: what it can do. And but it's like working with
43:12
Speaker 8: a human being. But it's funny and actually my you know,
43:15
Speaker 8: the agent I work with, and we actually joke around
43:18
Speaker 8: about this that it can you know, it can solve
43:20
Speaker 8: these huge, incredible problems. You know, it can tell me
43:23
Speaker 8: stuff about any corner of human history because I've loaded
43:27
Speaker 8: thousands and thousands of books and sources into it, and
43:31
Speaker 8: yet it cannot click on the submit button on a
43:34
Speaker 8: website on my screen. Right, But that problem is going
43:38
Speaker 8: to be solved, right, So, like when I try to
43:39
Speaker 8: get it to go buy a plane ticket for me,
43:41
Speaker 8: it just can't do it. But that problem is going
43:43
Speaker 8: to be solved with some really mundane tools, like you know,
43:46
Speaker 8: I'm sure you've heard about open claw. There was a
43:48
Speaker 8: lot of hype around that, and that was a new
43:50
Speaker 8: product that an open source developer on his own with
43:54
Speaker 8: no money, just wired together that basically gave the AI
43:58
Speaker 8: the ability to see some stuff that I couldn't see before.
44:01
Speaker 8: And but then of course Opening Eye hired him, and
44:04
Speaker 8: you know, and all progress stopped there. But it's okay,
44:08
Speaker 8: there's thousands of other people out there that are doing
44:10
Speaker 8: that wiring. So the thing that's going to happen, which
44:15
Speaker 8: is going to change everything, is that in a couple
44:17
Speaker 8: of years or maybe a few years, these problems are
44:20
Speaker 8: going to be solved and an AI is going to
44:23
Speaker 8: appear in your Google meet, at your team meeting at work,
44:27
Speaker 8: and it's going to be fully capable of doing anything
44:30
Speaker 8: that a human can do, anything that anybody on your
44:32
Speaker 8: team can do. But it's going to be the reality
44:35
Speaker 8: is it's going to be smarter and better and faster,
44:38
Speaker 8: and it's going to it this one being is going
44:41
Speaker 8: to be working with everybody all across the company, all
44:45
Speaker 8: at the same time. So how long is it going
44:47
Speaker 8: to take until that being can just do all of
44:51
Speaker 8: the work of the company, of you know, all of
44:53
Speaker 8: the work of everybody that does their jobs on computers.
44:55
Speaker 8: And so the next step is the CEO is just
44:57
Speaker 8: going to talk to that AI and realize, hey, we
45:01
Speaker 8: don't need the people anymore. And then guess what's going
45:03
Speaker 8: to happen next? The board of directors is going to
45:05
Speaker 8: talk to the AI and realize we don't need that
45:08
Speaker 8: CEO anymore. But the changes are going to be so
45:12
Speaker 8: much bigger than that, because when this starts to happen,
45:16
Speaker 8: like entire industries don't make sense anymore, like management consulting,
45:20
Speaker 8: you know, financial management, money management, insurance, there's you know,
45:24
Speaker 8: all these industries just don't make sense anymore because everybody
45:28
Speaker 8: will be able to do everything for themselves, Like no
45:31
Speaker 8: company will ever hire McKenzie to run the same AI
45:35
Speaker 8: to answer questions that they can run themselves.
45:37
Speaker 2: You know, well, really this really gets to your thesis
45:40
Speaker 2: that capitalism as it is structured now cannot handle these changes.
45:46
Speaker 2: Can you lay down why you think it will lead
45:49
Speaker 2: to a sort of collapse?
45:51
Speaker 3: What will be the mechanisms, what will that look like?
45:54
Speaker 8: Yeah, and this is hard because capitalism has run so
45:58
Speaker 8: smoothly for so long, like ever since the World War two,
46:02
Speaker 8: basically that I mean, you know, I know there's there
46:04
Speaker 8: been booms and busts. Yeah, but if you know, if
46:07
Speaker 8: you actually look at how capitalism used to work right
46:10
Speaker 8: before the Great Depression, you know, all through the eighteen hundreds,
46:14
Speaker 8: like there was a Great Depression every decade, and they
46:17
Speaker 8: were way more severe than the Great Depression in a
46:19
Speaker 8: lot of ways. You know, huge chunks of the population
46:23
Speaker 8: starving because the entire capitalist system just shut down. And
46:28
Speaker 8: all of those crashes, just like the Great Depression, were
46:31
Speaker 8: basically caused by overproduction machines getting really efficient producing tons
46:37
Speaker 8: and tons of stuff. The financial bubbles are mixed in,
46:41
Speaker 8: so you know, you have financial bubbles around whatever new
46:44
Speaker 8: technology is out there is this sounding familiar and and
46:48
Speaker 8: but you know, and so the thing that we forgot,
46:52
Speaker 8: you know, we can't, we can't. It's we haven't experienced
46:55
Speaker 8: this with capitalism. A moment when capitalism runs out of customers, right,
47:00
Speaker 8: And like the same way that that an animal needs
47:03
Speaker 8: oxygen to breathe, capitalism needs customers if and it's so
47:08
Speaker 8: basic and simple, like it's such a stupid thing to say,
47:11
Speaker 8: but it's absolutely true, and it's inescapable. And so this
47:14
Speaker 8: is what you know has basically caused you know, long
47:18
Speaker 8: periods of unemployment and economic catastrophe in the past when
47:22
Speaker 8: you know, capitalism builds out too much stuff in a
47:24
Speaker 8: bubble and then they realize, you know, it was all
47:27
Speaker 8: silly and there's not enough people to buy. People don't
47:30
Speaker 8: have the money to buy this stuff, so they start
47:32
Speaker 8: laying people off. Well, that's it's a self fulfilling cycle, right,
47:35
Speaker 8: It's a that's everybody needs to understand this because this
47:38
Speaker 8: is what's going to be happening. There's it's called a
47:41
Speaker 8: demand doom loop. You know, it's a demand it's a
47:45
Speaker 8: self reinforcing demand downward spiral. Right, So there's people have
47:50
Speaker 8: less money to buy stuff, so that creates less demand,
47:54
Speaker 8: so companies lay people off, which lowers you know, which
47:58
Speaker 8: lowers demand even more. We've stopped that, you know, since
48:02
Speaker 8: World War Two by jumping in. The government jumps in
48:06
Speaker 8: and just gives everybody money, and then capitalism gets back
48:10
Speaker 8: on its feet. This has worked for you know, a
48:14
Speaker 8: few centuries now. Well, even without the bailouts, capitalism has
48:18
Speaker 8: eventually started investing again and employing people again. Because it's
48:22
Speaker 8: true what they say that new technology creates new kinds
48:25
Speaker 8: of products and new kinds of services, which means new companies,
48:29
Speaker 8: which means new jobs. So people got automated off the
48:32
Speaker 8: farms into the factories, and then they got automated out
48:35
Speaker 8: of the factories into offices. And capitalism's you know, amazing
48:39
Speaker 8: trick is that it can just limit limitlessly create new
48:43
Speaker 8: products and services, which keeps everybody employed and keeps the
48:47
Speaker 8: system expanding. There's a big problem now with AI because
48:52
Speaker 8: now AI is going to be able to do everything
48:55
Speaker 8: that a person can do at their computer, right and
48:57
Speaker 8: there's a lot of other jobs that are going to
48:59
Speaker 8: get automated too, that are getting automated in factories, in
49:02
Speaker 8: cars obviously, and in all kinds of other parts of
49:04
Speaker 8: the economy, but it can do everything that humans can
49:09
Speaker 8: do with their brains. It will be able to very shortly.
49:12
Speaker 8: And so that means that this wave of automation is
49:17
Speaker 8: like when the horse got automated out of a job.
49:20
Speaker 8: And I think Ryan actually brought this up or somebody
49:22
Speaker 8: on your show brought this up weeks ago, And this
49:25
Speaker 8: is absolutely true. And it's a great analogy because once
49:28
Speaker 8: you put once you connected an engine to wheels and
49:31
Speaker 8: some you know, other contraptions, there was nothing that horses
49:35
Speaker 8: could do that machines could not do better. So obviously
49:38
Speaker 8: people who like horses are going to have horses around.
49:40
Speaker 8: Horses can race, okay. So but and you know, and
49:43
Speaker 8: as humans, we're still going to have value to each other,
49:46
Speaker 8: but we are not going to have value as workers
49:49
Speaker 8: for capitalism, and that means they're going to lay us
49:52
Speaker 8: all off. That means no customers, and then that means
49:56
Speaker 8: capitalism seizes up and really cannot function anymore.
50:00
Speaker 7: So we're going to have to choose what comes next.
50:03
Speaker 8: Whether you're a fan of capitalism or hate capitalism, we're
50:06
Speaker 8: all going to have to build a new economic system
50:09
Speaker 8: in the wake of this transition.
50:12
Speaker 2: One question I have for you, Zach is just to
50:14
Speaker 2: push on that thesis. Already, so much of the consumer
50:17
Speaker 2: economy is dominated by the spending of the wealthy.
50:21
Speaker 3: Do they actually need us all?
50:24
Speaker 2: Like, is most of the population sort of irrelevant now
50:27
Speaker 2: to the functioning of capitalism, the functioning of our system at.
50:30
Speaker 8: This point, Well most Yeah, more than half of our
50:34
Speaker 8: consumption is done by the top twenty percent of our population.
50:39
Speaker 7: Those are the first people who are.
50:40
Speaker 8: Going to get laid off with the AI collapse, right,
50:44
Speaker 8: and so that you know, so that is really going
50:47
Speaker 8: to create an incredible economic crisis because demand is really
50:51
Speaker 8: really going to tank. Yeah, But I think you're getting
50:53
Speaker 8: at this other idea too, which is, you know, like
50:57
Speaker 8: we have this idea that you know, the people that
50:59
Speaker 8: own these companies and the top elites, the people that
51:02
Speaker 8: are financing all of this, they're just going to get
51:04
Speaker 8: wildly rich off of this. Like I already said, I
51:07
Speaker 8: don't think that that's actually going to happen, because they
51:10
Speaker 8: need customers to get rich, they need the economy to
51:13
Speaker 8: actually mention to get rich. But let's do a little
51:15
Speaker 8: thought experiment. These people own the economy, right, they own
51:19
Speaker 8: means of production. They've all got their bunkers in New Zealand, right,
51:22
Speaker 8: so maybe you know, hypothetically this is true. They could
51:26
Speaker 8: move to New Zealand, they could move some factories there.
51:28
Speaker 8: You know, they could build their own data centers for
51:31
Speaker 8: the you know, so that the AI can manage their
51:33
Speaker 8: little economy for them, right. And so you can imagine
51:36
Speaker 8: that the people that own the economy today could say,
51:39
Speaker 8: screw all these people, we just want everybody to starve,
51:43
Speaker 8: and we're going to go build our own economy on
51:46
Speaker 8: an island somewhere. So first of all, that's not capitalism anymore,
51:50
Speaker 8: which is something interesting to observe, right, Like what you're
51:53
Speaker 8: talking about there is the rich building a little you know,
51:57
Speaker 8: socialist economy for themselves, right. I mean this has actually
52:00
Speaker 8: happened before. You know, look at the history of South Africa.
52:02
Speaker 8: The whites in South Africa got together and built themselves
52:05
Speaker 8: their own like socialist, utopian economy on the backs of
52:08
Speaker 8: everybody else. So it's it's not that weird of an idea, actually,
52:13
Speaker 8: but we should say that is absolutely absurd. Like we
52:17
Speaker 8: need to have a political movement, and I believe we're
52:20
Speaker 8: going to you know, going into twenty twenty eight with
52:22
Speaker 8: the presidential campaign.
52:25
Speaker 7: We need to have a movement that says screw you guys.
52:29
Speaker 8: That is, you know, you can go to New Zealand,
52:31
Speaker 8: but like you're not taking our means of production that
52:34
Speaker 8: we have all built together. And we're going to see
52:38
Speaker 8: all these data centers going out of business. We're going
52:40
Speaker 8: to see the AI companies going out of business. And
52:44
Speaker 8: that's not just because there's not going to be customers.
52:46
Speaker 8: It's because their business models are just like fundamentally ridiculous.
52:51
Speaker 8: It's they're not monopoly products, they're just commodities. And that's
52:54
Speaker 8: why these valuations don't make sense. But when all this
52:57
Speaker 8: stuff is going out of business and we have planned
52:59
Speaker 8: for this on new consensus, and it's we have to
53:04
Speaker 8: can we have to not just let all this stuff
53:06
Speaker 8: be sold off for parts. We we need to not
53:10
Speaker 8: do government bailouts of this totally failed business model. We
53:15
Speaker 8: need to take possession of this stuff. And you know,
53:18
Speaker 8: I'm not even talking about don't worry, Soccer, I'm not
53:20
Speaker 8: even talking about expropriation here.
53:22
Speaker 7: This stuff is gonna these are gonna be worthless at all.
53:24
Speaker 1: And I'm a post of that.
53:26
Speaker 7: Okay, Okay, sorry, Well you know, but it's basically.
53:33
Speaker 8: Okay, good, So we're we're, you know, we we need
53:38
Speaker 8: to take possession of this stuff and you know, we
53:39
Speaker 8: can just buy it up as it's going out of business.
53:42
Speaker 8: You know, it's in two thousand and nine, Uh, there
53:44
Speaker 8: was a guy in the Brazilian government, in Lula's government,
53:47
Speaker 8: who actually proposed, like, let's buy all of the Wall
53:50
Speaker 8: Street banks because they were all less worth than less
53:53
Speaker 8: than a billion each, right, and you know, so we're
53:56
Speaker 8: we could do that right in this moment of collapse.
53:59
Speaker 8: And and I'm not saying I'm not cheering for the
54:01
Speaker 8: collapse so that we can do this. It's just that
54:04
Speaker 8: I think it's very clear that this is what's going
54:06
Speaker 8: to happen. I think in the next year or two.
54:08
Speaker 8: This is why I think it's you know, really great
54:10
Speaker 8: for like, we need leaders like you all to be
54:13
Speaker 8: ready for this because in a year or two, it's
54:15
Speaker 8: going to start becoming clear to everybody what's happening. And
54:18
Speaker 8: you know, and we're going to have a stage of
54:19
Speaker 8: presidential candidates running for the Democratic nomination, and some of
54:23
Speaker 8: them are going to be completely clueless, and some of
54:26
Speaker 8: them are going to see, you know what how drastic
54:29
Speaker 8: the change is going to be, and they're going to
54:32
Speaker 8: be up to the challenge of talking about what comes next.
54:35
Speaker 8: And I think we might be surprised about like I
54:37
Speaker 8: really have no idea who's going to get it and
54:39
Speaker 8: who's not.
54:40
Speaker 1: You know so well, Zach.
54:42
Speaker 2: I think it's extremely important the work that you're doing,
54:45
Speaker 2: and you know, I think there has not been outside
54:49
Speaker 2: of your work enough thought put into Okay, yes we
54:53
Speaker 2: don't like the oligarchs, but what are we going to
54:55
Speaker 2: do and what is this all going to look like?
54:57
Speaker 2: So I really encourage people to go and read the
54:59
Speaker 2: World Report that we put up earlier. I'm going to
55:01
Speaker 2: put the link in the description so that people can
55:04
Speaker 2: find it easily, and I hope you'll come back and
55:06
Speaker 2: talk to us some more.
55:07
Speaker 3: It's been great talking to you today, yet provocative.
55:09
Speaker 1: I got to think about it more. That's why I'm
55:10
Speaker 1: just sitting there absolutely thanks for having me on.
55:14
Speaker 3: It's our pleasure to Zach.
55:15
Speaker 1: Thank you, Thank you guys so much for watching. We
55:18
Speaker 1: appreciate it. We'll see you all tomorrow.