Breaking Points: 6/23/22 FULL UNCUT SHOW

Krystal and Saagar discuss the West’s sanctions reckoning, GOP primary elections, DeSantis vs Trump, Uvalde police misconduct, Fed policy implications, MSNBC scolding, economic collapse, gas tax mistake, & more! CLICK THE LINK BELOW FOR TICKET PURCHASES with BreakingPoints as the password. TICKETS:… Merch: New Yorker Feature:… Skanda Amarnath:…… Timestamps: Ukraine: 0:0022:59 Primaries: 23:0039:08 Uvalde: 39:0955:40 Fed: 55:411:04:54 MSNBC: 1:04:551:10:13 Krystal: 1:10:141:21:09 Saagar: 1:21:101:30:02 Skanda Amarnath: 1:30:031:51:40

6/22 NEWSLETTER: Western Sanctions, Primary Results, Uvalde Coverup, Gas Policy, & More!
Welcome to the June 22nd, 2022 edition of the Breaking Points with Krystal and Saagar premium newsletter. We have a MAJOR ANNOUNCEMENT to begin the newsletter about the BP live tour coming up. Beginning today, ticket sales will be made available exclusively to premium subscribers for the next seven days if you click this TicketMaster link:
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Now to the contents of today’s show here:
The reckoning across the West of how sanctions towards the Russians have backfired is growing, with a New York Times exploration of how they ‘boomeranged’ back on the West. After the Europeans heavily sanctioned and embargoed Russian oil, causing prices to skyrocket around the world, China and India have stepped in to fill the gap. The Russians have exported their oil at high but discounted prices to China and India at rates significantly higher than before the sanctions, where the EU was by far the largest importer of Russian crude. The Russians are now the largest oil supply for China, topping Saudi Arabia. India has also made large profits reselling cheaper Russian oil to Europe at the global price. Within Russia, the Rouble has strengthened and the Kremlin has brought in enormous profits since the sanctions, softening Russia’s economic contraction. It has led to some introspection for European officials, with German Chancellor Olaf Scholz foreign policy minister challenging the current consensus. His fear comes from pushing Russia deeper into China’s arms and unnecessary escalation of the war in Ukraine. A swift backlash fell upon the German foreign minister for his comments, a sign the West has more reckoning to do after the New York Times article.
President Biden questioned those critical of the sanctions by creating a dichotomy between supporting Ukraine and paying higher gas prices. The administration believed Americans would be willing to pay more in exchange for supporting Ukraine, as polling indicated in early March. But the tides have turned because of dramatic increase in gas prices, and with Russia’s slow moving offensive in the Donbas region gaining ground. It was previously reported that inside the White House, officials have been shocked by the results of the unprecedented sanctions being much different from what was expected. So far, the administration has done little to temper the rise in gas prices, an issue to be covered in the guest segment later in the show.
More important primaries took place on Tuesday night on the Republican side. In Alabama, frontrunner Katie Britt came out victorious in the much watched GOP Senate primary. She received Donald Trump’s endorsement after he unendorsed Mo Brooks who was third in polls at the time. Britt defeated Brooks in the runoff election after a late surge propelled him to second place. She has never held elected office but previously worked for outgoing Alabama Senator Richard Shelby as chief of staff. Brooks is a six term congressman who is seen as an ardent supporter of the MAGA agenda. In Georgia, Trump’s candidates were both defeated in GOP primary runoff elections. The GA sixth district runoff saw physician Rich McCormick defeat lawyer Jake Evans in Atlanta’s northern suburbs. Georgia’s tenth district east of Atlanta featured trucking executive Mike Collins toppling former Democratic state Rep. Vernon Jones. Both of the runoff election winners are supporters of the MAGA agenda even though they failed to secure Trump’s endorsement.
The debate about Trump’s power with the GOP base formed the backdrop of the election analysis Tuesday night. Soon after, a new poll from likely New Hampshire GOP voters put Florida Gov. Ron DeSantis narrowly ahead of Donald Trump, a major shift from the 2021 polling. Intrigue about DeSantis challenging Trump grew even larger when he decided not to court Trump for a reelection endorsement, when back in 2018 DeSantis was victorious in the GOP primary largely because of Trump’s backing. Now DeSantis has large popularity with the Florida conservative base, high statewide approval ratings, and a $100 million war chest for his re-election campaign in a strong general election environment for Republicans. According to insiders, Trump would grant DeSantis an endorsement if he wanted it, after reports of a growing rivalry between the two. As DeSantis continues to grow in national prominence, a 2024 challenge to Trump could be on the horizon.
There is more news from Uvalde, Texas about the police department coverup of the events surrounding the recent mass shooting. Police have tried to hide information after a lone gunman slaughtered 19 children and two teachers in Robb elementary school where he was for over an hour. During a Texas state Senate hearing, a top Texas law enforcement official stated that after three minutes of the shooter being in the school, there was enough police officers and equipment to gun down the gunman. Another damning report came out about the arrest and detainment of an officer husband who tried to storm into the school when his wife, a teacher, was bleeding out. Additionally, it has been confirmed that the site of the shooting, Robb Elementary School, will be demolished so a new one can be built. For those who might have missed other shocking reports of officer misconduct, they have been featured throughout Breaking Points programming in the past month since the massacre took place.
Over the past month, a bipartisan group of Senators has been working on gun control legislation after widespread outcry came following the Uvalde tragedy. The agreed upon package cleared a procedural vote in the Senate 64-34, paving the way for it to be passed. If it makes it out of the Senate, it’s almost certain to get through the House to President Biden’s desk for signing. The successful negotiations left conservatives gun rights supporters fuming, including Donald Trump who lambasted GOP Sen. John Cornyn from Texas as a RINO for leading the party’s side of the negotiations.
The Federal Reserve last week rose interest rates by .75%, the largest single increase in almost 30 years designed to combat inflation. This decision was viewed as necessary by some economists to curb rising demand, with other analysts expressing concerns about the Fed generating a recession without combatting supply side inflationary pressures. Senator Elizabeth Warren (D-MA) asked Fed Chair Jerome Powell about these concerns, and in her questioning he conceded the prices of food and gas will not be impacted by the Fed’s rate hike. The economists on the other side of the debate believe the Fed needs to keep rising rates further even though it will bring high levels of unemployment. Top Clinton-Obama economist and WH official Larry Summers expressed belief in a 6% unemployment rate for 5 years to bring inflation down, or one year at an astronomical 10%. His proposal received criticism for the sweeping effects a recession of this nature would have on the working class already facing difficult economic circumstances. His proposal leaves the supply side out of the debate by ignoring how interest rates going up would crush investment in the economy when it is needed most to build supply. To address problems ranging from infrastructure to health care to manufacturing, large investment is needed from the government and private sector. High interest rates will blunt the long term approach needed to invest in these issues while crippling demand, wages, and hiring. More on the supply problems with the Fed approach will be provided in the guest segment later in the show.
The focus of today’s media segment is MSNBC, because the task of defending Democrats at all costs is becoming increasingly difficult for pundits at the network. A guest on a recent segment criticized Americans for their complaints about inflation and instead told them to spend less, even if it means only having 2 meals per day. She believes the frustration towards the administration is misguided, telling people to ‘back off’ on their criticism. This approach has become more common in liberal media as Biden’s poll numbers steadily drop and elections come near. A strategy of blaming the American people for their problems from the wealthy comforts of cable news is unlikely to be persuasive or rescue cratering ratings.
In her monologue today, Krystal examines the fall of the neoliberal order after 40 years of domination. Countries all around the world are rejecting their political establishments and seeing generational political shifts. All of the turmoil points to the decline of the neoliberal economic order that has become dominant all around the world. Since the 1970s, global trade, corporate profits, investor returns, and endless consumption have dominated economic thinking. The implementation has come from deregulation, low taxes, welfare austerity, union busting, trade agreements, and other methods for expanding the reach of capital. It has been the bipartisan consensus in Washington since the fall of the Soviet Union, and its decline has been staring the world down for a few years. Sanders and Trump rising in 2016 against Hillary Clinton was a glaring indicator the old order had begun to crumble. Globalization reached its peak in terms of international trade in 2008, and has not recovered to pre recession levels. Right now, protectionism is no longer a dirty world and globalism is out of fashion across the American political spectrum. Nonetheless, Joe Biden is President right now, representing the old system’s last gasp as he oversees a collapse with very little to offer in terms of solutions. Like Jimmy Carter, Biden is presiding over a transition into a new era that remains to be identified. Carter was the bridge from the flagging New Deal to neoliberalism, and now Biden is the bridge from a collapsing neoliberalism to whatever comes up from the wreckage. The rise of China in the geopolitical order, a resurgence in leftism around the world, America becoming more open to using government power for national interests, covid pandemic acceleration, war in Ukraine, climate change, and the Fed engineering an economic paradigm shift have all contributed to the fall of the old world order. The fracturing taking place in the world and the supply chain instability driving inflation puts the future of global markets in peril. With globalization not living up to its promises and the cheap money economy coming to an end, another economic crash will come and wreck the neoliberal economy as we know it.
Domestically, both sides are wrestling with how much to deviate from the status quo. Republicans are beginning to use class centric language to rebrand their party for a growing working class base. A reaction to cultural liberalism is bringing more working people into the GOP fold, and soon they will be pressured to deliver. Democrats are burying the Bernie left and the young enthusiastic base fully on board with disrupting the existing system. Their plan is to crush the youth base and then pressure them into voting for the Democratic establishment against the Republican of the day. A risky bet that could lead to the demise of the Democratic party with major losses coming in 2022 and 2024. There is no younger embodiment or rebrand coming in to save the neoliberal order, and we’ll have to brace for what comes next.
After the monologue, Krystal and Saagar take a deep look at the times like the present when periods of great stagnation came and leadership did not rise to the occasion. The country is headed to a new era and last try of managerial neoliberalism under the Republican party without fixing underlying issues. Another structural crisis will shatter it even further unless something happens to change the trajectory. A different order could mean a better one after all of the brutal destruction but it’s truly a wild card to see how America responds to another recession.
In Saagar’s monologue today, he reflects on the 1970s again to look back on the idiocy of Biden’s gas tax plan. The gas issue more than any other problem was what sunk Jimmy Carter in 1980 because the Iranian revolution drove America to gas lines, gas rationing, shortages, fights, and more. That level of chaos is not happening today, but the level of failure is resembling a time when the likes had never been seen before. The handling of gas prices has been a disaster, with supply being kept down by sanctions and no solutions being pursued at home. High demand and constricted supply resulting from the sanctions package and wall street investors restricting output is spiking gas prices for Americans. The plan so far is relying on the Fed to nuke demand and destroy the economy to tamper inflation. Biden’s contribution is to suspend the federal gas tax for three months consisting of the summer driving season, temporarily saving consumers 18 cents per gallon until the price is driven back up. The administration had 18 months to come up with a plan and the best they could do was take 18 cents off gas prices. What will result is a stimulation of demand during driving season when it’s already hot and do nothing about the supply, driving up prices even further. New York State already tried this policy on a state level and the result was a very short lived price decline before it surged upwards again.
Furthermore, refinery capacity is being stretched to the max meaning the supply crunch has nowhere else to go. The spike in demand would be pocketed by the oil companies and the temporary mild savings on gas by consumers would be erased. Essentially, nothing will be done by gas prices until the supply side is addressed, including with a profit windfall tax. If you take profits away, oil companies will resort to cost cutting and supply will be constrained even further to ensure investors get their money. It feels good to pursue plans to address problems, the issue with this mentality is that gimmicks like a gas tax suspension end up doing more harm than good. It is an indictment of Biden that he has nothing else in his agenda and will not rise to the moment.
After the monologue, Krystal and Saagar discuss the flaws in Biden’s gas tax idea that will end up giving more money to the oil companies. All the White House has done to the oil companies is ask them to be patriots in a letter and in press briefings. His whole gas tax proposal is about messaging considering the lack of interest in Congress and internal reports about the purpose of the plan. The problem for Democrats is not a messaging problem, it’s a reality problem; they only appear to have an interest in tackling it with fake solutions.
Krystal and Saagar are joined by economist Skanda Amarnath, the Executive Director of Employ America. They are a research and advocacy organization fighting for full employment. The ‘break glass’ proposal from Employ America for how the Biden administration could tackle inflation is generating plenty of press buzz because of its depth and imagination. The plan is built around the Treasury Department utilizing the Exchange Stabilization Fund to target accelerated supply and insure risk for critical producers. By using the ESF to establish a Supply Insurance and Acceleration Program, investment deficiencies and local supply issues will be filled in a time of historical uncertainty. The program would provide oil insurance for producers to ensure they do not suffer from a price crash from supply increases to the market. On the other side, financing investments into building capacity would overcome fears about losses, particularly with interest rates increasing. This points to the supply side concerns not being addressed in debates about Fed interest rates being raised. When the Fed tightens the money supply, the supply side impacts come by increasing the cost of capital, risk, and replenishing inventory. A much better approach would be to secure resilient investments in vital commodities to tackle the supply side pressures causing inflation.

Categories: Media

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