News Updates

Breaking Points: 10/24/22 FULL UNCUT SHOW Ukraine war, China’s party congress, midterm voting, student debt battle, more

Krystal and Saagar cover the Ukraine war, China’s party congress, midterm voting, student debt battle, inflation coverage, China’s mastermind, GOP economic calamity, & Rishi Sunak!

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Timestamps: Ukraine: 0:0028:07 China: 28:0837:15 Midterms: 37:1657:52 Student Debt: 57:531:05:23 Inflation: 1:05:241:11:13 Saagar: 1:11:141:21:46 Krystal: 1:21:471:32:49 Rishi Sunak: 1:32:501:42:33

UKRAINE
Tensions between Russia and Ukraine are only rising as the war goes on. Russian Defense Minister Sergei Shoigu claimed Ukraine will use a ‘dirty bomb’ to escalate the war in phone calls with foreign defense officials. Most notably, he had two phone calls with US Defense Secretary Lloyd Austin where he raised concerns about the bomb usage. A dirty bomb is not a Weapon of Mass Destruction but it can cause considerable disruption and harm to those in the area. British Defense Secretary Ben Wallace refuted the bomb allegation and cautioned against the claims being used as a pretext for greater escalation. The British reiterated their support for Ukraine and their desire to de-escalate the situation. Ukrainian officials slammed the Russian statements as absurd and dangerous, adding that only Russia is capable of using nuclear weapons in Europe. Shoigu did not present evidence to back up his allegations and none has been uncovered.
De-escalating the conflict is an admirable goal to set forth, but it’s unclear how serious the west is about it. CBS News reported on the US Army’s 101st Airborne practicing military drills for a war with Russia only miles from Ukraine’s border. They included in the report the unit’s intentions to not simply defend NATO territory, but to prepare for crossing over into Ukrainian territory. President Zelensky of Ukraine had submitted an accelerated application into the NATO alliance which was rebuked on entry by the United States. In an interview, Zelensky asserted that if Russia strikes the presidential office in Kyiv, the west needs to retaliate by hitting a Russian decision making center. A direct strike by the west in the heart of Russia would unquestionably escalate the conflict even further and could draw the US into full fledged war. Such a proposition was not ruled out by former Obama administration CIA Director David Petraeus, who floated the possibility of US intervention in Ukraine.
On the Russian side, Iran has become more involved with their war effort. The White House released intelligence demonstrating Russian officials visited an airfield in Iran to look at drones to use against Ukraine. Satellite imagery demonstrated drones being flown with a Russian transport plane nearby. Iran dismissed the Biden administration’s suggestion that Iran is interested in providing weapons to Russia. Vladimir Putin will be meeting with the Iranian and Turkish presidents in Tehran this week presumably to discuss military assistance. Damage by Russian assaults on Ukrainian infrastructure has already caused 1.4 million Ukrainians to be without power for the foreseeable future. The Ukrainian government reported 40 cruise missiles and 16 Iranian drones were used to conduct repeated air raids on Ukraine. Officials urged civilians to ration electricity and prepare for rolling blackouts in the coming days.
CHINA
A stunning display of force took place towards the end of the National Congress of the Chinese Communist Party. Hu Jintao, the predecessor to China’s current President Xi Jinping, was forcibly escorted out of the session against his will. He was visibly upset and confused as the dramatic scene was taking place. Video of the moment was captured and shared widely across western social media despite being censored in China. The week-long gathering of top officials happens every five years and leadership positions are decided at the summit by the CCP’s top brass. Xi Jinping’s coronation at the congress has drawn headlines because it formalized his status as ruler for life over China. Over the past ten years, Xi has consolidated power in the top ranks of the party by using anti-corruption investigations against his opponents and overseeing ambitious projects to grow China’s strength globally. Before him, the party was in a period of so-called collective leadership that began following the death of Deng Xiaoping and  leadership tenure of Jiang Zemin. Purging Hu Jintao and enabling the moment to spread globally could be a show of force for Xi who knows the world is watching. Footage of the congress and other CCP proceedings is rarely seen and it gets heavily censored on Chinese social media. Nonetheless, reports came in about Xi Jinping’s speech to the party centered around continuity and lacking in solutions to the problems the country faces. He did not back down from the ‘zero covid’ lockdowns generating mass public outcry for their restrictions on freedom. Further, he hinted at future aggression towards Taiwan and a larger presence on the world stage. For more about this, check out Saagar’s monologue below.
MIDTERMS
With less than three weeks until midterm elections, campaigns are in the final stretch and early voting is underway. Democrats are fearing the worst because of Republican gains over the past month. Concerns about the economy and crime have enabled a GOP boost in polls across the board. Over at center-left election forecaster Fivethirtyeight, Republican odds for capturing the senate have ticked up noticeably since the start of October. Democratic strategist Stan Greenberg warns the party’s messaging about the accomplishments of the Biden administration is its worst performing message. He believes the legislation passed in the past two years should be pitched as useful assistance instead of great solutions. Likewise, he thinks the party needs more economically populist ideas to pitch to voters, including expanding the child tax credit. It would mean expanding the party’s political pitch past abortion and safeguarding democracy from extremism.
Early voting numbers indicate a surge in midterm turnout driven by increased political interest and intensity on both sides. An NBC News poll shows election interest at all time highs for a midterm year and Republicans taking the enthusiasm edge over Democrats. Political polarization has exploded to the point where both sides believe the other will destroy America, causing them to put aside personal failures from a political candidate. Congressional preference remains tightly contested and President Biden’s approval rating is hovering around other presidents before they suffered a midterm shellacking.
STUDENT DEBT
A court has temporarily blocked the executive order by President Biden forgiving billions in student loan debt. The program has been thrown into limbo by an administrative stay issued by a federal judge while a motion from six Republican states to block the program receives consideration. Previously, the Biden administration promised not to begin acting on its promise until mid-November in anticipation of the legal challenges. They vowed to fight Republican challenges to the order and continue with their plan. A major question is whether student loan payments, set to resume on January 1, will return before debt begins to be forgiven. An estimated 22 million people have applied for debt forgiveness according to President Biden. Filling out the application takes a couple of minutes on the website and is accessible via phone. A separate legal challenge from a Wisconsin group was rejected by Supreme Court Justice Amy Coney Barrett because the group lacked standing. The primary obstacle for legal challenges to Biden’s loan forgiveness has been the inability for groups to obtain legal standing, where a party can demonstrate harm or connection to a given law.
INFLATION
President Biden’s Chief of Staff Ron Klain is not shy about using twitter to express his opinions. Like many of us, Klain actively tweets and retweets, with the caveat being that his opinion speaks volumes about the administration’s perceptions. He retweeted criticism of how the media is covering the economy from a progressive economist who replied to another tweet. The post came after a CNN pundit pointed out that inflation and the economy are voters’ top concern. His activity came after a strange gathering of liberal partisan twitter pundits took place at the White House on Friday. Hysterical liberal accounts with large followings and symbolic emojis gathered to meet in real life and be rewarded for boosting the current administration. Multiple users have been accused of grifting from their followers and parroting false information on a routine basis.
SAAGAR
Saagar spotlights the rise of Chinese political theorist Wang Huning to the number two post in the Chinese Communist Party. The party congress was a carefully choreographed event for Xi Jinping to be crowned ruler for life. At the same time, the people around Xi are extremely important to make note of. The party has all consuming power but the dividing factions and personalities within it play key roles in China’s politics. Wang received a promotion from the number five post to the head of the National People’s Congress, effectively placing him at number two or three. He is much more than a random cadre and his ascension should be terrifying for the west. The political theorist was the architect of many of Xi Jinping’s most notable initiatives from one belt one road to Xi Jinping Thought. Wang was forged in the cultural revolution and left college with the central idea that society’s cultural values must be controlled at all levels. According to Wang, the software of cultural values and political attitudes shapes a society as much as economics and institutions. These ideas were put forward by Wang in 1988 and broke from the prevailing consensus from China at the time. An essential component of this idea is for China to break from the west and develop its own core values. To get a better understanding, Wang visited America in 1991 and compiled his observations into a book called America against America. His observations are noteworthy because he writes about America’s undercurrent of societal contradictions and radical individualism that will lead to the country’s demise. He believed America’s economic system would create radical loneliness and a corrupted social fabric caused by commodification. If China were to adopt this system, in his view, the country would be headed to ruin. Wang’s book came in the context of the Tiananmen Square massacre when the CPP consolidated its power. From there, his career took off and in 30 years of power, Wang has railed against attempts to westernize China. He was mostly in the minority until Xi came to power and they fit like hand in glove. China’s obsessive control over its population is the central view guiding Wang and by extension Xi. Everything they have done from banning nighttime video games to zero covid can be explained by this notion. They are now entering the unprecedented situation against the US, a rival superpower with a completely different idea of how the world should work. The rise of Wang is a lesson that there is no amount of economic cooperation that would stop the authoritarian regime in China. They know absolutely who they are as America fulfills the Wang prophecy.
After the monologue, Krystal and Saagar analyze the writing from Wang in 1991 and how his vision has come to fruition under Xi Jinping. Having the scientific capability and population compliance to lock people down for zero-covid is the kind of control China is obsessed with regardless if it makes sense. China used America’s opening of markets to bolster their own industry and lift people out of poverty. Now they are reducing economic dependence on the US and making themselves a world power. They knew what was going on in America and set their own course that they had successfully implemented. His critique of American capitalism and culture has played out in real time, as shown in the numbers. Now the capitalist system is financialized and based on gaming the system rather than innovation or making new products. China is scary because they are smart and they care about much more than profits or economic figures. Collapsing the economy was not a deterrent for Russia going to war and it will not stop China. Global markets have created chaos and a lack of fragility that makes the west more vulnerable when it goes to war.
KRYSTAL
In her monologue, Krystal scorches the economic plans of British Conservatives and the US Republicans if they get back into power. Liz Truss resigned after only 44 days as Prime Minister because of her hardline market fundamentalism that promised tax cuts to the rich and lifting caps on banker bonuses. She tried to do her best Margaret Thatcher impression and things did not go well. Markets revolted in catastrophic fashion– the pound crashed and the cost for government borrowing spiked. This triggered follow on effects for large pension funds which faced margin calls and scrambled to firesale their assets. A bailout from the Bank of England was needed to rescue the market before Truss’ government ultimately backtracked. The revolt was swift and immediate, showing that there are no more upsides left to supply side ideology. Wild inequality, financial rigging, and economic calamities have discredited the ideology with everyone except for US Republicans. They are cartoonishly obsessed with Reaganomics in the exact same manner as Truss was across the pond. Zombie Reaganism cheerleader Larry Kudlow on Fox was enthusiastic about Truss’ budget and bragged about it at the time. It revealed how Trump’s economic policy was more of the same market fundamentalism despite all the talk of otherwise.
In the more immediate term, Republicans are planning to generate an economic crisis by using the debt limit to force spending cuts. They will hold the entire economy hostage unless they get their own Liz Truss style agenda. Engineering a fiscal crisis at a time of such economic precarity could be a disaster in its own right. Markets are complex and interconnected in ways that would make it difficult to predict what would happen. The GOP’s plan to weaponize the debt ceiling would be used to get more tax cuts by locking in Trump’s plan and adding more loopholes. Such a move would blow up the deficit by more than anything Biden has proposed and reward the corporations jacking up prices. Republicans are also committed to making life harder for working people by cutting social security and medicare. None of this is surprising and unlike Britain, foolish politicians here will not reverse course when set with a crisis.
After the monologue, Krystal and Saagar express dismay at the Republican economic plan and how Biden would probably be blamed for any economic calamity. Donald Trump’s lowest rated day in office was when the corporate tax cuts passed, showing the lack of popular support for them. Biden could strike a deal for Republicans in the way Obama tried to, but it’s a different moment and the Democratic base would not be on board with any deal. The Boehner shut down contributed to institutional distrust and cynicism about government from Republicans and the country as a whole. They can claim the government does not work and blame the president for the problem created by Republican gamesmanship. All of the economic systems are so interconnected that it is difficult to gauge what will happen next.
RISHI SUNAK
Breaking news out of Britain, Rishi Sunak will be the next Prime Minister of the United Kingdom. He is going to be the first person of color to hold the post and he ran against Truss in the previous leadership contest. Conservatives are totally split and have no path forward right now. They will not enact vast government intervention and the free market alternative has been discredited. Boris considered running for leadership and had significant support before he withdrew his candidacy because of the party’s lack of unity. Scandals sank the Boris tenure and Sunak was the primary architect of the Conservative party revolt against Boris. Sunak was very critical of Truss’ budget policy alongside the economic populists within the Conservative party. He was vindicated in stunning fashion yet it remains to be seen if the party can get behind Sunak. British Conservatives are at an all time low in standing and there is mass support for a general election to be called. He is facing massive economic problems, energy uncertainty, and a party in total freefall. Odds are against Sunak but we will see how he navigates the crises.
The planned guest segment for today had to be canceled at the last minute. Thank you for reading the most recent Breaking Points with Krystal and Saagar newsletter. Come back tomorrow for the next full show!

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