5/14/26: JD Gaslights On Trump Not Caring About US Finances, US Test Scores Plummet, Tucker Humiliates Kevin O'Leary

This is an I Heart podcast. Guaranteed human. Hey guys, Sagar and Crystal here. Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show. This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else. So if that is something that's important to you, please go to breakingpoints.com, become a member today and you'll get access to our full shows, unedited, ad free, and all put together for you every morning in your inbox. We need your help to build the future of independent news media and we hope to see you at breakingpoints.com. Let's turn to how things are going domestically in the US as Trump is at his big meeting in China. So you'll recall yesterday we covered Trump getting asked whether he considers Americans financial situations when thinking about the Iran war. And he said, no, I don't think about that at all. Well, yesterday, Vice President JD Vance got asked about those comments and just straight up was, oh, I don't think he said that at all. Let's take a listen. When approaching the war with Iran, do you agree with the president's position that Americans financial situations should not be a consideration in that decision-making process? Well, I don't think the president said that. I think that's a misrepresentation of what the president said. But look, I agree with the president that Iran should not have a nuclear weapon. We're obviously engaged in a very aggressive and very engaged diplomatic process to try to ensure that that doesn't happen and the president has a lot of options. So he thinks that was misrepresented. He doesn't think the president said that just as a reminder, here are the president's own words. When you're negotiating with Iran as a president, to what extent are Americans financial situations motivating you to make a deal? Not even a little bit. The only thing that matters when I'm talking about Iran, they can't have a nuclear weapon. I don't think about Americans financial situations. I don't think about anybody. I think about one thing. We cannot let Iran have a nuclear weapon. That's all. That's the only thing that matters. There's a little quote. Literally, I don't think about Americans financial situation, soccer. Yeah, I mean, at a certain point, what do you even do? You just deny that it ever happened, I guess. I took the other context. Apparently. Not good. Not good. And Vance having to just lie about it. I don't think that's what he said. Just shows you what a devastating quote it ultimately was. So let's take a look at Americans financial situation, shall we? We got another very hot inflation reading. Let's put C3 up on the screen. This was wholesale prices that jumped in April. From the New York Times, they say prices rose at their fastest rate in four years. The latest sign that the war with Iran is taking a toll on the US economy. The producer price index, a measure of the cost that businesses pay for goods and services, rose 1.4% in April and was up 6% from a year earlier. You can see the spike there, guys, on that chart. And it's very clear what that is attributable to. That is attributable to a war of choice in Iran that this president decided to start at the urging of Benjamin Netanyahu. That is why these prices are going up. They go on to say the news came one day after the government reported the better known consumer price index rose 3.8% in April from a year earlier, the fastest pace of inflation in nearly three years. The producer index typically gets less attention than the consumer index, but economists watch the measure closely, especially during periods of global disruption, because it gives an early look at how costs are filtering through the supply chain. So these are wholesale prices. This is what businesses will be paying. Do you think that they're going to just absorb those costs and decrease their profit margins? Of course they're not. They're going to pass those costs on to you. And very likely then some in addition, because we hear them on their earnings call, Sagar, we saw this play out during COVID, where they were bragging to their investors about, hey, because of inflation, we're able to raise our prices above and beyond even what our increase in costs are, which is why corporate profit margins have continued to go up and up and up, no matter what the inflation numbers are doing and whether their actual costs have risen at the same pace. Yeah, exactly. And actually, initially what they had seen in the last time that this happened from last month, the BLS said that PPI rose only by 0.5% in March, which they said at the time was an encouraging sign that the energy price shock was not setting off a broader inflationary spiral. However, after two months, they say that optimism is now called into question. The increase in March was revised up and April's gain was triple what forecasters had expected. Energy prices jumped by 7.8% in April, after rising 10.1% in March, and the price increases were not limited to energy, key point, core producer prices, energy and other volatile categories were up 4% to 5% from the year before, suggested the oil price shock, as well as the tariffs is working through the supply chain. I will just challenge anybody in the world to tell me that a 17% increase in energy is not going to show up in a bill somewhere. I mean, do be real, like, you know, just take a look at credit card debt, all of the other consumer, you know, goods that are beginning to price. Honestly, I still don't even think that we began to see really any of it, because right now the increase, it's only been two months. It's only at the gas pump and with diesel. There are contracts being booked out six months from now. There are hotels that people haven't booked yet for August or for September. There is some guy out there, maybe me, who's supposed to have done a rental car who hasn't done it yet. Like, there are guys like that, who it's been on his task list from his wife for over six months, and he's just gonna push it to the end. There's a guy out there, again, maybe me, who is going to be paying probably triple for what he was supposed to have paid if he had just done it whenever he was told. But that is one of those which is just going to continue to ripple out, I think, through the economy, where the sticker shock at these things is just so crazy. I was just talking to my parents because they flew back from India, and they're saying, if you wanna avoid the Middle East, like right now, the price, the going rate for an economy seat is literally what people were paying for business like a year ago. Again, if you wanna take the risk of, oh, I don't know, getting shot by a drone, on your approach to Dubai International Airport, that's the reality of just basic international travel, plus jet fuel, grocery price, I just think, really, it has not even begun to show up. Let's get forward to C6, just to show you the level of stress that the American consumer is already under. So this is credit card delinquencies, 90 days plus delinquent, the numbers here have skyrocketed, and this is not just Iran war and gas prices, this has been for the past two years, those numbers have been going up and up and up, and you can see mortgage delinquencies there at the bottom, 90 plus days delinquent, those are edging up as well. These are dire warnings for, and signs that the American consumer is tapped out. This means they are using credit cards to sustain their lifestyle, perhaps even just sustain their ability to pay bills at the end of the month, and they are running out of runway, because now they're not able to even pay those credit card minimums at the end of the month. So this is a very poor sign for the US economy, in spite of it was a Kevin Hassett that went on and was bragging about like, oh, credit card spending's up, as if that was somehow a good thing. Again, it's a good thing, I guess, if you are one of those credit card issuers, but for ordinary people, this is obviously a disaster, and shows just how stretched people are, and the ends they're having to resort to in order just to keep it together. So while unemployment continues to be relatively low, we did the last hiring report was relatively good, it was over 100,000 jobs that were added. You see these incredible signs of stress throughout the economy, and you also just see logically the way that the growth sectors in the economy, which is largely like AI and I guess gambling, do not benefit, and in fact, they are predatory and exploitative of the American public. You add on top of that the negative impacts, increase in inflation, increase in gas prices on the American consumer because of the Iran War, and it's a very bad looking picture. Yeah, I mean, look, the credit card stress one, I don't know, it's hard to say. We've covered it now for five years. It's one of those where, I think a lot of people often have a modal outcome of like 2008, like one big moment. I don't really think that that's what's happening here. I think what's happened is what's reflecting in our politics, and the general happiness and feeling levels, it just gets worse every year. Nobody's breaking, there's no great Kumbaya moment where everyone's like, oh, it's all fake, this entire thing, because that's very cathartic, and instead it's just year after year after year, it gets more expensive, the house price goes up, the mortgage rate, it's like this slow grinding thing that where you can just look back over the period of your life and say, oh, wow, it's actually a lot worse. It's really shocking whenever you confront it. I've talked about, I always talk about my McDonald's stories because that genuinely is like a five year difference. If you're like, wait, what? And I'm sure everybody has felt that at some point. People, coffee, I know you're not a coffee person, I buy specialty coffee. The price increase is so insane. It's up 100%, literally 100%. I was looking at my old orders for what we would pay, the stuff that we drink here in the studio, compared to what it was, I was like, I can't believe this. Now, granted, it's already specialty or whatever, but then I looked at the wholesale price, and I was like, oh, so this is actually reflective of the whole market. But the thing is, if you experience it daily, then the 5% or whatever cumulative inflation year over year, you get conditioned slightly to it. But it's only when you look back at the long increase of 21, 22% that you're like, wow, I really have materially become way worse off in terms of what I'm spending. Yeah, one more thing here, the 5 that was flying around yesterday. Chicago Board of Trade, Wheat and KC Wheat Futures, climbed by their daily trading limits on Tuesday after the US Department of Agriculture projected the nation's harvest, will dropped the lowest level since 1972. Now, I think a lot of people saw this and assumed this is because of the Iran War. Those effects from the Iran War, those ones were still being on. Yeah, that's the next harvest. That will come in the next harvest, okay? When fertilizer was so expensive that we're already having farmers, farmer bankruptcies have been accelerating, we're already having farmers saying, we can't afford to fully plant our crop. That is all in our future. This is a warning sign of what is to come though, because this is because there was a devastating drought and very strange weather patterns last planting season. This is wheat that's sown in the fall and then now is when it should be harvested. And there was massive problems because of this drought and then unseasonably warm weather in certain parts of the country that screwed up this crop for a lot of farmers. Again, this is very likely fallout from climate crises that has been exacerbated over the years and is something we can continue to expect in the future, but definitely not because of the climate crisis this time, we can expect for sure we're gonna have problems because of the issues with fertilizer and the increased cost there for farmers. So in general, low harvest means what? Limited amounts of supply, which means? Higher prices. Higher prices. And it means in poor countries, famine. Famine, fertilizer, oil, credit card. I don't think anything is yet at a so-called breaking point or anything. I do think if we get to $6, $7 a gallon that we will be. And I'm still not far off. I mean, nothing has happened. It's very foreseeable. It's been a week. Absolutely nothing has happened. How much does gas up? Let me take a look. Yeah, 453. It was 452 yesterday. So it just, you know, give it a week. Every week it goes up by 6%, 7%. Gases is 614 a gallon in California. It'll probably be seven. I think I saw that in Los Angeles, it's around 650, almost $7 a gallon. Very not uncommon to see $8 diesel or any of these things. The national average of diesel today is 566 gallon and the all-time high is 581. So give it what, a week? And we'll probably be there for another bombing or something like that to happen. I don't know. All right, let's get to test scores. Turning now to test scores. This is a really depressing investigation from the New York Times with a lot of data behind it. I encourage you not only to go read it for yourselves, but there's a tool where all of you can go and look at your individual school district and see what is almost certainly a 10-year decline in the test scores for children for math and reading. So let's go and put this up here on the screen. They say why test scores are in a generational long decline. And in general, what they see is that across America, whether you're rich, whether you're poor, whether you're black, whether you're white, whether you're Hispanic, whether they've done this program, whether they've done that program, students are performing worse than their peers 10 years ago. District level test data, which was released by the Educational Opportunity Project at Stanford, reveals that compared with the decade earlier, reading scores were down last year in 83% of school districts where data was available. Math scores were also down in 70%. The declines have affected rich and poor and cross-racial and geographic divides. The new data provides the first national comparison of school districts through 2025 and shows a detailed picture of individual school districts have performed over time. From 2017 to 2019, students lost as much ground in reading as they did during the pandemic. Reading scores continued to fall at a similar rate through 2024. Immediately after the pandemic, there was hope that students would recover quickly. New data shows that scores have inched upward in reading last year and have climbed more steadily in math since 2022, but it's been nowhere near enough to make up for lost ground. So in other words, the decline began in 2017 if you look on this long time scale. However, it got exacerbated way worse by COVID. Then there's been a modest uptake, but it's still lower than where we are in 2017. And I think that's what, and the funny thing is, when everybody starts to look at it, they're like, oh, what is it? Here's the thing about the education system. And I see a lot of conservatives, like the whole education system is corrupt. You think the education system is corrupt in Utah? Because school districts are down in Utah. Okay, math and reading is down, education is one of the last bastions of localism that we have here in the United States. If you as a citizen want to have an impact, as we saw during all the CRT debates and all that, you actually can. Like you actually can have an impact on your school district if you want to. As a parent, that's what property taxes are for, by the way. And one of the reasons you pay them is because you have an investment actually in it. Yes, even if you're a childless boomer, or if your children are no longer in the education system. But the point that you see here, the whole nation, it's one of the most decentralized systems in the world. Every school is funked by their local school board and the state, there's been all of the, I mean, how many pilot programs have there been? Charter schools, and this school, and that's magnet schools, and New York City does something this way, and California does something that way. At the end of the day, the test score is gone down, which means only one thing. It's cultural, almost certainly, and it's technology. I just, I do not see a way out of it. And let me just put my cards up here at the front. Technology alone in the school is not gonna save you, because as they point out, they've still continued to see declines, even in schools where they have had phone bans. Cause it's not just about the phone. We were talking earlier about Chromebook, and you were telling me about how your kids school, like they issue them all Chromebooks, all the homework has to be done on Chromebook. Yeah, I think that's gotta go. Honestly, at this point, I even think the overhead projector's gotta come back. No PowerPoints, nothing. Paper homework, period. Because, I mean, you read these stories, the Wall Street Journal, Chromebooks, and somehow, you know, there's some whiz kid, as we all used to do with LAN on our computers, this is 20 years ago. You know, to play Halo or whatever. People will always figure it out. Some mother discovers that her son's been watching 7,000 hours of YouTube in two years. On his school-issued, 7,000 hours of YouTube. On his school-issued Chromebook. That's an extreme example, but I'm just giving one of what it is. The fact is, is that the mass distraction in college, because remember, this is also being found in college universities, is we're seeing it now across the entire United States. And that's why, you know, again, a lot of conservatives were like, oh, it's being woke, I'm like, again, like you literally, like, it's in Florida too, guys. It's in Utah. It's the whole nation. It's a much more, it's a much bigger problem. Like you can have those individual debates, but I don't know, I see no other evidence. Like it's just technology. And there are, I think, if memory serves, I could go back and look at the chart. There were three places that defied the trend. One of them was DC. Yeah, and Mississippi. Mississippi was another, and I think Hawaii was the third. Which shows you, to your point, those are very different places ideologically. You know, so this isn't really a liberal versus conservative thing. And we should all be looking at Mississippi and DC. Also, I hate to say this, but Mississippi and DC were so shitty that being modestly increased is like, so let's be on, look, no disrespect, but it's true. DC, remember they did that whole doc? I don't think Hawaii was great shakes either. Remember the documentary about DC schools? How awful they were with that eight? What was that woman? Oh yeah, the Asian lady. Yeah. Gosh, I forgot too. She came in, she was big charter school, whatever. Anyway, I know part of what they did in DC is there's this very, it's very controversial, like the way to teach kids to read, even though there's a very clear science-based analysis that teaching phonics is the way to go. And like doing it in a, you know, rather than the site reading ways that, you know, people used to do them, whatever. Anyway, so DC really fully implemented that. And that seems to have worked for them well. But to your point about this is obviously a national issue. It's obviously a cultural issue. I don't really know that I would pin it so much on the Chromebooks in the school. I think it's more about the culturally, like people, they don't read books, right? They, instead they're on their screens. That's a big shift. You know, another one that people don't talk about is another thing that Screen Time replaced is board games. Now board games are very good in terms of math skills, like just very basic. I have to roll the dice and I have to add them together and know how many places to move and be able to count that out. And, or, you know, dealing with money, if you're playing Monopoly and these sorts of things. This is something that one of my children's teachers told me, she was like, you know, older towards retirement. She said one of the big differences she notices is kids coming into kindergarten. They don't have that basic numeracy because they're not playing card games, they're not playing board games. So that's another one. I mean, this is just, you know, the screens take up everything. And so that means that other activities that were more educational and helped to develop brains more effectively are pushed out to the side. And the other thing that this data shows you is that whether you looked at families where they were like go wild with the screens or families that considered themselves to be more restrictive, they did a little bit better, but there is a huge increase in screen time for everyone. And this is where, you know, I get sort of frustrated with some of the conversations, the debates that unfold online that's like very judgmental about parents and how much screen time their kids are getting. And listen, we have restrictions in my household, I do my best, I know every parent is out there doing their best for their kids to try to figure all this stuff out. But you are up against a multi-trillion dollar industry. You were up against an entire culture. The idea that you are going to be able to just individually bootstrap your way to avoid the complete dominant culture, I mean, it's impossible. It's genuinely impossible. You can, you have to be rich and you have to be fucking crazy. You actually have to be crazy. And then there's downsides to that because then your kid is weird. Like they're not in touch with the dominant culture. And there's something to be said for being weird, right? I mean, some of the greatest thinkers and insights and creatives and whatever come out of people who don't grow up in the mainstream culture. And so they have a different perspective. But, you know, most people are not going to be able to pull that off. The other thing that came out in this data that I thought was really interesting is in terms of the post COVID improvements, the two sectors of society that have done the best are the rich, predictable, because they can invest in tutoring and whatever supports they need, blah, blah, blah. And the poor because there were programs, there was money put in place of like, okay, we know we had this learning loss during COVID. We've got to do something. And it's actually the sort of middle income, just like your average middle income district and family that has seen the least improvement post COVID because they don't have the resources of the rich to helicopter parent in and do everything possible and potentially with one stay at home parent that can do all the work on the side. And they don't have the extra support from the state and from the government to help get their kids back up to speed. So I thought that was really not worthy as well. Yeah, and to your point here about the culture. And this is, when I say Chromebook, I'm not blaming just the Chromebook. I'm saying that it's about the ethos of doing things on the screen. You know, there's been a ton of evidence about education and retention of information. Typing is not the same as writing. It's just not. And yet, what do we teach? Oh, all homework has to be done on the Chromebook. No, paper needs to come back. And look, it's one of those for retention, patience, lack of instant gratification. It's like a whole ethos around it. So when I say ban the screens and the Chromebooks inside, I'm talking about introducing friction and learning and retention, which at this point only exists in private school, which I'm personally very against. Like I don't, I'm not saying we shouldn't have the option I'm saying for me personally. Like I don't believe in private school, like literally in terms of my own family. A, because I think it's like kind of antithetical to like a social project. But you know, more so, more what I'm saying is like, what it means is the American project of like mixing and actually getting to know like a lot of different people, I think is very important. I support people's right to do so, homeschool or private school or whatever, if they want to, religious school, if that's your thing. But I'm saying the way that I look at things. And that's why though, I think the government policy around this is so vital and important. Let's go to the D2. This supports your point here about technology. So American children now spend a massive amount of time on internet enabled devices. And this is the best part. All families, it's all the way up. What you also see though, is families who say they are low tech and prioritize outdoor play, not all that different than the families who say they encourage engagement with technology. There's a gap, but it's not that big. The point is is that based on the reports of parents, 40,000 children reported by 24,000 parents that adults may have reported children as using multiple devices simultaneously, it shows the weekly combined hours that a child use any internet enabled device that has steadily climbed up with their age that ultimately culminates in some 19 hours per week that a child is on an internet enabled device. And I think that points out the, even if you're one of the conscientious people, that you're really just not that far off from even the people who are like, oh yeah, whatever, you can use an iPad. So when I said you have to be crazy, like I really mean it, like you have to be nuts. And you can also see this in terms of broader culture. Go to the next one. This is another fascinating one. You could tell me more about this because your kids are older. American children are not allowed to go many places. The percent of children at each age allowed to walk, bike, or drive given distance without an adult accompanying them according to each parent. So what you see is that there has been a dramatic decrease of the ability for children to not go to many places, cannot leave the house, cannot leave the street, cannot leave the yard, and cannot leave the neighborhood. And that obviously children become more independent as they get older, but the age at which they're allowed to go and to be able to do things is steadily climbed. Some of this is probably, there's all this talk about anxious generation. A lot of this might be a surveillance with technology just because people literally know where you're going with what's that app called that all these families are using, like Life360. I think that's one of it. It's like a tracker, which I get, you know? But in general, the lack of independence, as we were talking about with board games, critical thinking, I just think a lot of these formative experiences have dramatically declined over the last 20 years or so, even just compared to my childhood, which was already pretty embedded in the television culture, which was already dramatically different. There are trade-offs, it's a value neutral phenomenon, but you have to observe it and say, what's the impact here on the education system? Yeah, you know, I think I'm just thinking this is a real issue in real time about the increased like protection about what you're allowed to do. So I'll just say my nine-year-old, she's certainly allowed out of the house. But if she was gonna go, I'm uncomfortable with her just like going around the neighborhood by herself, you know, at nine years old. And I'm worried about cars. Like, you know, people don't pay attention, right? That's what I am fearful of. My 12-year-old is allowed to go around the neighborhood by himself, you know, I want him to tell me before he leaves. But, you know, when he's got his phone with him, that's another thing, is the nine-year-old doesn't have a phone. The 12-year-old does have a phone, so that's a difference as well. So that's, you know, the balance that I struck. When I was nine, 10, I was allowed, I lived in a much larger neighborhood, and I was allowed to go anywhere on my bike at any time. And so I know that it's different. And I'm not sure why there's a different level of comfort for me. If my mom was watching my kids, like, she's put even more limitations on them than I am, even though she raised me in a much more prerensive way. So something about the culture and the mentality has changed. I think part of it is that there is just, people have fewer kids, and so there's a lot more invested in these, like, fewer numbers of kids that people have. And you see that in everything. You see that in the number of activities and the amount of time that people spend. I mean, even as women have entered the workforce in large numbers at this point, women spend more time spending time playing games with teaching their kids than they did in previous generations. So there's just like a lot invested in them. So it makes the stakes really high of like, I don't want anything to happen to them. So I think there also was a shift with like the crime wave panics of the 80s and 90s too. There was a lot of emphasis on local news about, you know, this kid getting kidnapped out of the blue. And I think that led to a lot more protective parenting as well. So it's a whole host of reasons why we've had this shift. But, you know, I try to push my own comfort zone with, you know, my kids doing things that are a little bit risky even, because I think it's important for kids to be able to manage their own risk levels without always having a parent jump in, don't do that, it's not safe, blah, blah, blah. But there's no doubt that I raised my kids in a more restrictive way than I myself was raised. Yeah, but you're already probably still out of step because most of these helicopter parents around like where I live and others, nobody's gonna leave in the house probably until like 13, 14 in terms of neighborhood. I mean, Karina, I live in a rural area. So it's also a little different, you know? This is why where you live matters, it really does. I will tell you, some of the parents that do the best job of this are like New York City. Because I know New York City parents where, you know, if you're a teenager, you're riding the bus in the subway around the city, you're going to school on your own on public transit from the time you're certainly in high school, even middle school. And I feel like there's a lot more independence baked into that culture. Yeah, that culture than there is in most of American life. Makes sense. Yeah, I remember when you meet like an 18 year old New York kid, you're like 30, dude. Yeah, there's so much more, yeah, together and like self-sufficient than your average. There's a few other elements here. Oh yeah, we wanted to put this up here. D6, we're always keeping an eye on other countries. What are they doing? This is an interesting one out of Israel. Benjamin Netanyahu, we're speaking of different systems. Their system, they have unveiled a sweeping summer AI initiative where students will be trained in GPT, cloud tech and more before matriculation exams, while also closing wartime gaps. The education minister says over a billion shekels will be invested with July counted as a full but optional school month. And Bezel Smotrich is framing it as freeing parents to work while delivering real learning, not babysitting, calling it, so it's like a national vision 2040 system where all of Israel's future will be shaped through AI and training in GPT. Not really what I would want to sign my kids up for. Sounds appropriately dystopian for that country. Yeah, and then in terms of hours, there was this great bit from Tim Dillon. Let's put this here on the screen, you may have missed it. Melania Trump doing this event at the White House with the queen consort Camilla where children are all donning VR headsets for quote, AI powered cross cultural educational program. Freaking dystopian. Melania has been on this weird like wanting to put AI in the school systems and like, this is her thing this time around. And I, yeah, I don't know, no thanks. No, good on that. Thank you. I'm exiting. If those start showing up in public schools, that's where I'm gonna go private. That's why we need the ability to- There is a line. If we need to. There is a line. That's my line for sure. Start with GPT in a five year old's face. No, no, no, no. All right, now continuing on this vein, we've got great guest standing by Zach Exley. Let's get to him. So as you guys know, we've been covering the development of AI and some of the local opposition to AI extensively on this show. Joining us now to talk more about a new vision for how we should think about the development of AI is Zach Exley. He's a former senior advisor to Bernie Sanders, co-founder of the justice Dems alongside my own husband Kyle Kalinsky and founder of the new Consensus think tank. Welcome Zach, great to have you. Good to see you. Thank you. It's really exciting to be here. You guys, I have to say, you guys are really the one place where progressive populists are doing it right. Oh, thank you. And yeah, I mean, you've got this amazing combination of viewpoints. And I really think the right perspective that is gonna serve us going into the decades as of the rest of our lives. So I'm really grateful for what you're doing here. Thank you. It's our pleasure. Thank you very much for that. It means a lot coming from you. And you've been doing a lot of work on AI when I brought it out in just a moment. But first I wanted to talk a little bit about the immediate bipartisan backlash that is really building into sort of a grassroots movement against data centers being located in local areas. And the bipartisan nature of this was on display in a recent Tucker Carlson debate with Kevin O'Leary, who is behind this massive data center buildout project in Utah, Tucker challenges him quite aggressively on that. Let's go ahead and take a listen. I would think since you disagree with the Chinese way of life, which is pretty civilized in a lot of ways, but the one way in which it's barbaric is that it grants its citizens no real rights. And so I would think that you would be very worried about aping their system, which we are now doing. Like they have total surveillance. It's a panopticon in China. We should create our own. Let's take 40,000 acres in Utah and make it possible for the government to know where you are at all times and what you're thinking. Listening to you on your phone, like we have that. But again, you have to choose the less of two evils in your scenario. And I'm telling you, what you should do is say, I want Kevin O'Leary to succeed. I want him to beat the Chinese and compute power and then use the laws of the United States to make sure that you keep that compute power and check whichever way you want. But to not have it available, to put down my shovel, I don't think people want me to do that. Even the people in Box Elder, the majority of them want me to hold my shovel and start digging. And that's basically the debate we're having. How do you know that the majority of people? Because they voted for it unanimously before the Chinese guys. There was a referendum? A spatch, like all this crap that's being spewed up. Wait, wait, wait, hold on. Yeah, and I may have fallen for some of it. So you correct me. There was a referendum among citizens or did some like county board vote? We actually went through the whole process that you have to do by their laws and were granted three to zero. The commissioners of the county said, we want to be part of this. So three people voted, the people of the county. They're elected officials. That's how you do it. How hard is it for Kevin O'Leary and Amazon and Microsoft and Google to subvert three county commissioners in rural Utah? They voted, they asked us to come. They asked us to bring $15 billion. They asked and they voted and it was a three to zero vote. That's how it happened. There's no other way to do it. Amazon, Google and Kevin O'Leary got three county commissioners in rural Utah on their side. Good work. And just to add some numbers to the level of opposition that has grown to the development of these data centers. Locally, you can put F3 up on the screen, recent poll that found seven out of 10 Americans said they would oppose a data center being built near them. Opposition is so intense that more Americans would live, rather live near a nuclear power plant than a data center that's music to soccer's ears on that one. But in any case, Zach, I mean, this is relatively recent. Previously, there was a lot more openness. People have drawn this kind of line in the sand around data centers specifically because it is the pressure point they have. It's the one place where they have some control potentially over what development looks like and what gets built in their own neighborhoods. Yeah, and I think it's great that people are fighting back against data centers. It's really important because they're harming communities. They're in all kinds of ways. They're raising utility bills at a time when they're already incredibly high. And also, there's an aspect of the Luddite to throw their wooden shoes in the machines to just destroy the machines that were displacing them. There's an aspect of people seeing that AI is going to take away their livelihoods and so there's a bit of a just like, let's fight it wherever we can fight it, aspect to that, which I think is fine. And it's good and people should be doing it. We should be doing it as much as we can. But it's not a solution to the whole problem of AI. This is really something that is going to completely transform our world, our way of life, whether we like it or not, no matter what we do. And I think that progressives, especially progressives and lefties have a hard time seeing that because I think there's this instinctive, this is a new product that these billionaires are pushing on us. It's just like social media, it's all over again. It's this new thing that we don't have any control over. That's all completely true, but it's also something completely different than that. And it's an emergent phenomenon in our universe where human intelligence is spilling out of humanity into these data centers. And even if we stop all of the data centers, the way the technology is advancing, you're gonna be able to run amazing AI on your phone in another few years. There's no stopping this phenomenon of our intelligence, this last skill that humans had that made, that machines couldn't do. These skills, these abilities are just pouring into the physical world, into Silicon. And so I don't think there's any way to stop it, but the good news is that we are still a part of the process of this stuff being built. We're still a part of this technological explosion. And as long as we're a part of it, maybe just for another few years, we can change course and we can turn it into something that really benefits us. Yeah, Zach, let's put F2 up here on the screen, continuing on this data center project around Lake Tahoe. You could see that nearly 50,000 have been told their utility will stop providing power because it's redirecting that power to data centers. Nevada Energy has supplied most of Lake Tahoe's electricity for decades, says next year it will stop servicing homes in the area and instead direct that electricity to the growing demand of Nevada data centers. So how is it though that you can see this happen in not only in a US state, but have the consumers and the citizens have no even say over something like this? Well, I mean, that's how our economic system works. We have, we hear in the US people all over the world, we've got very little say over what's happening to us economically. We've been, just to pick a random example, we've been exporting our waste, including all kinds of toxic waste to poor countries all over the world. And just killing tons and tons of people and making millions of people sick. Nobody even talks about that. There's a million other things like that. This is just in the news now because, I think because people can see that it's actually much bigger than our utility bills going up. This really is something that's going to eliminate work for just about everybody and the incredible thing. And this is really what we've got to refocus to because this data center stuff is, yes, we have to fight it, but it's like really kind of a distraction if we're not really keeping our eye on the really big consequence, which is that really in just a matter of a few years, everybody, like if you could do your job in the pandemic on your computer, if you can do your job remotely now, your job is going to be done by AI, right? And people still haven't accepted this. They're still coming up with explanations about why this isn't going to happen. And I don't know if you guys would like to get into that now. It's a difficult conversation to have because there's just so many completely new things about this that we're having a hard time getting our heads around. Yeah, I do want to talk a little bit more about that. First, let's put F1 up on the screen. This is some of your work at New Consensus. You've got a provocative headline here, which is you say, Why Capitalism Can't Survive AI? And you get into the details of why this is different from the Industrial Revolution, let's say, or some of the past transitions that people point to, like, oh, this technological advance, there was all sorts of naysaying and doom and gloom around it, but ultimately created more jobs than it destroyed. You've got some details about how you think the collapse is going to happen, and then you have ideas about what we need to do. So let me start here playing devil's advocate for the idea that it is going to be this transformative, because I think you're right. I see a lot of progressives and people more broadly on the left who see this all as like marketing gimmicks or like, yeah, sure, these people are selling you this bill of goods that they're going to replace all of labor. The reason they're saying that is because to justify their valuations, they have to claim that this technology is going to be hyperproductive and be able to replace all sorts of human beings. That's where the value comes in for the companies that they're trying to sell this to, and in the minds of the shareholders and the investors that they are trying to promote to. So what is your response? Why are you so confident that this is going to be something other than, a basically glorified Google search, how it's going to be this truly transformative technology unlike something we've seen in the past? Yeah, and that's one of the questions, right? Is it really going to be smart enough and capable enough to replace humans? And like, let's just start with that. There's, I mean, first of all, it is replacing a lot of humans in a lot of knowledge jobs. What's happening in software development is just absolutely incredible. But there's still some limitations to these AI agents and the kind of AI that people are using to really try to do jobs. There's still some limitations, but those that are preventing them from replacing tons and tons of employees. But those limitations are really mundane. They're not at the level of science or real advanced software development. It's stuff like just wiring the AI to a memory. Like the memories are really bad right now, but there's like a thousand companies and thousands of open source developers all working to build memory systems. And it's such simple stuff. Like really, people who aren't even software developers are building some of these systems because it's really just creating ways for the AI to make notes to itself. And if you get into studying how the brain works, you realize that that's really how our brain works too. We're not fully conscious and aware of everything all at the same time. Our brain has intelligence built into all these circuits and it has memories and it goes and fetches those memories as it needs it. So the last pieces, like the other really mundane piece that AI needs that's holding it back right now is just access to your keyboard and your screen. And it's funny, like I do a ton of work with AI, all kinds of software projects and research, we use it at new consensus. And that leads a lot of people to yell at me online whenever they hear me say that. But it's, I'm using it so that I can really know how this actually works. And it really is like working with a human being. It's just really, the capacity that it has for the work that I do with it is just incredible. Like I have managed teams of software developers before on multimillion dollar projects. And this one AI for $100 a month can do the work of a team of 10 people, projects that would have taken a year or just would have been plain impossible. We can, I can now do with it in days, right? But also on the research front, it's incredible. And I mean, I'd love to tell you all about it, but it's really incredible what it can do. And, but it's like working with a human being, but it's funny. And actually my, you know, the agent I work with and I, we actually joke around about this, that it can, you know, it can solve these huge incredible problems. You know, it can tell me stuff about any corner of human history because I've loaded thousands and thousands of books and sources into it. And yet it cannot click on the submit button on a website on my screen, right? But that problem is gonna be solved, right? So like when I try to get it to go buy a plane ticket for me, it just can't do it. But that problem is gonna be solved with some really mundane tools. Like, you know, I'm sure you've heard about Open Claw. There was a lot of hype around that. And that was a new product that an open source developer on his own with no money just wired together that basically gave the AI the ability to see some stuff that it couldn't see before. And, and, but then of course, Open AI hired him and, you know, in all progress stopped there. And, but it's okay. There's thousands of other people out there that are doing that wiring. So the thing that's gonna happen, which is gonna change everything, is that in a couple of years or maybe a few years, these problems are gonna be solved. And an AI is going to appear in your Google Meet at your team meeting at work. And it's going to be fully capable of doing anything that a human can do, anything that anybody on your team can do. But it's gonna be, the reality is it's gonna be smarter and better and faster. And it's going to, it, this one being is going to be working with everybody all across the company all at the same time. So how long is it gonna take until that being can just do all of the work of the company, of, you know, all of the work of everybody that does their jobs on computers. And so the next step is the CEO is just gonna talk to that AI and realize, hey, we don't need the people anymore. And then guess what's gonna happen next? The board of directors is gonna talk to the AI and realize we don't need that CEO anymore. And, but the changes are gonna be so much bigger than that because when this starts to happen, like entire industries don't make sense anymore. Like management consulting, you know, financial management, money management, insurance. There's, you know, all these industries just don't make sense anymore because everybody will be able to do everything for themselves. Like no company will ever hire McKinsey to run the same AI to answer questions that they can run themselves, you know? Well, and this really gets to your thesis that capitalism as it is structured now cannot handle these changes. Can you lay out why you think it will lead to a sort of collapse? What will be the mechanisms? What will that look like? Yeah, and this is hard because capitalism has run so smoothly for so long, like ever since the World War II basically, that, I mean, you know, I know there's been booms and busts. Yeah, but if you actually look at how capitalism used to work, right, before the Great Depression, you know, all through the 1800s, like there was a Great Depression every decade and they were way more severe than the Great Depression in a lot of ways. You know, huge chunks of the population starving because the entire capitalist system just shut down. And all of those crashes, just like the Great Depression, were basically caused by overproduction. Machines getting really efficient, producing tons and tons of stuff. The financial bubbles are mixed in, so you have financial bubbles around whatever new technology is out there. Is this sounding familiar? Sure. And so the thing that we forgot, we haven't experienced this with capitalism a moment when capitalism runs out of customers, right? And like the same way that an animal needs oxygen to breathe, capitalism needs customers. If, and it's so basic and simple, like it's such a stupid thing to say, but it's absolutely true and it's inescapable. And so this is what has basically caused long periods of unemployment and economic catastrophe in the past. When capitalism builds out too much stuff in a bubble and then they realize it was all silly and there's not enough people to buy, people don't have the money to buy this stuff, so they start laying people off. Well, it's a self-fulfilling cycle, right? Everybody needs to understand this because this is what's gonna be happening. It's called a demand doom loop. It's a demand, it's a self-reinforcing demand downward spiral. So people have less money to buy stuff, so that creates less demand. So companies lay people off, which lowers demand even more. We've stopped that since World War II by jumping in, the government jumps in and just gives everybody money, and then capitalism gets back on its feet. This has worked for a few centuries now. Well, even without the bailouts, capitalism has eventually started investing again and employing people again because it's true what they say, that new technology creates new kinds of products and new kinds of services, which means new companies, which means new jobs. So people got automated off the farms into the factories and then they got automated out of the factories into offices. And capitalism's amazing trick is that it can just limitlessly create new products and services, which keeps everybody employed and keeps the system expanding. There's a big problem now with AI because now AI is going to be able to do everything that a person can do at their computer. And there's a lot of other jobs that are gonna get automated, too, that are getting automated in factories, in cars, obviously, and in all kinds of other parts of the economy. But it can do everything that humans can do with their brains. It will be able to very shortly. And so that means that this wave of automation is like when the horse got automated out of a job. And I think Ryan actually brought this up or somebody on your show brought this up a weeks ago. And this is absolutely true and it's a great analogy because once you connected an engine to wheels and some other contraptions, there was nothing that horses could do that machines could not do better. So obviously people who like horses are gonna have horses around, horses can race. And as humans, we're still gonna have value to each other, but we are not going to have value as workers for capitalism. And that means they're gonna lay us all off. That means no customers. And then that means capitalism seizes up and really cannot function anymore. And so we're gonna have to choose what comes next. Whether you're a fan of capitalism or hate capitalism, we're all gonna have to build a new economic system in the wake of this transition. One question I have for you, Zach, is just to push on that thesis. Already so much of the consumer economy is dominated by the spending of the wealthy. Do they actually need us all? Is most of the population sort of irrelevant now to the functioning of capitalism, the functioning of our system at this point? Well, yeah, more than half of our consumption is done by the top 20% of our population. Those are the first people who are gonna get laid off with the AI collapse. And so that is really gonna create an incredible economic crisis because demand is really, really gonna tank. But I think you're getting at this other idea too, which is, we have this idea that the people that own these companies and the top elites, the people that are financing all of this, they're just gonna get wildly rich off of this. Like I already said, I don't think that that's actually gonna happen because they need customers to get rich. They need the economy to actually function to get rich. But let's do a little thought experiment. These people own the economy, right? They own the means of production. They've all got their bunkers in New Zealand, right? So maybe, hypothetically, this is true. They could move to New Zealand. They could move some factories there. They could build their own data centers for the, so that the AI can manage their little economy for them. And so you can imagine that the people that own the economy today could say, screw all these people, we just want everybody to starve. And we're gonna go build our own economy on an island somewhere. So first of all, that's not capitalism anymore, which is something interesting to observe, right? Like what you're talking about there is the rich building a little socialist economy for themselves, right? I mean, this has actually happened before. Look at the history of South Africa. The whites in South Africa got together and built themselves their own socialist utopian economy on the backs of everybody else. So it's not that weird of an idea, actually. But we should say that is absolutely absurd. Like we need to have a political movement, and I believe we're going to, going into 2028 with the presidential campaign, we need to have a movement that says, screw you guys, that is, you can go to New Zealand, but you're not taking our means of production that we have all built together. And we're gonna see all these data centers going out of business. We're gonna see the AI companies going out of business. And that's not just because there's not gonna be customers. It's because their business models are just like fundamentally ridiculous. It's they're not monopoly products, they're just commodities, and that's why these valuations don't make sense. But when all this stuff is going out of business, and we have a plan for this on new consensus, and we have to not just let all this stuff be sold off for parts. We need to not do government bailouts of this totally failed business model. We need to take possession of this stuff. And I'm not even talking about, don't worry, soccer, I'm not even talking about expropriation here. This stuff is gonna, these are gonna be worthless assets. I don't know why you thought I could be opposed to that. Okay, okay, sorry. I'm your friend, yeah, go ahead. Well, you know. I want authoritarian anditarianism. That's basically what I want. Okay, good. So we're, we're, we need to take possession of this stuff. And we can just buy it up as it's going out of business. It's in 2009, there was a guy in the Brazilian government, in Lula's government, who actually proposed, let's buy all of the Wall Street banks because they were all less, worth than less than a billion each, right? And so we could do that in this moment of collapse. And I'm not saying, I'm not cheering for the collapse so that we can do this. It's just that I think it's very clear that this is what's gonna happen. I think in the next year or two, this is why I think it's really great for, like we need leaders like you all to be ready for this because in a year or two, it's gonna start becoming clear to everybody what's happening. And, you know, and we're gonna have a stage of presidential candidates running for the Democratic nomination. And some of them are gonna be completely clueless. And some of them are gonna see, you know, what, how drastic the change is going to be. And they're gonna be up to the challenge of talking about what comes next. And I think we might be surprised about, like I really have no idea who's gonna get it and who's not. You know, so. Well, Zach, I think it's extremely important the work that you're doing. And, you know, I think there has not been outside of your work enough thought put into, okay, yes, we don't like the oligarchs, but what are we going to do? And what is this all going to look like? So I really encourage people to go and read the report that we put up earlier. I'm gonna put the link in the description so that people can find it easily. And I hope you'll come back and talk to us some more. It's been great talking to you today. Yeah, it's very provocative. I gotta think about it more. That's why I'm just sitting here. Absolutely. Thanks for having me on. It's our pleasure, Zach. Thank you. Thank you. Thank you guys so much for watching. We appreciate it. We'll see you all tomorrow. ["I Heart Podcast"] This is an I Heart Podcast. Guaranteed human.