1-7-25 - 8am - Other Kinds of Debt and Free Speech on Facebook

Episode Transcript

Speaker 1 (00:00):
Hey, Michael, it occurred to me that offshore drilling is
extraordinarily expensive. One of the things I think that Donald
Trump is going to do right away is open the
Keystone pipeline. That will make a huge difference. And everything
is in place, it's ready to go.

Speaker 2 (00:22):
If they hadn't sold off the parts already like they
did with the wall.

Speaker 3 (00:25):
That's right. Well, except that most of that will be private. Well,
but even you know, private companies, rather than let that
those assets that they're in waste away, they may have
sold some of it off. But never forget don't and
don't shoot the messenger here. Don't forget that. Yes, he
could reinstate it and pull the plug or flip the

(00:48):
switch and say let's go. And what's the first thing
that happens the environmental wackos walk to the courthouse. Having
said that, just when you think about businesses, you know,

(01:09):
I can't decide whether to talk about Meta and Facebook
this morning. I talked about Meta and Facebook on Saturday
because they hired a friend of mine. Well, they elevated
a friend of mine to do something that's all over
the news today, and I may talk about it later,
but suffice it to say that Facebook is making changes

(01:34):
simply because of the election of Donald Trump and majorities
of Republicans in the House and the Senate, and we
can and they're pretty much opening up the platform back
and trying to get back to the concept of free
speech on their platform. Nobody's forcing them to do that.

(01:56):
They're just doing it because they're reading the tea leaves
and they understand what's going on. So every time I say,
but listen, Donald Trump might flip the light switch on
to restart the Keystone Pipe Excel pipeline. However, people are
going to march into the courthouse the moment he does.

(02:17):
In fact, I would bet you my Kingdom that right now,
they already have the petition, the complaint, the lawsuit written up,
ready to go. It just doesn't have the name of
the court, the jurisdiction, probably doesn't even have the names
the lawyers are going to use yet who or who

(02:38):
the plane is going to be. But some environmental WACO
groups somewhere has that complaint ready to be filed. However,
when you know that the country is as a whole
wants something, and I do believe a majority of Americans

(02:58):
do want energy in dependence and they want to see
these things restarted. They we voted to change the direction
of the country. Why, I mean, I've already forgotten what
was it like, seventy nine percent of Americans thought the
country is on the wrong track. Well doing Excel Keystone
XL pipeline is trying to put the country back on

(03:19):
the right track. So even though that may be slowed
down because of a lawsuit, the energy sector we're at
large sees that, oh, yes, we're still going to have
to face all of these you know, rules and regulations.
But there is a new sheriff in town, there's a

(03:41):
new posse in town. The rules and regulations are going
to start changing, and businesses anticipate that and they start
making changes, just as yesterday we talked about the minimum
wage and how the minimum wage, even though it may
not take effect until you know, next month, they are
already looking at their costs and already starting to make readjustments. Unfortunately,

(04:09):
readjustments like Okay, we're going to change your work schedule.
We're gonna lay some of you off, and some of
you are going to take on additional responsibilities. We see
that happening here in our company all the time. So
there will be just a change in attitude, which is good,

(04:33):
but there will still be these little battles all along
that we're going to have to face, which is where
it kind of a lead into what I wanted to
talk about this hour. And I don't want to be
Debbie Downer, but I want to talk a little bit
about debt, and not necessarily, although I will swerve into
a little bit about the ballooning government debt, I want

(04:55):
to talk about other kinds of debt because I don't
think we realize just how badly I would say the
past six years, because I want to include well again
five years, because we're in twenty twenty five now, so

(05:18):
from COVID to today, I don't think we realize just
how awful and how negative the impact has been of
government regulation, government overreach, government spending, all of these things government, government,
government has done, and not just necessarily in this country,

(05:40):
because what's happening to the economy in China is also
affecting us. The economy in Europe is affecting us. So
I want to walk through because as we enter this
new year, there are signs of a debt crisis. You know,
every president, you know Georgia, my old boss. So George W.

(06:01):
Bush walks into the Oval Office on January twentieth of
two thousand and one and is thinking to himself, education
is his number one priority. What happens nine months later, nobody, well,
I shouldn't say nobody saw it coming. But while we

(06:25):
were busy trying to now over here on this domestic
education front, they were busy pushing through all of their priorities.
What we were doing over here in terms of what
was not yet known as homeland security, what we were
doing was trying to reinvigorate all the national self defense

(06:52):
apparatus that we had in place, continuity of operations, continuity
of government, all the undisclosed locations, all of the comms
that we had, including how do we relocate Congress, how
do we relocate the US Supreme Court? How do we
keep the function the functions of government going on in
case of anything, whether that's a whether that's a catastrophic

(07:16):
natural disaster California unfortunately falling off into the Pacific, or
an earthquake, the New Madrid fault coming alive, or whatever
it might be, but some truly catastrophic event, well nine
to eleven happens, and suddenly the priorities change. Fortunately, because

(07:40):
the executive branch is so large, we were doing some
things in those areas to try to kind of reinvigorate
them because they pretty much died on the vine during
the Clinton years. So Trump's going to walk in and
Trump wants to you know, drill, baby, drill. He wants

(08:01):
to cut regulations. He wants to kind of you know,
revamp the Department of Justice, the FBI, he wants to
get rid of law fare. He has all of these
wonderful priorities that we all voted for, but kind of
simmering out here in the real world are some things
that nobody talks about. And I want to talk about

(08:25):
him for a little bit, just to give you some perspective.
And let's start with you know, when I do American financing,
I talk about people have had to put things on
credit cards. Delinquency rates among subprime credit card borrowers has

(08:48):
hit a staggering twenty two percent. That is the highest
level of delinquency since twenty ten. Over just the past
fifteen months, the rates have claimed have climbed by seven points.
Now that what does that mean in the real world.

(09:12):
That means there is a significant financial strain on a
demographic that constitutes almost a full twenty five percent of
the consumer credit market. That's all according to the Federal
Reserve Data. Subprime credit card borrowers now think about what

(09:32):
they've been doing over the past fifteen months. Well, they've
got to feed themselves. They have to feed them kids,
their kids, they've got to they got to pay for
the utility bill. Maybe they've got, you know, an old
beat up car. They're still making payments on whatever it
might be. Boom, things are going on to the credit
card and their delinquency rate is the highest it's been

(09:58):
since twenty ten, and just over the past fifteen months,
it's gone up by seven percent. It's reached twenty two percent.
At the same time that subprime has hit that delinquency level.
US credit card debt has now reached one point one

(10:19):
seven trillion, with some estimates saying it's one point three
trillion dollars. You at, the average interest rate on that
debt is now twenty three point four percent. That's a
record high. So credit card delinguatory rates for prime borrowers,

(10:42):
it is off the charts, absolutely off the charts. That's
an indication that inflation has hit them, even more so
than has been previously imagined. And at some point all
of those subprime credit cards are going to be canceled,

(11:04):
they're going to be revoked, and those are going to
be rite offs. Well why is that important? Well, that's
important because all those credit card issuers are to some
degree involved in the big banks. Well, what are the
big banks done? Commercial real estate? The commercial real estate

(11:29):
sector right now is under immense pressure, particularly office space.
Delinquency rates on commercial mortgage backed securities cnbs's commercial mortgage
backed securities for offices hit a record eleven percent last month,

(11:49):
surpassing the previous peak of ten point seven percent. That
you have to go all the way back to December
of twenty twelve to find a linkancy rate that high. Now,
do you give you some perspective on that. Delinquency rates
for commercial real estate is rising twice as fast as

(12:12):
during the two thousand and eight financial crisis. Over two
billion dollars in office loans became newly delinquent just last month.
That's a nine point four percent increase in two years.
Who controls those loans small banks. Small banks, which control

(12:38):
almost sixty eight percent of commercial real estate loans, are
really vulnerable. This reminds me of it would have been
the early eighties. Timer and I were driving from Oklahoma
City to the undisclosed location. It was July third. I'd
have to look up at maybe nineteen eighty two eighty

(13:01):
three somewhere in that area. And you know, we got
the radio on and the top of the hour news
comes on and the lead story is that the FDIC
has swarmed into Penn Square Bank in Oklahoma City and
they've shut it down. What's the significance of that. Pen

(13:23):
Square Bank was making loans to anybody. You walk in
and say, I'm an old and gas guy. You might
be a doctor, you might be a lawyer, you might
be a plumber, you might be an electrician, you might
be retired, you might be just fresh out of school,
but you wanted to get in the oil and gas
business because it was just Boom City. And Pen Square

(13:46):
Bank was making loans to anybody that walked in and said, look,
I got these eighty leases and I need to borrow.
You know, at the time, let's just say two million dollars.
I need two million dollars because I want to go
drill on these leases. They gave him the money. Most
of them were just absolutely worthless leases. But because it

(14:09):
was a boom time and everybody was in there, that
was the beginning of the end. In fact, I turned
to Tamar and I said, this is the beginning of
the end. The oil boom is over. And it was
I think this real estate delinquency and this credit card
delinquency indicate that while the economy is doing fairly good

(14:31):
right now, there's this undertow that could pull us under.
And it's credit cards and commercial real estate. But what
about another one? What about apartments? Look around? You know, Dragon,
I always fascinated you know, our view out our view
from our window has changed dramatically over the past, well

(14:56):
dramatically over the past ten years, but real drama over
the just the past. I'd say, what maybe two or
three years, Dragon, Oh yeah, it used to be a
golf course out there. Used to be a golf course
out there. There used to be the corner over where
the McDonald's is, There were several convenience stores. There was
just virtually nothing. And now I can't even see the

(15:18):
I twenty five Bellevue Interchange anymore because of all of
the mixed use development. There are high rises everywhere over here.
Serious delinquency rates for multifamily housing loans jumped almost a
full percent in November of last year. That doubled in
just eighteen months. Now outside of the pandemic, that is

(15:42):
the highest level since twenty eleven. Delinquencies are rising in
multifamily housing developments like I'm looking at right now. I'm
not saying these are, but like these arising at a race,
rising at a rate that is about the same as
the two thousand and eight two thousand and nine financial crisis.

(16:05):
Here we go again. Let's go back to credit cards
for a minute. Credit card defaults hit new highs last year.
We're just now getting these numbers. US credit card loan
defaults reached their highest level since twenty ten. Lenders wrote
off forty six billion dollars during the first nine months

(16:31):
of last year. That's a fifty percent year over year increase.
According to bankreg Data dot Com. The pandemic era savings
that people had fully depleted by the midpoint of last year.
The financial cushion provided by pandemic era savings have been

(16:54):
entirely erased. Households just households in general, burned through more
than two trillion dollars in excess savings in just three years,
leading a negative one hundred and seventy billion dollars in
the kilative savings. That means that consumers are financially unprepared

(17:17):
for future shops. And I have even talked about the
government that crist thirty six point two trillion dollars. I remember,
I've always said that there was going to be some
tipping point. Donald Trump is the right man at the
right side, because that kipping point might be here.

Speaker 4 (17:38):
Mike, if Trump can't rescind the ban, what if he
were to ban the enforcement on the ban. So therefore
it wouldn't matter because you can not not.

Speaker 2 (17:49):
Least there might be a ban on the ban of
the ban.

Speaker 3 (17:54):
Yeah, we're going to ban the ban, right, We'll do
that regardless of even if he were to ban the ban,
that would end up in court too. So whether he
does it in a positive direction or a negative direction,
it's still gonna end up in court. So we where

(18:16):
have we gone so far? We we've talked a little
bit about the idea that you know this speaking of
the band, that the offshore drilling ban is meant to
try to trap Trump and prevent him from drill, baby, drill.

(18:41):
But there is still this underlying effect, the Trump effect
that he has had simply by being elected with the
majority of the popular vote, maintaining the majority in the House,

(19:01):
and taking control of the Senate, and winning I think
one of the factoids that we often forget about is
winning the electoral College, but doing so by winning the
battleground states, which means that a wide swath of Americans

(19:22):
have looked at where the country was going and said,
we don't like this direction. So even your well, we
would have at one time, excuse me, referred to as
the Reagan Democrats, had said, we don't like this Marxist
kind of far left progressive government. We don't like this

(19:43):
intrusive nature of things. We don't like what the government's
doing to us. We want to go a different direction,
and that results in things like and I don't want
to go into depth on this now, but as an example,

(20:04):
the Wall Street Journal has been reporting now for I
would say at least a week or two little stories
just kind of plastered here and there about companies that
are abdicating or absolutely I shouldn't say abdicating, they are
just doing away with their DEI policies and instead going

(20:29):
back to a meritocracy. Now, I think that's a combination
of two things. I think it's a combination of their
realization that, oh, these things don't really work, and we
do much better when we focus on merit. But before
the election of Trump, there was this political cloud over

(20:54):
these companies. Fearful of the regulatory state, the administrative state,
the deep state, whatever hell you want to call it,
and fear of government blowback, and fear of all of
the nngo's, fear of all the special interest groups that
would come down hard on them for abandoning what was,
you know, the book of Genesis for Democrats DEI berth

(21:21):
out of you know, all the BLM riots and crap.
But now they feel safe. They found a safe space,
and that safety is Donald Trump, and the safety is
their recognition that Americans recognize that this was the wrong
direction to be going. And so, for example, this morning,

(21:43):
I hear that I haven't read the story yet, but
I hear that McDonald's is also, of all places, McDonald's
has said, you know what, this DEI stuff is a
bunch of crap. We're going to start focusing more on
merit and We're going to start in the c suite.
We're going to start with management and then kind of
start letting it filter down. That I don't believe would

(22:06):
have happened but for November five, And that's the attitudinal
change that Trump needs to take advantage of. Mark Zuckerberg.
On Saturday, I said, I told the audience that a
friend of mine from the Bush administration, Joel Kaplan, who

(22:30):
was a deputy chief of staff. I forget what your
portfolio he had, but Joel's a great guy. Joel is
a like me, is a free speech guy, believes in
the constitution, believes in all of these things. He's been
named by Mark Zuckerberg as the director or VP or

(22:52):
whatever of Globe of Medicine Global Policy. And I heard
him this morning, and any let me go back to Saturday.
And in Saturday, I said, if Joel Kaplan today is
the same Joel Kaplin that I knew, then he's going
to upend everything about Meta and Facebook when it comes

(23:14):
to when it comes to censorship, when it comes to
fact checking, when it comes to all of these things
that have made Facebook just this blue. And he's going
to do He's going to try to emulate musk and
turn Facebook back into a free speech platform. Well, driving
in this morning, dodging all the people in the left

(23:35):
lane with their blinkers on. Joel Cappin's on Facebook. I mean,
he's on Fox News and he's talking about how he
wants to return Facebook to this free speech platform. Now,
obviously the proof's going to be in the pudding to
see how well he can do that. But at the

(23:56):
same time that he's doing that out exactly the same time.
But at the time that he's doing that, Zuckerberg is
over on X this morning announcing the same thing that
Joel Kaplan had been talking about. Listen to and I

(24:21):
don't want to play all of it, but listen to
part of what Zuckerberg has to say.

Speaker 2 (24:26):
Hey, everyone, I want to talk about something important today
because it's time to get back to our roots around
free expression on Facebook and Instagram. I started building social
media to give people a voice. I gave a speech
at Georgetown five years ago about the importance of protecting
free expression and I still believe this today. But a
lot has happened over the last several years. There's been

(24:48):
widespread debate about potential harms from online content governments, and
legacy media have pushed to censor more and more. A
lot of this is clearly political, but there's also a
lot of legitimately bad stuff out there. Drugs, terrorism, child exploitation.
These are things that we take very seriously and I
want to make sure that we handle responsibly. So we

(25:08):
built a lot of complex systems to moderate content. But
the problem with complex systems is they make mistakes. Even
if they accidentally censored just one percent of posts, that's
millions of people. And we've reached a point where it's
just too many mistakes and too much censorship. The recent
elections also feel like a cultural tipping point towards once

(25:28):
again prioritizing speech.

Speaker 3 (25:31):
Hmm, well, so it even seems like elections once again
point toward a culture of free speech. The Trump effect, Now,
what was the Biden effect? What was the Obama effect? Oh,
let's send the Department of Homeland Security and the FBI
into Zuckerberg's office and say, oh, look, there's misinformation about

(25:56):
COVID nineteen sars Kov two. You need to get rid
of that. Well, we don't really do that. Well you
might want to, you know, you might. When we consider
that the veiled threat that's lifted, that's gone, and Zuckerberg
admits that, So.

Speaker 2 (26:14):
We're gonna get back to our roots and focus on
reducing mistakes, simplifying our policies, and restoring free expression on
our platforms. More specifically, here's what we're gonna do. First,
we're going to get rid of fact checkers and replace
them with community notes similar to X.

Speaker 3 (26:32):
See. I love community notes on X. It's I think
it's kind of superfluous. But what's great about it is
not everybody can write a community note. What's what's a
community note? It's an annotation. So somebody posts something on
X and I read it and I think that it
is just blatantly incorrect. Well, I'm fortunate enough to have

(26:57):
the authorization to write to author a community note, and
I can in that community note, I can anatize what
the person has posted, and I can say that this
is incorrect, and then I can cite sources that contradict
what the person posted, and then people can read those
community notes and they can make up their own mind

(27:20):
about what somebody said. In other words, Musk is letting
people on X say what they want to, even if
it's wrong, and then people can through crowdsourcing, under the
guise of something called community notes, can come forward and
say well that's wrong. You can even I've seen many

(27:43):
people's comment that you know, this doesn't need a note
because this person is simply expressing an opinion and they're
entitled to that opinion, So stop abusing community notes. It's
that kind of vigorous debate that goes on for a
post that allows people to maybe change their perspective. So

(28:05):
it's it's it's amazing how it works. Zuckerberg is going
to emulate that on Facebook guarding in the US, which
but I should point out, by the way, is a
lot better than the so called fact checkers because who
were the fact checkers. Well, they were the people selected
by Zuckerberg's minions that reflected their point of view, so

(28:31):
they were pretty much from the cabal. So the New
York Times got the act as a fact checker. Well,
that's a bunch of bull crap, because I don't believe
about half about the New York Times says. So if
he really follows through and implements community notes like system
on Facebook, they'll be vigorous debate. They'll be vigorous, like
you know, you post something and you think it's wrong,

(28:53):
you can comment about it. Here's why it's wrong, and
here's a link. Here's a URL, a citation to other
information that will give you a different point of view.
Why do you think Zuckerberg's doing this? Because this is
one of the I think intended consequences of the November

(29:13):
fifth election. People got tired of government censorship. People realized
that free speech really is inherently, inherently a part of
not just our culture but our DNA, of our way
of government. Without free speech, there is no freedom. Without
being able to criticize, debate, argue, whatever you want to

(29:34):
call it, you can't have freedom.

Speaker 2 (29:37):
After Trump first got elected in twenty sixteen, the legacy
media wrote NonStop about how misinformation was a threat to democracy,
and we tried in good faith to address those concerns
without becoming the arbiters of truth. But the fact checkers
have just been too politically biased and have destroyed more
trusts than they've created, especially in the US.

Speaker 3 (29:58):
Wow, it's kind of interesting to find someone who has
seen the light.

Speaker 5 (30:04):
People need to do their research and understand what the
Keystone pipeline was all about. It was never about energy
independence for America. It was to get Canadian all sands
do the Gulf of Mexico for export. The billions of
dollars that were lost by TC Energy and the investors
is never going to be recruited and is not as

(30:24):
simple as turning it back on. Only eight percent of
that pipeline was ever completed.

Speaker 3 (30:33):
It wasn't It can be turned back on, you you
can if they If the investors want to go back
and do it, they can go back and they can
build it. That's up to the investors to look at
their ro and see if it's feasible for them or not.
But it is in terms of energy independence, it is important.

(30:54):
Why is it going to the golf for refining. It
doesn't all have to be put on to tankers and
shipped elsewhere. It's a way for us to get some
of that oil shale into this country for refining purposes.
You know, I don't want to get off on this entirely,

(31:15):
but one of the big problems we have in this
country is a lack of refining capacity. We've shut down
way too many refineries, and we did that because of
a CIRCLEA and a bunch of other environmental regulations that
caused most a lot of refineries. I know one in
particular that I represented that because of all the circular

(31:37):
of the environmental regulations, was shut down, sold to private investors.
I represented the investors, and after fighting the EPA for
years and years, I must have spent I don't know,
six or seven years on that project as their lawyer,

(31:58):
fighting the EPA, trying to get you know, exemptions for
this or that, arguing about whether or not this was
really incompliance or out of compliance. And eventually the investors
just said, you know what, We're not gonna sink any
sink any more money into it. And so they literally
just mothball the refinery. And to this day, I mean

(32:18):
I shouldn't say to this day, but so we shut
it down. There has been decades ago we shut it down,
and little by little pieces were sold off. You know,
people might need a spare part, they might need a
particular you know, compressor or something, and so it gets
sold off to somebody else, and it gets mothballed, and

(32:41):
then it gets it gets sold some some some things
just for scrap, just to to to recoup some of
the costs and some of the investment, because it costs
just to sell some of it off. So that's one
less refined that we could have in this country. So

(33:02):
that when another refinery has to shut down for scheduled
maintenance or unscheduled maintenance because of something happens, there's no
backup anywhere. There's no redundancy anywhere, Nobody to pick up
the slack. Nobody ever talks about that, the lack of
refining capacity in this in this country. Real quickly. Kathleen Chandler,

(33:23):
my friend over at the Independence Institute, sent me an
email and I want to remind everybody about her citizen
involvement project. It's something that well, here's how she describes it. Uh,
are you ready to stop complaining and do something? We
need you to get on the field and off the
sideline here here here need a big or small get involved.

(33:45):
The details are in brief on a link that you
can get by simply going to I TWOI dot org
slash local dash gov. If you easier, just go to
I two I dot org ie to I dot org
and then on their search bar look for the local
government classes. Or you go to Michael says, go here

(34:07):
dot com. I'll have that posted shortly. Yeah, Or you
can go to Michael says, go here dot com. Somebody
said that, I rapidly said. Biden says to go here
dot com yesterday. No know whether I did or not.
Who knows. Let me tell you how affecting these courses are.
There are people who have gone to the course and

(34:28):
they have gotten on say a local planning commission, or
they've gotten on some water district, or they've gotten on
some you know, board or whatever at the local level.
And then they move up and they've gone on to
become a city councilman or maybe a mayor, and some
have gone on to become state reps. Yes, this is

(34:48):
how you get involved, and this is how you make change.
And what Kathleen Chandler and the Independence Institute are doing
with these classes is something I've been screaming about people
to get involved for years. Here's a way for you
to learn and to be mentored in how to get involved.
I too, I dot org. Look for the local government class.

(35:09):
Think t I'll be right back.