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Jan. 28, 2022 - The Ben Shapiro Show
45:44
The Biden Economy Hits The Skids | Ep. 1422
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Investors begin dumping stocks as the Federal Reserve announces a rate hike.
Joe Biden plans cryptocurrency regulations.
And the media tries to pretend that Joe Biden's black female Supreme Court pick isn't about race or sex.
I'm Ben Shapiro.
This is the Ben Shapiro Show.
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Slash Ben, we'll get to all the news in just one moment.
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Alrighty, so the Biden economy is now hitting the skids.
It is hitting the skids because we had a superheated economy in which we were pouring Trillions of dollars on top of an economy that really didn't need it.
And the fact is that when the pandemic first started and the government told everybody to go home from work, there was a case to be made that the government had essentially driven a Ford F-150 into your business.
And now they had to pay recompense for that.
But as it became quickly clear, what the government really needed to do was first take the Ford F-150 out of the front of your business and allow you to reopen your business.
It became just as clear that what the government shouldn't do is, after rectifying the expense, continue to pay you just so that they could leave the Ford 150 directly in the middle of your business.
Once it was clear that businesses ought to be reopened and that young, healthy people were going to be generally fine from COVID, the government ought to have gotten out of the business of, quote-unquote, stimulating the economy.
Instead, the Federal Reserve bought up every asset it could find and started injecting trillions of dollars into the economy.
Many people finished the pandemic with more in savings than they had at the beginning.
Which is amazing since a huge number of people went completely unemployed during that time.
But again, the government was literally paying people to stay home for large periods of time.
This led to overheated inflation, dramatic lack of supply, and tremendous price squeezes.
Well, now the Federal Reserve is about to end America's era of easy money, according to the Wall Street Journal.
That is prompting investors to reverse course on two years of investing strategies kicking off this month's broad market route, the worst sell-off since the early days of the pandemic.
Major U.S.
stock indices have dropped between 6% and 15% in January through Thursday, with some investor favorites during the pandemic, like Moderna, Peloton, and Netflix, falling around two or three times as much.
Wall Street's fear gauge, the CBOE Volatility Index, of expected market swings has almost doubled this year.
Some well-known hedge funds are down 10% or more, said people familiar with the results.
Driving the tumult are expectations the Fed will raise interest rates for the first time since 2018, likely setting off a series of increases over the next couple of years.
On Wednesday, Fed officials gave their clearest indication they could boost rates in March and beyond.
At the same time, government policies to put money in the pockets of consumers are waning.
In response, investors are changing strategies.
They've ridden hard for almost two years, rattling stocks, bonds, and cryptocurrencies, all of which soared during the age of pandemic stimulus.
And you can see why.
People really had no place to be.
If you left your money in the bank, this was a complete waste of time.
So people started buying stocks like crazy.
They started putting their money in bonds to a lesser extent, and they started putting their money in crypto to hedge against that inflation.
Girding themselves against the impact of tighter money, investors are shifting to investments that feel safer, such as dividend stocks and gold exchange traded funds.
Indeed, some high dividend funds have outperformed this year, including the Invesco High Yield Equity Dividend Achievers ETF, which is flat so far in January.
Individuals who are big purchasers of hot stocks and bullish call options, which gave holders the right but not the obligation to buy shares at a certain price, are also reversing their approach.
Some are dabbling in broad market index funds, As well as bearish put options, which confer the right to sell shares at a stated price by a specified date.
So people are banking on the idea that the stock market is now going to correct and stabilize or go down over the course of the next few months.
While higher interest rates as the Wall Street Journal aren't likely to seriously crimp economic growth, at least over the next few months, a turnaround in investor attitudes is already being felt and is likely to continue to ripple through markets in unpredictable ways.
People's bank accounts surged.
Many put that money into the market.
The stimulus has ended.
Rising rates are likely, said Rob Arnott, founding chairman of Research Affiliates, an asset management firm based in Newport Beach, California.
This week, hedge fund investor William Ackman said his firm had acquired 3.1 million shares of Netflix after the stock's recent tumble.
Mr. Arnott and others urged caution, said sell the surges, don't buy the dips.
Okay, but here's the reality.
If you've lost money on your stocks, hold on to them.
If you can, right?
Don't sell them as long as you can.
Never sell when the market is going down is, you know, the first rule of investing.
But with that said, the S&P 500 and the Dow are now on track for their fourth weekly loss.
According to the Wall Street Journal, futures for the S&P 500 wavered, falling 0.5%.
The benchmark gauge of large-cap stocks has fallen 1.6% for the week, putting it on course for its longest losing streak since September of 2020.
Futures for the technology-focused NASDAQ 100 slipped 0.1%.
Contracts for the Dow Jones Industrial Average fell 0.6%.
Chevron reported its most profitable year since 2014, said it would raise capital expenditures by 20% to $15 billion this year.
Shares fell 1.6% in pre-market trading anyway.
Caterpillar edged down after the company reported a surge in costs, offsetting a jump in revenue.
Apple shares did rise 4.1% ahead of the bell after the biggest U.S.
company by market cap posted record revenue and profits.
Shares of Robinhood Markets, which reported a quarterly loss of $423 million, dropped 14% in pre-market trading.
And of course, Chairman Jerome Powell added to expectations the central bank will start a series of interest rate increases in March.
Now, here is the thing.
The U.S.
economy is experiencing very strong growth.
However, that growth is paired with extraordinary inflation.
And that, again, is because of government policy.
Inflation, as Milton Friedman once said, is anywhere and everywhere a monetary phenomenon.
According to the Wall Street Journal, the U.S.
economy grew rapidly in the fourth quarter of last year, advancing to a 6.9% annual rate.
A growth has run into obstacles that could lead to more modest growth this year, say economists.
So you're looking for a slowing economy this year.
GDP, the broadest measures of goods and services in the fourth quarter, accelerated from the third quarter's growth of 2.3% adjusted for inflation.
The gain reflected solid spending by households, much of it occurring early in the quarter.
Output grew 5.5% in all of 2021.
When comparing the fourth quarter to the same period a year earlier, the economy has not grown that fast since 1984.
There's only one problem.
Inflation has not grown this fast since 1982.
So all of the gains have basically been eaten up by the inflationary numbers.
Andrew Hunter, Chief U.S.
Economist at the Research Firm Capital Economics says the headline 6.9% figure is probably a bit overly optimistic in terms of the underlying strength of demand.
We do think it's increasingly clear that the case that the economy is essentially at or rapidly approaching that capacity constrained potential level, the speed limit is lower now than it was before the pandemic.
Two factors that helped drive last year's expansion, the torrents of cash sent from Congress to households, and the ultra-low borrowing costs stoked by the Fed are fading.
Households have spent down some of their stimulus money.
And again, it's the underlying economic activity that matters.
Because when you decide that the economy is basically about how the Federal Reserve is going to take in money and then Gush out money.
That is not about underlying economic activity.
The underlying economic activity has to be based on innovation.
It has to be based on people creating new services and products and selling those and competing.
This is how economies grow.
They don't grow just because the Federal Reserve takes in money and then breathes it back out again in a sort of reverse osmosis osmosis process with regard to the monetary supply.
It happens to be the case, according again to the Wall Street Journal, that the cost of hiring new employees and retaining existing ones in the nation's tight labor market is now growing at nearly its fastest pace in a generation.
That's helping to fuel inflation as employers pass labor costs to customers.
At the U.S.
Employment Cost Index, a quarterly measure of wages and benefits paid by employers is expected to show that costs continue to rise at the highest rate in two decades of available records.
So it could be even more, because this only goes back a couple of decades.
Economists surveyed by the Wall Street Journal expect a seasonally adjusted increase of 1.2 percent in the fourth quarter of 2021 over the prior three months, which experienced a similar increase.
The third quarter gain, when compared with the same quarter from a year earlier, rose 3.7 percent.
Labor costs are a significant contributor to rising prices.
The current tight labor market is encouraging many workers with bargaining power to switch jobs and demand more pay, raising the risk of a destabilizing inflation dynamic known as a wage-price spiral, in which the prices go up, so people need more money for their wages, and then the wages go up, so the producers have to charge more money for the product.
And her as an executive director at IHS markets as quote, inflation has fundamentally picked up.
I think it's fair to say price gains are feeding back into wage gains.
There's a lot of pressure on the supply side on both commodities and labor.
Investors and the Federal Reserve now consider the labor market to be at or near full employment, despite the fact that the economy has only recovered about 84% of the jobs it had before the pandemic.
So, 16% of the jobs we had before the pandemic are still gone.
The labor force has dramatically shrunk.
With the unemployment rate now below 4%, the Fed is shifting gears from providing stimulus to the economy to fighting inflation while trying to maintain the labor market recovery.
Jerome Powell says we are attentive to the risks that persistent real wage growth in excess of productivity could put upward pressure on inflation.
So as the Wall Street Journal points out, none of this was necessary.
We could have just had a normal economic recovery and everything would have been fine if Joe Biden and the Federal Reserve had left everything alone, but they didn't.
As the Wall Street Journal editorial page points out, imagine if the Biden administration had focused primarily on the pandemic as it took power a year ago.
Get the vaccines out, accelerate COVID therapies, let an economy poised to soar take off on its own.
No $1.9 trillion relief bill in March, no threat of new tax increases and spending to quote-unquote transform American society.
Would the economy now be healthier with much less inflation, fewer shortages, and more consumer and business confidence?
We'll never know, but there's a strong case for thinking so.
The Bureau of Economic Analysis says the GDP expanded 5.7% in 2021, which is the fastest annual growth since the 80s.
But the recovery from the pandemic was always going to take off.
Politicians shut the economy down for much of 2020 and poured cash into consumer pockets to compensate.
And the Federal Reserve flooded the economy with more money.
A boom for the ages was poised to happen in 2021.
No doubt the Biden administration would take credit.
In the event, the economy in 2021 did not grow nearly as fast or in as healthy a fashion as it should have.
That is clear from the details of growth in the fourth quarter.
Top-line growth of 6.9% was robust, accelerating from 2.3% in the third quarter.
But, by far, the biggest contributor to GDP, 4.9 percentage points, was a buildup of inventories.
This means retailers and other businesses were restocking empty shelves, not making sales.
There's probably more inventory buildup to come due to shortages across the economy, but that fourth quarter increase is unsustainable.
In other words, what happened is there was a backlog of products.
Okay.
And so everybody produced in order to put those products on the shelves, but that pace is not going to continue because now everybody's got their product, right?
It's going to come off the shelves and people don't need the second product.
They already got the first product.
So all that happened is there was a massive buildup of economic growth that happened to sort of materialize in the fourth quarter.
According to the Wall Street Journal, editorial board consumer spending contributed 2.25% percentage points.
Much of that came from spending down accumulated savings from the government largesse.
The personal savings rate fell to 7.4% from 9.5% in the third quarter.
Real disposable income after inflation fell 5.8% in the fourth quarter after falling 4.3% in the third.
Real disposable income is down 5.8% in the fourth quarter after falling 4.3% in the third.
Okay, that means that people are spending down all the money that they got from the government and they're going to run out soon.
The White House hailed the GDP growth figure, but if times are so good, why do the polls give the economy low marks and Biden little credit?
The best explanation is inflation running at 7% in the consumer price index.
Even the Fed's preferred inflation measure, personal consumption expenditures, rose at an annual rate of 6.5% in the fourth quarter, accelerating from 5.3% in the third quarter.
This is where focus on COVID's strategy would have helped.
The March spending blowout caused a surge in demand that met with a historic supply shortage.
And then the uncertainty from the proposed Build Back Better tax increases and vows to punish businesses with new regulation added to the supply problems.
Because why would you invest into a market that was going to tax the living hell out of you?
None of this was necessary.
So, what is the Biden administration going to do about all of this?
Their plan, apparently, is to regulate Bitcoin.
Not kidding.
So, to understand what Bitcoin and crypto are, essentially, Bitcoin and crypto have a couple of main purposes.
One is financial security that does not require verifiability from a financial institution.
Normally, when you use your credit card, there are like seven or eight actual layers, intermediaries, between the person to whom you are giving the money and you.
There are a bunch of verifiability companies.
Companies that verify that your credit card transaction is correct.
The credit card company having to deal with your bank in order to actually convey the money, right?
The credit card company doesn't just have all of your money on hand.
The bank has to pay the credit card company.
The credit card company then pays the person to whom you're paying, etc.
Okay, there are like seven or eight intermediaries.
What the financial innovation part of Bitcoin is, what cryptocurrencies do, is they cut that out.
They create a trustless system.
Because what cryptocurrency does, it creates something called the blockchain.
The blockchain...
There's a bunch of people who are sitting in rooms cracking codes.
The reason that they are cracking the codes is when they crack a code they have verified that your exchange is proper.
So they can trace every dollar that is being sent via cryptocurrency from one place to another place and verify that it's not just fake money that's being made up and transferred.
That is what the blockchain is.
This is what cryptocurrency miners do.
What they do is they just verify the blockchain.
That's all they do.
All day long.
So that's one purpose.
The other purpose is that cryptocurrencies have a limited amount of supply, meaning that it's not affected by the Federal Reserve.
It's not the Federal Reserve saying, we need a hotter economy.
Just pump some money into crypto.
That is not how that works.
Cryptocurrency has a set amount of supply.
This is the magic of cryptocurrency.
Just like gold or silver, just like any other hard asset, cryptocurrency cannot be manipulated by outside forces who just blow up the amount of cryptocurrency in circulation and therefore devalue the cryptocurrency that you have in your pocket.
Now the catch with cryptocurrency is that the value of cryptocurrency is largely dependent on how many people are into it.
It's like stocks.
It depends on how many people want it at any given time.
So when the dollar seems more solid, fewer people are going to invest in cryptocurrency, which is what you've been seeing over the last couple of months as cryptocurrencies have seen a bunch of people sell off.
And you've seen it go from a high of 65,000 down to the mid 30s.
There's a lot of volatility in the crypto market because there are not enough players in the crypto market as of yet.
So what this means that basically cryptocurrency is good for two purposes one as a repository of value and second as a as an actual currency that can be used in exchange the problem with using it as a currency is in exchange is that when the value of cryptocurrency varies that widely would you as a as a Say car dealership owner wants to take crypto in payment for your car when that crypto could be worth half of what it is today, tomorrow.
And the answer generally is no.
As crypto gains broader and broader market acceptance, however, that could change.
And as blockchain technology gains broader and broader usage, that's going to cut out a bunch of those intermediaries that we've been talking about.
The biggest victims of cryptocurrency are centralized government bureaucracies.
The Federal Reserve hates cryptocurrencies.
The reason that the Federal Reserve hates cryptocurrencies is because they provide a hedge against the federal government being able to inflate and deflate your savings.
Because again, unlike the Federal Reserve, there is no centralized power that is in control of the amount of cryptocurrency in circulation.
When the Federal Reserve wants to decrease the value of the dollar, all they have to do is buy up a bunch of assets from the market and inject money into the circulation flow of the economy.
And when they want there to be less money in circulation, they attempt to sell off as much as they possibly can, which is what you are seeing right now.
They can also monkey around with the overnight interest rates that banks charge to other banks when they have to fill in their ledgers.
None of that happens with cryptocurrency.
So what this means is that if you're Joe Biden and you are heavily reliant on government manipulation of the currency markets in order for you to be able to pursue your agenda, if you want the government to have complete control over everybody's savings, what you really want to do is centralize more of that control.
Crypto is a threat to that.
And this is why the Biden administration, in the middle of economic turmoil, is now talking about heavy regulations on crypto.
Because what they don't want is a parallel shadow economy arising that they cannot control.
So this is why today the White House announced that they want crypto rules as a matter of national security.
They're calling it a national security issue.
The claim being that because they're usually banks that are intermediaries between payments, this allows them to, for example, monitor terrorist transactions.
And if you get rid of all the intermediaries, then terrorists can transfer money across borders without having to worry about any of those institutions verifying the transaction.
But that's not all they're trying to regulate here.
This really is not about national security.
Again, one of the things about cryptocurrencies that's kind of amazing is you can actually trace every single dollar because the blockchain is accessible.
You can see how these transactions work.
According to Behrens, the Biden administration is preparing to release an executive action that will task federal agencies with regulating digital assets like Bitcoin and other cryptocurrencies as a matter of national security.
A person familiar with the White House's plan tells Behrens.
Only the federal government can send pallets of cash to Iran.
You, however, cannot conduct a cross-border transaction in crypto to buy a product from, say, Mexico.
The National Security Memorandum, expected to come in the next few weeks, would task parts of the government with analyzing digital assets and assembling a regulatory framework that covers cryptos, stablecoins, and NFTs, or non-fungible tokens, this person said.
The person said this is designed to look holistically at digital assets and develop a set of policies that give coherency to what the federal government is trying to do in this space.
The State Department, Treasury Department, National Economic Council, and Council of Economic Advisors would be involved in this initiative.
The White House National Security Council would also be involved, the person said, since crypto has economic implications for national security.
Along these lines, the administration would instruct agencies to work on harmonizing regulations of digital assets between countries.
So they're looking for an international regime of cryptocurrency control.
If you think that these governments are deeply concerned about the passage of money for terrorist purposes, you got another thing coming.
That's not what this is about.
First of all, the number one asset that people actually use to conduct black market transactions is cold, hard cash.
They actually use just American dollars, for example.
Which is why in every crime movie you've ever seen, somebody shows up with a briefcase full of actual cash.
So maybe they should crack down on American dollars and the usage of cash.
By the way, they are attempting to do this because they actually want to trace all your transactions as well.
The White House wouldn't issue recommendations.
Agencies would be given three to six months to come up with proposals.
As the White House would act as a policy coordinator, the White House declined to comment.
The White House aims to bring order to the haphazard approach that the government is now using to regulate crypto, the person said.
Various agencies oversee the industry, including the SEC, the Commodities Future Trading Commission.
There's no consensus on matters such as whether some tokens should be registered as securities or how to oversee exchanges, stable coins and high yield lending products.
The Biden administration wants Congress to draft rules.
The White House released a report on stable coins in November, recommending that Congress act promptly to regulate the industry.
The Federal Reserve is also weighing in on digital currencies.
There's a shock.
The Fed released a report on a central bank digital currency, or CBDC, earlier in January that laid out the pros and cons of digitizing the dollar.
The report said the Fed could start working on the project with support from the White House and Congress.
Here's the problem.
Once the Fed digitizes the dollar, they can inflate or deflate the currency with literally the push of a button.
They can just push a button, and they can make money appear or disappear.
And if you start to have the Federal Reserve acting as your banker, and you're going to store your digital money with the Federal Reserve, do you really want Jerome Powell and control that directly of your assets?
And you want them regulating crypto so that you are forced into the Federal Reserve currency?
They get rid of things like Bitcoin and instead they choke it off and instead they say, if you want to be involved in a digital currency without the market transactional cost of using a credit card, then what you really need to do is you need to head on over to the Federal Reserve so they're in complete control of your savings.
There's a reason they're doing this.
It is always and forever about control.
In just one second, we'll get to the proof of that.
When Paul Krugman endorses an idea, that's how you know it's a stupid idea.
We'll get to that in just one moment.
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Alrighty, so Paul Krugman is coming out strong against cryptocurrencies, which is not a shocker.
Paul Krugman suggests that it's just like a subprime mortgage.
It's not just like a subprime mortgage.
Subprime mortgages were subsidized by the federal government.
The subprime mortgage industry arose because the federal government essentially said they were going to backstop a bunch of mortgages they knew were going to go broke.
And then they were hoping that the market just kept increasing so that people could sell off their houses if they did go broke.
The subprime mortgage crisis was created by government policy designed to make sure that people who could not pay their mortgages got mortgages.
This was the explicit goal of the subprime mortgage market.
And then the market started playing with those and packaging the subprime mortgages with other mortgages and mixing in toxic assets with non-toxic assets.
And creating all sorts of derivative arrangements.
And those derivative arrangements then had infectious effects throughout the economy in 2007-2008.
But the key problem with subprime is that there were a bunch of people who could not afford houses, who were being granted subprime mortgages on the basis of zero or no credit history because the federal government was subsidizing that.
Paul Krugman, however, is trying to compare crypto to subprime, which again makes no sense.
Crypto is based on you literally taking your money and buying a product.
And now you own the product.
The product is crypto.
It is not a loan.
It is not government subsidized.
In fact, the government very much tries to shut down crypto.
But according to Paul Krugman, they're exactly the same.
Why?
Because anything that he can use as an excuse to crack down on a particular practice, he will.
So never mind that Paul Krugman had nothing to say about the real estate bubble that was being created by the Federal Reserve and the federal government, Fannie Mae and Freddie Mac, during the 2000s, so far as I'm aware.
And it doesn't matter that he's very much in line with the idea that the federal government should be subsidizing low-rate mortgages to people of minority backgrounds who can't actually pay those mortgages.
He says this is just like crypto, because if subprime is bad and crypto is bad, this means they're the same.
So Paul Krugman, who is just, it's insane this guy won a Nobel Prize.
I mean, he won a Nobel Prize for trade policy, and then he proceeded to just blabber about everything else that he has no idea what he's talking about.
It's really incredible.
It's amazing.
The ultra crepedarianism, the speaking out of turn by Paul Krugman on these issues is pretty astonishing.
He says, if the stock market isn't the economy, which it isn't really, then cryptocurrencies like Bitcoin really, really aren't the economy.
Still, crypto has become a pretty big asset class and yielded huge capital gains to many buyers.
By last fall, the combined market value of crypto had reached almost $3 trillion.
Since then, however, prices have crashed, wiping out around $1.3 trillion in market capitalization.
As of Thursday morning, Bitcoin's price was almost halfway down from its November peak.
So who's being hurt by this crash and what might it do to the economy?
Well, first of all, anytime the economy goes down, the people who are at the margins of the economy do the worst.
This is true in the stock market.
The stock market has taken a dump over the last month.
The people who are hurt the worst are the people in pension funds, the people who have taken their little bit of savings and put it in the stock market.
If people have a lot of money in the stock market, they're fine.
They'll just ride it out.
So I'm not sure why Paul Krugman thinks that crypto is any different.
And I own crypto.
I'm fine.
I'll just wait.
I won't sell it right now because I'm not an idiot.
I basically bought it around where it is right now.
So I'll just wait for it to go back up again.
But according to Paul Krugman, crypto innately targets the most vulnerable, which he's going to have to explain.
He says, I'm seeing uncomfortable parallels with the subprime crisis of the 2000s.
No, crypto doesn't threaten the financial system.
The numbers aren't big enough to do that.
But there's growing evidence the risks of crypto are falling disproportionately on people who don't know what they are getting into and are poorly positioned to handle the downside.
My favorite thing about Paul Krugman is that he thinks that if the government tells you what to do with your money, you will do better.
And then after the government tells you what to do with your money and sponsors financial products like subprime mortgages and everything goes south, the solution is the government needs to step in and do something about it.
There is no falsifiability to any of Paul Krugman's theses about exactly how the government's involvement in the economy is good.
He says, what's this crypto thing about?
There are many ways to make digital payments from Apple Pay and Google Pay to Venmo.
Mainstream payment schemes, however, rely on a third party, usually your bank, to verify you actually own the assets you're transferring.
Cryptocurrencies use complex codings to supposedly do away with the need for these third parties.
Not supposedly, they do.
I mean, the cryptocurrencies have been used all over the world.
Skeptics wonder why this is necessary and argue that crypto ends up being an awkward, expensive way to do things you could have done more easily in other ways, which is why cryptocurrencies still have few legal applications 13 years after Bitcoin was introduced.
Well, no, the real reason that they have few legal applications is because the government actively discourages people from investing in Bitcoin.
And until Bitcoin reaches critical mass or a huge number of people own it.
It's going to be very difficult to use it as an actual asset that is tradable on markets.
There are certain countries like El Salvador, which has started using crypto as a medium of exchange.
They're first into the ballgame.
But the reality is that as long as crypto is this volatile, again, people are not going to use it as a medium of exchange.
So says Paul Krugman, crypto has crashed now.
Maybe it will recover and soar to new heights as it has in the past.
For now, however, prices are way down.
Who are the losers?
As I said, there are disturbing echoes of the subprime crash 15 years ago.
Crypto is unlikely to cause an overall economic crisis.
It's a big world out there.
Even $1.3 trillion in losses is only about 6% of U.S.
GDP.
A hit that's an order of magnitude smaller than the effects of falling home prices when the housing bubble bursts.
And activities like Bitcoin mining, while environmentally destructive, are economically trivial compared with home building, whose plunge played a large role in causing the Great Recession.
Still, some people are being hurt.
Who are they?
According to a survey by the research organization NORC, 44% of crypto investors are non-white, 55% don't have a college degree.
This matches up with anecdotal evidence that crypto investing has become remarkably popular among minority groups and the working class.
You want to know why?
Because there are a bunch of people who can't actually open bank accounts because they don't have enough assets.
So instead, they take their money, they put it in crypto, and then they can actually transfer money between themselves using crypto wallets.
That's why.
They don't wish to pay the credit card intermediaries, so instead, they use crypto.
Okay, that is why.
What crypto does, it alleviates the need to have an actual bank account.
This is why there are people living in Afghanistan right now who are using crypto in order to trade currency, in order to pay for things.
Nork says this is great.
The cryptocurrencies are opening up investing opportunities for more diverse investors.
But I remember the days when subprime mortgage lending was similarly celebrated and when it was hailed as a way to open up the benefits of home ownership to previously excluded groups.
Yeah, the difference is, again, the federal government was subsidizing the subprime mortgages.
It was the federal government and people like Paul Krugman pushing it.
Saying that this is good.
Crypto isn't good because more minorities are participating in it.
Crypto is good so more minorities are participating in it.
So he's afraid that people are getting into crypto not understanding what it is.
Okay, well, how many people understand the stock market super well?
Really?
How many people?
How many people understand what the Federal Reserve does?
If you took a poll of the average American, do you think they understand what the Federal Reserve does?
Or the relationship between the Federal Reserve and quantitative easing?
And the buying and selling of bonds via the Treasury?
Like, how many people do you think actually understand that, Paul?
And yet people are invested in the dollar and the stock market.
The proof is in the pudding.
People invest in products when they think that they will make money from those products.
And Paul Krugman's assessment that people don't have enough information about crypto, and so crypto is bad, really is because Paul Krugman has trust in government officials to control the currency.
He says, maybe those of us who still can't see what crypto cryptocurrencies are good for other than money laundering and tax evasion are just missing the picture.
You are.
You don't know anything.
Does maybe the rising valuation of Bitcoin and its rivals represent something more than a bubble in which people buy an asset simply because other people have made money off that asset in the past?
It's OK for investors to bet against skeptics, but these investors should be people who are both well equipped to make that judgment and financially secure enough to bear the losses.
If it turns out the skeptics are right.
He says, regulators have made the same mistake they made on Subprime.
They failed to protect the public against financial products nobody understood.
Everybody understood Subprime.
They just didn't think that the market was going to go down.
And I love the innate racism of Paul Krugman here.
He's like, you know that there are a bunch of minority people who have this crypto thing and they shouldn't be allowed to have those crypto things now that the government getting involved because they're stupid and they don't know things.
I mean, he literally says 44% of crypto investors are non-whites.
And then he's like, also, we need to regulate crypto because stupid people are getting involved in crypto.
Dude, that's kind of racist.
That's a little racist.
But again, what this comes down to when it comes to crypto, when it comes to economic control, If the Biden administration gave up economic control, if they got over their build back better nonsense, if they got over the idea that the Federal Reserve is supposed to be the economic fixer of first option, then the economy would do a lot better.
If the Federal Reserve was just there to provide essentially a 2% monetary increase every year, which by the way, I'm opposed to as a general matter, because it means that over the course of 25 years, half of your savings is gone.
But with that said, the basic Notion that the Federal Reserve is there to serve as sort of a backstop in case of a run on the banks is not a bad idea, but that's not what the Federal Reserve is anymore.
There's a point that the head of Allianz, Mohamed El-Erian, has made over and over and over.
He says that basically the Federal Reserve and centralized apparatuses, apparati, like the Federal Reserve control too much of our markets, and this is a bad thing.
The left likes that.
They want that.
They don't trust the market.
And that's what this comes to.
And when you don't trust the market, the market doesn't trust you.
And this is why you have an economy that is performing at less than stellar.
Alrighty, in just one second, we'll get to Joe Biden's Supreme Court pick, because Justice Breyer did announce his retirement yesterday.
Basically, they had one of those shepherd's crooks, and Justice Breyer was just sitting there at the Supreme Court, and they went, and they just kind of pulled him directly off of the Supreme Court.
He went along with it because he understands the Democrats are about to be wiped out in the Senate.
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Alrighty, in just one second we'll get to Joe Biden's totally not racist, totally not affirmative action black female pic.
We'll get to that in one second first.
If you didn't catch it yet, latest episode of Adam Carolla's DailyWare exclusive comedy series Truth Yeller is streaming right now.
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Also, if there's anybody in the Biden administration, mainstream media, Big Pharma, don't want you to hear, it is the voice of Dr. Robert Malone.
He was the guy who was on Joe Rogan, and you will remember that they basically banned him from social media, even though he's an American virologist, immunologist, and pioneer of mRNA vaccines.
That is because of his public skepticism of the total efficacy of the COVID-19 vaccine.
He went viral for that Rogan podcast.
In any sane society, his background would qualify him as an expert whose opinions should at least be heard, but we are not living in a sane society, and so he is being censored.
Which is why our very own Candace Owens sat down for a three and a half hour interview with Dr. Malone, does not leave any stone unturned.
Together, they touch on some of the most alarming stats, questions, and trends mainstream media and big tech do not want to acknowledge.
It's an incredibly important interview.
It'll be available exclusively at dailywire.com this Tuesday, February 1st.
If you don't already have a Daily Wire membership, join now to catch the newest episode of Candace, premiering this Tuesday, 9 p.m.
Eastern, 8 p.m.
Central.
Also, tune in this Sunday for a brand new episode of the Sunday Special featuring my interview with First Amendment Attorney Harmeet Dhillon.
Harmeet represented us at the Supreme Court with regard to the COVID vaccine mandate pushed by the Biden administration, and she fights with conservative lawfare all of the predations of the left on a daily basis.
It's fascinating.
It is a must-listen interview.
You can check it out at dailywire.com slash watch or on my YouTube channel, Ben Shapiro.
you're listening to the largest, fastest growing conservative podcast and radio show in the nation.
All righty, meanwhile the The Biden administration is pushing forward with its Supreme Court pick yesterday.
Justice Breyer officially announced his retirement.
This is after he was basically approached from behind by Joe Biden and company and pushed down a flight of stairs.
Here was Justice Breyer announcing that he will go just in time for the Democrats to replace him because he can read the tea leaves.
I mean, he sees that in November, Democrats are just gonna get skunked.
So here he was yesterday.
Of course, people don't agree, but we have a country that is based on human rights, democracy and so forth.
But I'll tell you what Lincoln thought, what Washington thought, and what people today still think.
It's an experiment.
It's an experiment that's still going on.
And I'll tell you something.
You know who will see whether that experiment works?
It's you, my friend.
It's you, Mr. High School Student.
It's you, Mr. College Student.
It's you, Mr. Law School Student.
It's us, but it's you.
It's that next generation.
The one after that.
There he goes.
One of the least consequential Supreme Court justices in American history.
You cannot name a single decision with Justice Breyer's name on it that was of any consequence.
He was just a reliable vote for the left, which is all Democrats are looking for anyway.
Well, that and a black woman.
So Joe Biden continued to reiterate that he will pick a black woman, which again is kind of insane.
The reason it's insane is because in any other context, that would just be racist.
If you said I need a white male, that would be racist.
If you said I need an Asian transgender little person, that would also be sort of strange.
Labeling people not by their belief system about the Constitution, but by their race and sex seems kind of counterintuitive when your entire schtick is that you're supposedly an anti-racist.
But of course, we know that the Ibram X. Kendi anti-racist folks are the most racist people in America today.
Here is Joe Biden pushing this.
The person I will nominate will be someone with extraordinary qualifications, character, experience, and integrity.
And that person will be the first black woman ever nominated to the United States Supreme Court.
It's long overdue in my view.
I made that commitment during the campaign for president, and I will keep that commitment.
Now, I'm just going to point out right here that Joe Biden did vote against Clarence Thomas's nomination to the Supreme Court on the basis of the ridiculous Sidney DeHill accusations.
Also, his party filibustered the woman who certainly would have been the first black woman on the Supreme Court, Janice Rogers Brown, when George W. Bush wanted to nominate her for the Ninth Circuit Court of Appeals.
It was the Democrats who attempted to filibuster Janice Rogers Brown.
They did the same thing with Hispanic American Miguel Estrada when it came to the D.C.
Circuit Court of Appeals.
So all of their affirmative action nonsense to the side, the reality is that what they mean is a person who believes like we believe, but also is going to fulfill certain intersectional checkboxes so I can go back to my constituents and I can pretend that I care deeply about them.
That's what this is really about.
Now, the amazing thing is that the media immediately went into full spin mode, and you could see that this was going to happen because as soon as Joe Biden had said, I need a black woman, everybody on the right went, OK, that's affirmative action and a violation of basic equal protection standards.
Again, employment.
If I just said today, I'm only hiring a producer who is a white male.
I will not look at any other candidates.
This would be a violation of equal protection.
It would also be a violation of the Civil Rights Act of 1964.
I'm not a government actor, so it wouldn't technically be an equal protection violation.
It would be a Civil Rights Act violation.
Okay, but he is a government actor, which means he's violating both.
It doesn't matter.
The media immediately has jumped into action to suggest that Republicans are pouncing.
It's just it's all about Republicans pouncing.
So you have Aaron Blake writing for the Washington Post.
Here's the title.
The very selective effort to cast Biden's Supreme Court pick as an affirmative action hire.
Wait, hold on.
I don't have to cast it as that.
He said it.
He literally said it.
I mean, I don't know.
How else am I supposed to take?
I need the first black woman.
Am I supposed to take that?
Like, does he not need the first black woman?
You'll notice that at the beginning of this particular episode, I put the phrase black woman in air quotes.
The reason I put that in air quotes is because that's a Joe Biden quote.
Like it is affirmative action.
I don't know what else to tell you.
I mean, they quote me saying it is definitionally affirmative action and race discrimination, which of course it is.
But then Aaron Blake goes on and he says, well, you know, there have been other presidents who have done this.
Yes, and it was bad when they did it.
Ronald Reagan promised you to appoint a woman to the Supreme Court in the 1980 presidential campaign.
And then he ended up appointing Sandra Day O'Connor, who was a joke and a terrible justice.
George H.W.
Bush picked Clarence Thomas, but Clarence Thomas happens to be a really, really good justice.
And the fact that we have these sort of designated seats is ridiculous.
It's ridiculous on its face.
It's really stupid.
And meanwhile, Jen Psaki is suggesting that the GOP is obliterating their own credibility by criticizing Biden's pick.
Well, no, we are criticizing him for saying that he will only look at the race and sex of a person as a as a predominant characteristic.
And also, we think that you're just going to select a Democratic apparatchik who's going to do whatever you want, because that's what you guys do.
Again, Democrats never miss on this stuff because they just find somebody who agrees with them politically and then appoint that person to the Supreme Court knowing they don't care about the Constitution.
We have not put out a list.
The president made very clear he has not made a selection.
If anyone is saying they plan to characterize whoever he nominates after consideration with both parties as radical before they know literally anything about who she is, they just obliterated their own credibility.
Oh man, talk about obliterating your own credibility.
Jen Psaki, every single, that should be the title of her autobiography, Obliterating My Credibility, Jen Psaki Story.
Wow.
And by the way, speaking of obliterating your credibility, it is fairly incredible that they are now attempting to go after Ilya Shapiro.
He's been a guest on this program, of course.
He is from Cato Institute.
And now he is about to be a lecturer at Georgetown University.
What did he do wrong?
He said, quote, Objectively, best pick for Biden is Sri Srinivasan, who is a solid progressive and very smart, even has identity politics benefit of being the first Asian slash Indian American.
But alas, doesn't fit into the latest intersectional hierarchy.
So we'll get a lesser black woman.
Thank heavens for small favors.
The fact that he used lesser black woman.
They're now saying that he's racist.
What he meant is a black woman with lesser credentials.
Obviously, obviously.
But none of it matters.
They're trying to basically oust him from his position over at Georgetown anyway.
So you have a guy named Mark Joseph Stern, who's tweeting out, he says that Georgetown law has hired him, so I feel an obligation to condemn him as a staff writer at Slate trying to get Ilya Shapiro canceled from his job because he is making clear that the Biden administration is picking somebody who's less qualified, at least, than the person that he described there.
Again, affirmative action for Democrats.
It only works one way.
It's not affirmative action when they do it, even if they say it's affirmative action.
Meanwhile, we all know the real reason, by the way, that they somehow convinced Justice Breyer to step down.
The real reason they convinced him to step down is because they're about to get walloped.
There's a brand new poll out of Georgia today from the Atlanta Journal-Constitution and the University of Georgia, and it finds Governor Brian Kemp right now up on Stacey Abrams by seven points, despite all the controversy surrounding Kemp.
Even Senator Perdue, the ex-Senator, he beats Stacey Abrams by four.
Meanwhile, in the Senate, Herschel Walker is up three on Senator Raphael Warnock, 47 to 44.
And according to polling data, actually, only 21% of Georgians say that an endorsement from Trump would make a candidate more attractive to them.
Only 21%, 49% say that it would make a candidate less attractive to them.
Now you assume that that includes, you know, all the Democrats, but here's the bottom line.
If you look at the approved versus disapproved ratings for various members of the Georgia delegation, they're not great for the Democrats.
Ossoff is at 43, Warnock is at 44, Biden is at 34.
So things are likely to get extremely ugly for Raphael Warnock in Georgia before things are over.
Meanwhile, in Nevada, it looks like things are really ugly.
By the way, it is also true that the Democrats have now engaged in precisely the same strategy that Donald Trump engaged in the Georgia election earlier this year.
So you remember, Donald Trump, after he did not win Georgia, after that happened, he came out and he said that was because of voter fraud and your vote really doesn't count in Georgia.
And a bunch of Republicans stayed home for the Senate elections, which is why you have now two blue senators from a red state.
And that was because Donald Trump intervened and people from the rural areas did not vote in that senatorial election, which is a foolish move.
Now Democrats are like, hey, let's do it too.
Apparently, according to a new Quinnipiac poll, 45% of black voters in Georgia think it will be somewhat or very difficult to vote.
Hey, now, how many believe that in 2020?
7%.
7%.
7% of black Democrats, sorry, not black Democrats, 7% of black voters in Georgia total Said that they thought it was very difficult to vote in 2020.
Now 45% say it is very difficult to vote.
How many of those people are going to stay home just because they believe it's difficult to vote?
So brilliant strategies here from the Biden administration.
Just genius, genius stuff.
It is incredible how this administration just keeps shooting itself directly in the foot over and over and over again.
You know, if you shoot yourself in the foot, you shouldn't be surprised when your foot hurts.
And that's exactly what is happening right now.
And they can't stop, won't stop.
I mean, Biden's Surgeon General literally came out yesterday and said that he wants Joe Rogan censored by big tech.
Like, I'm sorry, this is not the way you win hearts and minds here, gang.
We've got to do several things.
Number one, we've got to recognize that our technology platforms, particularly social media, these have an important role to play.
These are the predominant places where we're seeing misinformation spread.
These platforms have still not stepped up to do the right thing and do enough, I should say, to reduce the spread of misinformation.
This is not just about entertainment.
It's not just about garnering clicks.
This is about people's lives.
And we have seen time and time again that misinformation costs people their lives.
So you have the Surgeon General of the United States calling for censorship of Joe Rogan.
Keep going with this, guys.
You have your narratives.
Your narratives are completely at war with the experience of the American people.
Keep trying to convince them not to believe the evidence of their own eyes.
Alrighty, we'll be back here later today for an additional hour of content.
First, you can't forget to end your week by tuning in to The Andrew Klavan Show.
Bruce shows every Friday.
He's got an exciting evening planned for you.
So head on over to dailywire.com, 7 p.m.
Eastern, 6 p.m.
Central, and tune in.
I'm Ben Shapiro.
Shapiro, this is the Ben Shapiro Show.
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