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Dec. 8, 2022 - The Megyn Kelly Show
01:41:37
20221208_dismal-state-of-americas-economy-and-harry-and-meg
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Credit Card Debt and Unemployment 00:15:24
Welcome to the Megan Kelly Show, your home for open, honest, and provocative conversations.
Hey, everyone, I'm Megan Kelly.
Welcome to the Megan Kelly Show, and happy Thursday.
Inflation in America is expected to get worse, and we may be headed toward our worst ever recession.
Those are the latest warnings from economist Peter Schiff, who will be here in one minute.
Heavy stuff.
Thankfully, Adam Carolla is also here.
He's going to join us just a bit later to help brighten the mood after we bring you the tough economic news.
But first, Peter's here to discuss the nightmare that we are heading into when the new year hits.
And we really need to worry about this.
If you have a 401k, you need to worry about it.
If you have a job you're worried about, you need to pay attention to this.
If you're trying to get a job, pay attention.
If you have a house, there are all sorts of reasons why we need to be looking at this forecast.
Plus, we'll get into the latest on the SBF scandal rocking the crypto world.
Peter is the chief global strategist for Euro-Pacific Asset Management.
Peter Schiff, welcome back to the show.
Oh, thanks, Megan, for having me on again.
It's always a pleasure.
The pleasure is all mine.
So let me start with this.
Our president, Joe Biden, is feeling optimistic about the economy.
He's feeling kind of sunny.
Here's how he summed up our soon-to-be-experienced interaction with the economy.
Listen to this.
What I'm most excited about is people are starting to feel a sense of optimism as they see the impact of the achievements in their own lives.
It's going to accelerate months ahead.
And it's part of the broad story about the economy we're building that works for everyone.
So reason to feel good.
I understand you don't agree.
Well, remember, incumbent in presidents always claim that the economy is great while they're in office.
You know, if the circumstances were identical and Donald Trump was still president, Biden would be criticizing the very economy that he's now touting.
So how are we doing, though?
Because I understand, I mean, we had some warnings, right?
Jamie Dimon, the J.P. Morgan CEO, said inflation could tip the economy into a recession next year.
You seem to think he's understating it.
Yeah, well, I think the economy is in horrible shape.
I think that's one of the reasons that President Biden is so unpopular, because I think a lot of the people who are struggling in this economy in part blame the president.
He's not solely responsible, but he certainly hasn't done anything to help.
Everything he's done has actually taken a bad situation and made it worse.
But if you look objectively at the data, the savings rate is at the lowest it's been since 2007.
I think it's down to 2.3%.
So Americans have blown through all their stimulus money and now they're pretty much broke.
If you look at credit card debt, it's at an all-time record high.
So Americans are struggling to put food on the table and to pay the electric bill.
And so they're borrowing more money on their credit cards.
If you look at what's happening to wages, they are declining in real terms.
And I think the real decline is being masked by the fact that we are understating inflation.
I think the actual inflation rate is about double what the government will admit to.
And that means that the real decline in wages is much greater, which explains why so many people are now moonlighting.
A record number of Americans have two and three jobs.
In fact, you have more Americans than ever that are working two full-time jobs.
Most people don't want multiple jobs.
They would prefer to be able to support themselves and their family on one job.
But unfortunately, in the Biden economy, that's not possible.
And that's where all these jobs that are being created are going.
They're going to people who don't want more jobs, but who are forced to take them anyway, because that's the only way that they can keep up with the rising cost of living.
That's amazing because the jobs report has been touted.
The November jobs report has been touted by the administration and even some of their critics as the sign of something good to come.
The November report said the labor market looks strong.
The economy added 263,000 jobs in November, well above the 200,000 job projection.
And the employment rate now, very flat at 3.7%.
And that led the president to brag about how they're creating jobs.
And you can hear him sounding very optimistic.
Those numbers on paper, they do look good, but you're saying you have to dig a little deeper.
Yeah, they're being very disingenuous.
And that's a nice way of putting it about these numbers because the implication is that, oh, 260,000 people who didn't have jobs, who were unemployed, now they've got jobs.
That's not what happened.
All of those jobs went to people who were already employed.
They are part-time jobs.
That's what's happening.
And it's not a great economy where people who have jobs need to get a second job.
They would rather have the leisure.
They would rather be able to spend more time with their families.
But unfortunately, they can't afford that.
They have to go and get another job.
And that is where these jobs are coming from.
If people come out of retirement, let's say somebody was retired, they're 70 years old, they were looking forward to just playing golf and going to the beach and hanging out with their grandkids, but now they have to go take a job at Target because that's the only way to pay the grocery bill.
Do you want to brag about creating an economy where unemployed people are forced to go back into the workforce?
Well, what about the unemployment rate, right?
They're saying it's nice and low, 3.7%.
You know, this is some employers complain about this because they say they can't find good workers.
That suggests all the jobs are filled and people are working to the extent they want to work.
Well, the main reason that the unemployment rate is so low is so many people who aren't working are not counted as being unemployed.
We have over 100 million working-age Americans who are no longer in the labor market.
The labor force isn't that, isn't that now the current narrative is that those people, unlike in some past, you know, low economic periods where they couldn't get jobs, people weren't whatever.
These are supposedly people who have decided, you know, post-pandemic, they saw the light, they love the couch, they want to sit there, they could take a job, but they've just decided to be in their happy place when it comes to workload now.
Yeah, well, I'm sure for some people, that may be the case.
Maybe they have a better alternative.
Maybe they can live off of welfare and housing vouchers and SNAP benefits.
Maybe they find that a better alternative than having to actually work for a living.
But I'm sure a lot of the people there are just discouraged workers.
You don't count.
If you've basically given up looking for a job because you don't think there's a job out there that you're qualified for at a wage that makes sense for you to take the job, after a year, you don't count even in the U6 number, which is not the number that you just cited.
If you look at the U6 number, which includes discouraged workers and people who are only working part-time, but would prefer to work full-time and who are still looking for full-time employment but can't find it, there the unemployment rate, I think, is closer to 7%.
But even that unemployment rate, once you've been discouraged for over a year, you're no longer counted in that number either.
So I think if you objectively measured the unemployment rate and included all the people who are not working, but who would be working if they believe they can find a job or who have settled for a part-time job when they prefer a full-time job, I'm sure the actual unemployment rate is in the double digits.
What about you mentioned the savings and the reports I read, CNBC claims that consumers have 1.5 trillion right now in excess savings from the pandemic stimulus programs, but that it's going to run out at some point soon.
But if they've got 1.5 trillion still right now in excess savings, I mean, how does that compare to where we were?
And it doesn't support what you said, which is that money ran out.
Yeah, the savings rate, again, is 2.3%.
That's the most recent number that was released last week by the government.
We haven't had savings that low since 2005.
But one of the reasons that Americans weren't saving in 2005 is because they had so much home equity.
They were just getting rich off the real estate.
That was the peak of the real estate bubble.
But right now, Americans are losing their home equity.
Real estate prices are now falling.
But what's more problematic is real wages are falling because the cost of living is going up and credit card debt has exploded.
So if Americans really had all this savings, credit card debt wouldn't be skyrocketing.
The reason credit card debt is going up so much is because people don't have savings.
They can't afford to buy things.
They have to borrow the money.
But more of the money that they're borrowing is being spent on food.
It's being spent on electricity, on gas.
I mean, look at all the big retailers that are reporting that their customers are spending more money on food and less money on everything else because food is so expensive.
The credit card situation is scary.
I have been in deep credit card debt back in my law school days when I had to put myself through school and support myself at the same time.
And it's a sickening feeling to see those cards run up.
And the people who run it up, yes, there are some who are just spendthrifts, but the vast majority of people, I think, who have enormous credit card debt are buying things they do need and they'd rather not have it on credit, but they don't have the cash.
And it's stomach turning to see the bills run up and to see the interest rates go up and the interest rates go up and up and up.
And I can only imagine it would make people feel kind of angry at the Fed for, you know, every time they raise one of these rates, you owe more.
Yeah, you're looking at credit card rates now that are about 20%.
And that is a huge amount of interest to pay.
And, you know, I think a lot of people today have a lot more consumer debt than just their credit card debt, because over the last few years, a lot of these buy now pay later companies have come into existence.
And so people are using those companies to buy stuff without money, but it doesn't show up in the credit card numbers because it's not credit card debt, but it's still debt that the consumer is obligated to repay.
And I don't believe they're going to be able to do it.
I mean, it seems insurmountable.
So as you see these credit card repayments get to these astronomical levels where people are not going to be able to pay that, they're just not.
What happens?
You know, is there some credit card default crisis that is the mirror image of the housing crisis?
You referenced 2005 and going into the 2008 collapse.
What's going to happen with all that credit card debt?
Yeah, you know, the credit card debt is non-secure.
So if you don't pay it, the credit card company, you know, they can't come after your assets.
They can't put a lien on your house or try to go after your IRA.
So the debt is very difficult to collect if the person doesn't have any money.
And it's also dischargeable in bankruptcy.
So we haven't seen a big spike up in credit card delinquencies, but I think that's coming in 2023.
And what also happens with credit card debt is once somebody with credit card debt recognizes that they can't pay it back and they've decided they're not going to pay it back or that they're going to file for bankruptcy.
What they will do before is max out their credit cards.
They'll just borrow as much money as they can because whatever they're buying, they're getting for free.
So if you're planning on going bankrupt and you have 50,000 worth of credit card debt, but you still have another 50,000 that you can borrow, well, you're going to do it.
You're going to go out and spend the other 50,000 and buy as much stuff as you can because when you go bankrupt, you don't have to return that stuff.
If you go out and you buy a bunch of clothes and some consumer electronics or take a vacation and then you file for bankruptcy, you don't have to give any of that stuff back.
And it makes sense that before you file for bankruptcy to buy as much as you can, because once you declare bankruptcy, you're not going to get any new credit cards for a while.
So you might as well buy everything you can before you go bankrupt.
So you get that moral hazard that's going to accelerate the losses for the banks that are issuing the credit.
That is a moral hazard.
So I don't, explain to me why there are these predictions by you, by Jamie Dimon, of others of an impending recession when the Fed is doing everything it can to prevent that.
It's raising interest rates every week, it seems now.
It's up 4% now and more coming.
So that was supposed to combat the amount of money flowing around in the economy, chasing too few goods by saying to people who would otherwise have borrowed money or spent money, whoa, whoa, wait, I don't want to do that now.
And we're seeing layoffs at companies.
So it seems like, okay, that's maybe part of the plan.
So is it not going according to plan?
Well, I'm not even sure they have a plan, but I think we're already in a recession and the rate increases that you're talking about are partially responsible for that recession.
I think the recession is going to get a lot worse.
Now, that doesn't mean the Fed shouldn't be raising rates.
They should be.
They should already have raised them a lot more than they have.
The problem was they never should have cut them.
That was the mistake.
It was cutting rates.
Raising them back up is really just an acknowledgement of that mistake.
But what happens is when the Fed raises rates, it uncovers all of the problems that it created when it reduced rates.
Because when it slashed interest rates to zero, it inflated a bubble economy and it inflated it with inflation.
Quantitative easing was inflation.
It's just another word to describe inflation.
It's just that a lot of people don't realize that it is inflation because inflation has a bad connotation to it.
And so quantitative easing doesn't sound as bad.
If the Fed said our policy is to create inflation, the public would have said, wait a minute, I don't want inflation.
So if they say, well, our policy is quantitative easing, then you don't have as many people critical of the policy.
But we're now experiencing the consequences of that inflation, rising prices, and prices still have a long way to go.
Falling Yields and Dollar Runs 00:02:49
And that's one of the reasons I think that the recession is going to get a lot worse because more consumer income is going to be diverted to necessities like food, energy, rent, insurance, things like that.
And interest rates are going to have to keep rising.
And that's also going to take a lot of purchasing power out of the economy because people have to service their debt.
And if you're spending money, paying interest on the money you borrowed to buy stuff in the past, you have less money left over to buy stuff in the present and in the future.
And that's what helps bring about a more severe recession.
So what does all this do for, let's say, people their 401ks, the stock market?
Because that's been all over the place.
Well, most people's stock portfolios are going to continue to fall.
Most people who own stocks, unfortunately, own the most overvalued stocks.
Big tech, for example, those are the stocks that went up the most because interest rates were zero and people thought that inflation would be low forever.
Well, now that interest rates are not zero and inflation is here and getting worse, those stock valuations are coming down.
I think they still have a long way to fall.
So most people will lose money in the stock market.
I think they'll fare even worse in the bond market.
Even though yields are higher now on bonds, they're not nearly high enough to offset inflation.
So people are going to lose a lot in bonds.
So they have to start thinking outside the box and look towards alternative types of investing.
You can still invest in stocks, but you can't invest in the indexes that are so dominated by overpriced tech names.
You have to, you know, be more discriminating in the stocks you buy.
You have to select the stocks based on value and dividend yield and just build your own portfolio rather than just buying these indexes.
And I think the best values are had abroad.
I think the highest dividend yields are outside the U.S.
And I think that also gives you the benefit of a hedge against what I believe is going to be a very weak U.S. dollar.
The dollar is up on the year, but it's losing those gains rapidly.
But I think over the next several years, we're going to see a very weak dollar as the markets come to terms with the reality that inflation is not only going to get higher, but it's here to stay.
It's not going back down to 2%.
And that's going to result in a run on the dollar, I think, and on U.S. dollar-denominated assets, especially when the Federal Reserve actually has to go back to quantitative easing, which is creating more inflation because the economy gets so bad that it actually turns into a financial crisis.
Mortgage Costs and Home Ownership 00:13:51
And now the Fed is under a lot of pressure to try to stimulate the economy.
But the only way it can do that is by creating even more inflation.
Right, right.
It's not a good situation for them.
And meanwhile, we're getting reports every day of more layoffs.
And this is really concerning.
I mean, right before Christmas, I just, the pain of getting of losing your job with these kinds of numbers and this kind of inflation has got to hurt.
These are just some examples on the subject of investment banks.
Morgan Stanley reportedly laying off 2% of its global staff.
That's around 2,000 of its people.
BuzzFeed, the journalistic operation, they're expected to lay off about 180 employees.
It's not just BuzzFeed, they own HuffPo and some other networks.
Pepsi, eliminating hundreds of jobs.
This is according to Forbes.com.
Gannett, parent company of USA Today, Detroit Free Press and others has begun laying off employees estimated to affect about 6% of their 3,400 person media division.
They already let go of 400 folks in August.
CNN is cutting people by the day.
I've read other reports suggesting could be hundreds of jobs.
They are lost.
Amazon planning to lay off as many as 10,000 employees.
My God.
Disney's on a hiring freeze or is about to implement one.
Meta, Mark Zuckerberg's company, you know, formerly known as Facebook, is going to lay off 13% of its workforce or 11,000 employees.
So people are losing their jobs.
Now, just in Lehman's term, explain to me why.
Why are we having all these layoffs?
Well, first of all, just to point to the jobs that are being lost, these are full-time jobs, high-paying jobs with benefits.
The jobs that we're creating are part-time jobs with low pay and no benefits.
So it's not, you know, I can even trade off when you look at the jobs we're losing and the jobs that are being created to replace those lost jobs.
But I think this is just early in the layoffs.
I think the layoffs are going to be very widespread.
And in fact, some companies are going to be laying off 100% of their workforce because they're going to be going bankrupt.
But a lot of companies are going to be laying off a lot of workers to avoid going bankrupt because they have to start cutting their costs.
And one of the costs that they can cut is labor.
And so when you cut your labor, you have to eliminate employees.
And the reason for this is that companies' real sales are going down because their customers are broke.
So they can't afford to buy as many products.
And so the companies selling those products or services don't need as many workers to help provide those goods and services.
And employers are looking at higher interest rates if they've borrowed money, which a lot of employers have borrowed money to buy capital equipment that they might need.
Their rent might be going up on their office space and their other raw material costs are rising.
And so they have to figure out how to get by because businesses need to generate a profit because that's the way the owners of the business make money off the business.
And if they don't have a profit, they have to figure out how to create one or they're going to go out of business.
And so one way would be to scale back the size of the business.
And that means reducing your headcount.
And that's going to go on across the economy.
And of course, there are a lot of companies that never should have been created in the first place that only were created as a consequence of monetary policy, of cheap money, and the casino-like environment that the Fed created in the stock market.
You have a lot of companies that have never made any money, but they have a lot of employees.
How were they able to pay these employees if they had no money to pay them with?
Well, they were selling stocks to investors and they were using that money to pay their workers.
But if the appetite for shares of money-losing companies is no longer there, a lot of these companies aren't going to be able to stay in business.
And to the extent that they can stay in business, it will only be if they can dramatically downsize their operations and start generating a profit.
And that probably means they have to eliminate most of their workforce.
Like, what kinds of companies are you talking about?
Well, a lot of these social media type companies or tech companies or, you know, last year, I think we had a record in money-losing companies that went public.
I mean, normally you wouldn't go public until you had been able to prove the viability of your company, that you're a profitable company and you just want to get more money so that you can scale it up.
But you had all these companies that never proved anything other than the fact that they can lose money and they went public.
And I think a lot of these companies are going to go from IPO to bankruptcy in a relatively short period of time.
So do you think that these layoffs are in fact necessary?
Because I read something suggesting they don't really need to be doing this.
They're just using the downturn in the economy as an excuse to turf a lot of deadweight.
Well, I mean, they don't need excuses.
If employers are going to look at their workforce and if employees are not contributing to the company, then there's no reason to employ them.
I mean, you hire somebody because they're going to help increase your profits.
And so employers are going to objectively look at the value workers bring to the table and what it costs to employ them.
And if it's a losing proposition for the employer, then the job is going to get eliminated.
But when workers are not employed productively, it's good for the economy.
if those jobs are eliminated, because what happens is that worker is now freed up to do something else.
Because if I'm working at a job, but I'm not actually adding value to the company, I'm subtracting value, then my labor is actually being wasted.
I need my labor to be utilized more productively by another business that has a better use for it.
But the problem is with all the government regulations and taxes, it's a lot harder for labor to go to its highest and best use.
And so a lot of times people end up trapped in an unemployed situation because of government.
So I mentioned this is happening right around the holidays, which is never a great time to get laid off, but right before the holidays is especially painful.
So how's all of this affecting like inflation right now, affecting holiday shopping?
You know, we heard it was a record Black Friday, Cyber Monday.
That's supposed to be a great stimulant.
How does the holidays play into all this?
Well, first of all, it was only record spending because of the inflation.
And if you adjust it for inflation, it wasn't a record at all.
Spending was down because prices were up.
So if you're paying higher prices, then obviously you're spending more.
But you could be buying less.
You're just paying more for what you're buying.
And that's what happened on this Black Friday or Cyber Monday.
But I think the rest of the holiday season is going to be a dud from the point of view of the retailers.
I think people are going to spend less.
And layoffs, I think, are going to pick up quite a bit in January because I think employers are reluctant to lay people off going into the holidays.
I mean, nobody wants to be scrooge and do that.
So I think that a lot of these decisions are postponed to January.
And I would expect a lot of people are going to be getting pink slips if they still mail those things out in January.
And 2023.
They DM you your pink slip.
What about housing, Peter?
Because, you know, the housing market has held relatively steady over the past few years, even though there were some dire predictions.
But you're starting to hear reports that that's shifting.
The value of homes is going down, that sales prices are going down.
And that's something a lot of people watch very closely.
So what do you predict there?
Well, I mean, they have to go down.
You know, people buy homes, the vast majority of Americans who buy homes use a mortgage.
They don't have the money to buy a house.
They don't even have the money for a down payment.
The average down payment has been, I think, 5% now.
It used to be 20%, but people don't have the savings to put down 20%.
So they're borrowing the money.
So the most important factor in home affordability isn't the price of the house, but the mortgage rate.
And mortgage rates, you know, a year ago were in the low threes.
Now they're almost seven.
You've had a doubling in the interest on a mortgage.
And that dramatically reduces how much somebody can pay for a house.
And so home prices are going to have to fall sharply because that's the only way anybody can afford to buy them.
Now, of course, there won't be a lot of homes on the market for a while because people are not going to build them because it's too expensive to build them and people can't afford to buy them.
And a lot of the people who own homes don't want to leave because if they sell their house, they can't buy another one because the mortgage on the new house could be double the mortgage they have on their current house.
So they're kind of stuck.
So that's helping to mitigate the supply a bit.
But ultimately, I think the prices are going to be determined by demand and what people are able to pay.
And with higher mortgage rates, they're able to pay a lot less.
And so prices are going to come down a lot.
And that means home equity is going to vanish for a lot of people who are in their homes.
They're not going to have all that equity.
And that's going to have a big impact psychologically on their saving and their spending, on their ability to use their house as an asset for a loan or something like that.
But even though home prices are going to be coming down, the cost of home ownership is going to be going way up because even if you buy a house that's gone down 20 or 30 percent, based on where mortgages are, your monthly payment will still be higher than the payment would have been had you bought the house a year or two ago at a lower price, but with a much lower mortgage.
But the mortgage is not the whole cost of home ownership.
You got to pay insurance.
Insurance rates are skyrocketing.
I mean, the insurance on my own house in Connecticut in one year was up 40%.
And people have sent me copies of their homeowner's insurance that has gone up a lot more than that.
So insurance costs are skyrocketing.
Maintenance costs, if something goes wrong with your house and you need to fix it, the cost of repairing anything, the parts, the material, the labor, all of that has gone way up.
Property taxes are going up.
Your utility bill, the cost to heat the house, to air condition, everything is going up.
So home ownership is getting a lot more expensive.
And so fewer and fewer Americans will be able to afford to own a home, let alone buy one.
So just to put a period at the end of that, after the pandemic, like kind of during the pandemic and then in 2021, we saw a rush to the suburbs, to more rural areas, to, you know, kinder, gentler, nature-riddled towns because people wanted to be outside and they were, they've learned the hard way that it's not so great to be in a small apartment where you can't leave.
And those pockets, the homes went like this in value, right?
You could get so much more for your home if you were lucky enough to own one in an area like that.
So is that over?
You know, that sort of huge spike in, let's say, you have a property in Florida or you have a property in the mountains or at the beach or just something more suburban and country-esque.
Well, you know, there's still going to be some appeal from that perspective to have a larger home where you can work from home and you have more room for your kids if they're, you know, if they're homeschooled or something like that.
But I think that a lot of the people who rushed from the cities and maybe they were renters and they bought places out in the country or the suburbs, they had no idea how expensive it really is to maintain those properties.
You know, I own some homes and I can tell you from experience, you know, they're money pits.
They cost a lot of money because stuff is constantly going wrong with your house.
And so people probably bid off a lot more than they can chew.
And if some of these people have buyers' remorse and maybe they want to sell their property, it's going to be difficult in an environment where interest rates have doubled.
And of course, a lot of other potential homeowners are going to be losing their jobs.
So unemployed people have a hard time making their mortgage payments.
It's very hard.
Honestly, like we can pay our bills, but it's stressful even for us.
So I can't imagine what it's like when you're really struggling paycheck to paycheck.
Even at our house, there was a problem with the HVAC system, and those are expensive.
That's an expensive fix.
And my husband's looking at the bill, like RG.
And then I just noticed that my sink in my bathroom sprung a leak and it was very leaky.
And I just chose not to tell Doug because he was already kind of mad.
But then he made the mistake of using my sink and he found out anyway.
I was like, oh, I was just going to stick some gum on it.
I don't, we're not particularly handy, he and I.
So I understand.
It's no laughing matter for any American.
FTX Fraud and Bitcoin Funds 00:15:33
And my heart goes out because it sounds like we're all going to be going from bad to worse.
Listen, let's pick it up after this break.
I'm dying to talk to you about what's happening with crypto.
You know, I've talked about it before.
We haven't talked about SBF yet and what's happening with this guy.
And now he's saying he will not testify before Congress, even though he'll speak to any slobbering love affair media person, but he won't speak to Congress.
Why?
We'll pick that up right after this quick, quick break.
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Hello, OOS.
So, Peter, crypto seems to be imploding, and certainly we've seen this San Bankman-Freed company, FTX, implode, officially filing for bankruptcy.
And he has now lawyered up and how he's hired Ghelane Maxwell's attorney to defend him.
He's also saying, Don't expect me anytime soon at your congressional hearings, which is probably the first sensible thing he has said since getting caught in this entire mess.
And here's what's interesting to me: I know you're not a lawyer, but as a lawyer, you know, you're an economic expert, so it'd be a good discussion, I think, on this between the two of us.
I can see him in these interviews repeatedly trying to lay the foundation for there was no intent.
I didn't know that this was going on.
I'm a mismanager.
I'm not a fraud, you're a fraudulent manager.
And so, that's why he made admissions like this one to George Stephanopoulos with Stephanopoulos.
He was like, Extraordinary.
But really, it was 100% by design.
Here's the soundbite.
You said one of your great talents in a podcast was managing risk.
That's right.
And that's obviously wrong.
Well, I think that there is something maybe even deeper wrong there, which was I wasn't even trying.
Like, I wasn't spending any time or effort trying to manage risk on FTX.
And that obviously, yeah, I mean, it, I don't know what to say.
Like, what happened happened?
And like, if I had been, if I had been spending an hour a day thinking about risk management on FTX, I don't think that would have happened.
I think I stopped working as hard for a bit.
You know, honestly, if I look back on myself, I think I got a little cocky.
Okay.
So why is he saying that?
He's saying that because he had reportedly a $32 billion company that's now worth maybe zero.
And there are billions of dollars of investor funds that are apparently missing and unaccounted for.
And they're now bankrupt.
And there's not only going to be civil lawsuits, we've already seen some filed, but there's going to be SEC actions.
There's more than likely going to be criminal charges against him.
And he's really hoping that fraud, criminal fraud, which is the big kahuna charge, does not get brought against him because he wasn't ill-minded.
He was just absent-minded.
Do you read it the same way?
Well, I don't blame him for not wanting to testify before Congress because remember, if he does that, he's going to be under oath.
And given the number of lies he's likely telling, I don't think he wants to add perjury to his list of crimes.
But I also think he is ultimately hurting his defense by doing so many interviews because he's bound to contradict himself here and there.
And he's probably undermining some part of his future defense because he's putting out so much information.
But, you know, if you're going to believe that this guy was an honest kid who was just a completely incompetent guy who had no idea what he was doing, you know, I have a hard time believing he was that ignorant and he was just that naive.
And to me, it's even worse.
If you think about all of the supposedly sophisticated guys, hedge funds, investors that gave him money, that entrusted him with millions, hundreds of millions of dollars.
If they really entrusted their money with that much of a fool, I mean, to me, that's even worse than giving it to a con man who at least lied to you and then stole your money.
If he was just so incompetent and he lost it, you know, but it just shows you how foolish the crypto community is and how much of their money is going to be lost.
I mean, the fact that...
Wait, well, hold on.
Hold that thought.
I want to get to that one second, but I will say this.
He seems to be setting up the ex-girlfriend for the fall.
She's the one running, well, who was running Alameda, the hedge fund that was like the sister company to his company, FTX.
And it was FTX's money that was reportedly used to cover losses at Alameda.
And they were lovers too for a period of time.
And he seems to be getting ready to say it was all her fault.
She's the mismanager or the fraudster.
I was just this scatter-brained, you know, boy genius.
I set up the company that was working.
Then she started funneling funds.
And that's an interesting dynamic for a lawyer because then you're like, great, one of these people is going to flip on the other.
So far, no one has.
So far, none is in the country.
They're all in the Bahamas or elsewhere.
She's no longer in the Bahamas, reportedly.
And so you try to get to the first one you can and get him to flip ASAP.
Yeah, like I don't think the strategy of blaming the girlfriend is going to work.
I think it's more likely that she's going to rat him out in exchange for immunity because he's the bigger target.
And I mean, who's going to believe that she was the mastermind of the whole thing and he was just this innocent guy along for the ride?
I mean, I mean, nobody is going to believe that.
Certainly, I don't think you're going to find a jury that's going to buy that.
Well, what about the thing is, so, okay, if he doesn't get a fraud charge against him, you know, you're in this business, not crypto, but you think the business of investing.
You are not allowed to misuse customer funds.
If I give you funds and say, please invest, you can't then just take the money and go buy your Christmas presents with it.
That would be a misappropriation of funds.
You have a fiduciary duty as a hedge fund manager to your clients.
And there were explicit promises that the money would not be used in any way other than it was promised, which is on the FTX exchange.
So eliminating malintent as an element that could be used against you does not save you from the criminal law.
And I would imagine that virtually everybody who's in the investment business knows that.
Yeah, well, you know, most of the losses, you know, the mom and pops who lost money, they weren't in a hedge fund.
They were using FTX as an exchange and they had deposited their, you know, crypto or whatever they held with FTX.
Now, you know, when you put your money with a bank, right?
The bank makes a loan that takes your money and they loan it out and they could lose it.
You're a creditor of a bank.
Banks are allowed to loan out your money.
What they're not allowed to do is take your money and use it, you know, just to go out and buy Christmas presents for the executives.
I mean, but they are allowed to loan it out.
And so the question is, what did Sam Bankman Freed represent to his customers was going to happen with their money or their tokens on his platform?
Because, you know, if he's not going to be able to do that.
Well, I think we know that.
I think the answer is he represented to them, it will not be moved and it will not be used.
It'll be here when you want it.
So then if that's what he did, then yes, that's a fraud.
It's civil fraud on the customers because the customers were told one thing and what he did, he did the opposite.
But what would be theft, embezzlement, a real crime would be if he took that money out of those accounts and then bought, you know, a beach house in the Bahamas, right, for his own personal use, right?
One of the allegations.
Or he gave it to Democratic politicians for campaign donations, right?
You're not supposed to do that with the money.
That to me would seem to be a criminal misuse of that money if you misappropriated it, right?
Embezzled it and then you did something with it.
Yeah, to giving it to politicians or to the media, which is the other group he tried to buy and have be loyal to him.
And they are still being loyal to him.
If you look at the press coverage of this guy, it's absurd how the media has been bending over backwards to try to make excuses for this guy.
You know, even Andrew Ross Sorkin of CNBC, who gave him a challenging interview the other day at this New York Times summit, ended it in, you know, the Bernie Goldberg slobbering love affair.
It was like, you're saying goodbye right now to a guy who is accused of defrauding who knows how many investors of their hard-earned cash in a massive scheme that you hid from the entire world while you represented yourself to be some altruistic guy.
Here's just as a sample, this was the toughest interview he's had yet.
Here's how it ended.
On behalf of everybody here and on behalf of the public, I want to thank you for engaging in it at a time, in truth, when I know you've been advised not to.
So thank you so very, very much.
Thank you.
Sam Bankman Freed, everybody.
And then applause.
Applause.
That tells you what the audience thought about the tough interview.
They say no problem.
They're like, yes, great.
Thank you so much.
F you.
That's what they should have been saying.
Screw you and the fraud you wrote in on.
Obviously, the people clapping didn't have any money with FTX or they would not be clapping at.
Because the thing is, Peter, can you imagine people clapping for Bernie Madoff?
Nobody would.
Let's get ready for this, for your gracious success.
You don't thank him.
But if you go back and look at the way CNBC covered Bankman Freed for the last year or two, this guy was the second coming of Jesus as far as they were concerned.
They were praising him.
They were never critical of anything he did.
They never took a skeptical position, no matter how absurd some of the stuff that he was doing and claiming to do and the interviews.
I mean, his whole personality was a lie.
The whole thing was a con.
This idea that he was this altruist that was earning to give, that he wanted nothing for himself, that he drove an old beat up Toyota Corolla and lived with 10 roommates was absurd.
This guy was living the high life in a penthouse in Albany with all the luxury.
I mean, if you look at that house, I mean, it would make Donald Trump blush.
Look at some of the pictures of how opulent this guy was living.
And he was not just some frugal do-gooder who just cared about other people and wanted nothing for himself.
And that was all part of his lie.
And now the media doesn't want to acknowledge how easily they were duped by this guy.
But the worst part about it is I'm sure we're going to end up with more government regulation as a result of this.
And that's the last thing we need.
We don't need more government.
We need less government.
We need more personal responsibility.
Individual investors have to do their homework before they just throw their money to what is really an obvious fraud.
This is not the government.
The government would have prevented this from happening.
Bernie Madoff was not the SEC.
He was regulated by FINRA and he pulled off a giant Ponzi scheme right under the nose of the regulators.
You know, we didn't even have the SEC until 1934.
The New York Stock Exchange started in 1796.
So we had a New York Stock Exchange for almost 140 years without an SEC.
And I think we had a better market back then.
I think there was less fraud before the SEC than there is with it.
And by the way, he wouldn't have been subject to those regulations anyway because he was based in the Bahamas.
So that wouldn't have solved it in his case.
But yeah.
So let's end it on a bigger discussion of crypto because his is not the only crypto firm to go down.
You know, Bitcoin now is what, you know, one tenth of what it was a year ago.
I'm trying to do the math in my head, but they're all going down, several declaring bankruptcy, folding.
What's happening and what's going to happen in crypto?
Well, crypto was a gigantic bubble.
It was one of the bubbles that was a consequence of the Fed's cheap money policies.
And when we spoke earlier about a lot of companies that I think are going to be going bankrupt and laying off all their workers, that's pretty much going to be the case for almost every company in crypto and blockchain.
These companies never should have been started and they're going to go out of business and all their employees are going to lose their jobs.
And a lot of those employees own crypto and they're going to be selling their crypto to pay their rent, to pay their bills.
The air is coming out of this bubble.
I mean, Bitcoin on its highs earlier in the year got to almost 70,000.
We're up to 69,000.
Now we're below 17,000, but we still have a long way to fall.
The market cap of all the crypto tokens was close to 3 trillion at its high.
Now it's just above 800 billion, although over 100 billion of that, I think, is stablecoins, which are just now tokens that supposedly are backed by the dollar, like Tether.
But who knows if Tether is actually back?
That could be another crisis in the making.
But the reason a lot of these crypto exchanges went bankrupt is because they took on debt.
They used a lot of leverage.
That's how they were able to offer yield to their customers who were depositing their tokens and they were getting paid.
They didn't realize how much risk these companies were taking in order to generate that so-called yield.
But now that these crypto prices are imploding, the whole bubble is collapsing.
And I think there's still a lot of people that are hopeful that Bitcoin, for example, is going to come back and it's going to make new highs and go to the moon.
But those days are over.
Bitcoin is crashing back down to earth.
It's not crashing yet.
It's kind of slowly grinding its way lower, but it will pick up the pace of the decline, I think, in 2023, especially when Bitcoin gets below 10,000.
Press Hounding and People Quitting 00:12:04
I think there's a lot more leverage that needs to come out.
I think a lot of people are going to get margin calls or people are going to have to repay some debt.
And Bitcoin is likely to be the collateral that needs to be sold.
But I just don't see the buyers.
You know, we had peak buying in 2021.
FTX wasn't the only crypto company to buy a Super Bowl ad.
I think there were three others.
But crypto companies were putting their names on sporting stadiums.
They were paying off pop stars and athletes to pump their tokens.
They even suckered in a whole country, El Salvador, into making it legal tender.
You had the NFT craze.
A lot of stuff happened at the peak of the bubble, but all that has to be unwound as the air comes out.
Wow.
Well, you've been predicting this for a while.
As you predicted, Elon Musk would not buy Twitter because it would hurt his financial fortune in a massive way and it wouldn't make economic sense.
I thought of you when he tweeted, how do you make a small fortune in social media?
Start out with a large one.
That's an old joke.
And you know, I tweeted out, you know, Elon Musk replied to it with like a smiley face.
Like I said, look, as a customer of Twitter, I'm glad you bought it.
I like Twitter better now that Elon Musk owns it.
But I pointed out it was not a smart business decision.
I think you always would agree with that.
And he admitted, but the one thing he did right is he sold a bunch of Tesla stock to raise the money.
And he got way more for his Tesla stock.
You also predicted that's what he would have to do if he bought Twitter.
So you called that as well.
Such a pleasure.
Thank you, sir.
My pleasure, as always.
All right.
Coming up, Adam Carolla is back with us.
We'll be right back with him.
The Royal Circus has officially come to town as the much talked about Harry and Megan documentary finally drops.
It comes just days after the couple attended a glitzy gala in New York City to get an anti-racism award from some members of the Kennedy family.
Joining me now to discuss it all, Adam Corolla, author of the book, Everything Reminds Me of Something.
Advice, Answers, But No Apologies.
Available right now at adamcorolla.com.
He is, of course, host of the very successful The Adam Carolla Show.
Adam, great to have you back on.
How are you?
Good to have you.
I was going to say good to have you, Megan, but thanks for having me.
All right, let's kick it off with these two narcissists back in the news again.
This is the day the first three episodes of their much anticipated Netflix series about themselves will finally air.
And then the remaining three air a week from now.
And this, we expect, to be a big punch in the nose to the royal family or their best effort yet to take them down.
That's what royal watchers anticipate.
That's what we've gleaned from the trailer.
Are you going to watch it?
What do you think?
Well, if I watch it, I'm just going to study it like game film for narcissists because I agree with you.
I think these two are insane narcissists.
And, you know, it's weird they're getting an award for racism.
But I think all you have to do is sort of complain about racism and then you get an award these days, which I feel like that's all these people do.
I feel like that's all the Obamas do.
Now we have all these people in positions of power and they could do so much for this country and this world.
And they just go around and talk about racism and get awards.
And it's sad.
It's so made up.
I mean, they haven't done anything to combat racism.
It's just a lie.
They haven't really done anything at all other than promote themselves.
But Carrie Kennedy, the sister of RFK Jr., the daughter of RFK, wanted some celeb power.
That's all this is.
That's how these things work.
They wanted some stars that would make people pay reportedly up to a million dollars a ticket.
And so they made some shit up to get them there.
And when she announced them and how amazing they are, she took a left turn to go into how you, Megan, is this mental health warrior because when she spoke to Oprah, she said that there was a time when she wanted to take her own life when she was living in the castle.
Listen to Carrie Kennedy here.
Soph five.
In the wake of COVID, there's been a massive spike.
25% of people around the globe have said that they have anxiety and massive depression.
And for Megan to get out there on national television and normalize a discussion of mental health at this point is incredibly important and very, very brave.
And the itches around racial justice, incredibly important right now.
Bull.
That's not really how she feels.
She just wanted star power.
Well, look, of course a lot of people are suffering through mental issues because of COVID because they scared the crap out of everyone.
This was killing old people and it was killing sick people.
It wasn't killing young, thin, healthy people.
And if we push that message out there at all, especially during the early stages of COVID, then we wouldn't have so many young, healthy women suffering from mental issues brought on by COVID.
So if you want to blame somebody, don't blame the disease.
Blame the government who essentially lied and pushed a narrative that was untrue.
Oh, we're going to get to that for sure.
We are definitely getting to the mental, the actual mental health crisis happening right now, in part as a result of Dr. Anthony Fauci and his rule.
But this thing about Megan Markle, I mean, let's not forget, she told Oprah that she was so distraught while living in the castle and being served by all the queen's servants that she went to the Palace HR, Adam, to try to get emergency help for her alleged suicidality.
Because that's where you go.
Where is the Palace HR flak, who I will confess my darkest secrets to and try to get help in here?
Might you go to, say, your husband, a trusted resource you have back at home, try to get a tele, whatever, telemed, a point with somebody back in California, Toronto.
No, she went to HR.
She was allegedly shut down and then she just sat there and stewed.
I mean, this is why Piers Morgan said, I don't believe any of this.
Yeah, I don't either.
It's this bizarre era that we're living in, which is everyone is looking for some sort of points and used to get points through bravery, through being strong for doing things that other people wouldn't do.
Now there's the aggrieved points and the intersectional points.
So she's half black.
So she gets some points for that.
And then she's talking about suicide.
So she gets some points for that.
And then she's a victim of racism.
So she gets some points for that.
So everyone is trying to collect points for the wrong actions.
If she was actually brave, if she actually had dignity, if she was actually willing to stand up, then I'd be happy to give her points.
But she's just going for victim points, which is a very scary place to be in and at as a society where you are trying to collect points for being weak and aggrieved.
And meanwhile, she's a bully.
There have been several reports of bullying that she committed while she was working inside the royal family.
Several people quit.
Over the past few years, 14 people have quit working for her and Harry.
That's a lot.
You run a media company.
I run a media company.
You know how many people I've had quit in the past several years from me?
One.
She's had 14.
And I am not a princess.
These people probably want to work there so badly.
It's access to royalty.
You could wind up at a palace at some point.
It takes a lot, I'm sure, to leave a job like that.
And yet they continue running from her.
It's to the point now where according to the Daily Mail, one of those bullying victims across the pond is begging the palace to release her from her non-disclosure agreement so that she can tell the world the truth about this woman as this Netflix documentary comes out, undoubtedly bashing the palace.
But isn't everything these days just projection?
Like, isn't every time someone's pointing a finger at someone, you know, celebrities talking about the environment flying privately and Governor Gavin Newsome locking people down and going to the French laundry and her being a victim while victimizing palace employees.
Like, isn't it all just projection now?
So true.
It's such a tell.
Yes.
And by the way, on that front, Prince Harry, he lectured us at the UN two months ago or so on climate change and then took a private jet with her to New York and was in some sort of line of three SUVs with five security guards to get them in.
So spare me.
I drive an SUV and it's awesome and I'm not sorry, but I'm not out there lecturing people that they shouldn't do it.
But here's the real question.
There's always going to be narcissists.
Who are the enablers?
Like who's giving them $100 million, Netflix, to do this?
Who's giving the Obamas all this money?
Who's giving all these crazed, aggrieved narcissists?
Who's supporting them?
Who's watching them?
Who's agreeing with them?
You know, that's the part that's kind of vexing to me.
I get that these people are out there.
They're horrible people.
They have some agenda.
The agenda is let's see how much money they can fleece from the public or the producers or random house or whomever.
But what always kind of confuses me is who supports these people?
You know, Gavin Newsom is a horrible governor.
He has horrible policies and then he wins in a landslide in California.
Why?
I don't blame him.
He's a horrible narcissist, sis.
He's a sociopath.
He's going to do what he wants to do and he's trying to get elected.
I get it.
What's up with the people?
What's up with the voters?
What's up with Netflix?
It's so true.
And Netflix, meanwhile, not only are they promoting these two and giving them $100 million, but they put out this trailer that is so riddled with misrepresentations.
It's already gotten off on a very wrong foot.
They've got every picture of the press hounding this poor couple that, Adam, you may not realize despite their Netflix dealer and their Spotify deal and their publishing deal and their interviews to the New York magazine, The Cut and so on.
They really want privacy.
But in any event, they've been so hounded by these terrible press people.
They couldn't find any pictures of the press actually hounding them.
They used a picture of the press hounding Michael Cohen, of the press hounding a model who was on trial for a DUI, of the press hounding, yes indeed, a Harry, Harry Potter, five years before he even met Harry, Prince Harry even met Megan Markle.
A picture of them hounding Prince Harry, yes, years before he met Meghan Markle when he was with his other girlfriend.
Like they were unable to come up with actual evidence of hounding.
The one intrusive picture you see of Megan and Harry and their baby Archie in the trailer was a sanctioned shot that one of the three photographers who were part of the pool, that's how it works, has come forward to say they blessed.
They knew we were there.
There were only three of us.
They cooperated with us.
They have to make up at every turn their injury.
And Netflix, because it's not a journalistic operation, did zero fact checking.
They've embarrassed themselves already.
Ngozi Filani and Racism Claims 00:15:44
I agree.
And, you know, it's sort of like us making up all these racism cases in the United States.
Like we're now at the point where we have to cook this stuff in order to present a point because it doesn't actually exist or in any real discernible numbers anymore.
So that's a good thing.
And I don't know, I mean, you and I are probably wired the same way, but I would call them an old school word, which would be ingrates.
And I just hate that.
These are people that are blessed.
They should be living a blessed life and they should be spreading that message.
They should be saying, look, we're having a good time.
This is a great country.
We moved to this country because it's free, because it's relatively racist-free.
So join us in our quest to enjoy.
And no wonder every person is miserable.
I guarantee you that every person who watches this two-part special and buys into it is a miserable person that you'd never want to have lunch with.
Yes.
Everything you just said is the perfect segue into Ngossi Fulani.
All right.
We have to discuss Ngosi Filani.
Who is Nagosi Filani?
She is the woman who got invited to the palace by the queen consort, Camilla, for an international day to speak out against domestic abuse of women.
And this is where she had an encounter with an 83-year-old lady in waiting to the queen.
She worked for the queen for 60 years, refused to be paid for the position, loyal servant to the royal family.
And at 83, may have made an insensitive remark by pushing a little too hard and asking Ngozi Filani where she was from.
Now, Ngozi Filani presents to this lady in waiting at a day about international abuse of women.
So this woman doesn't know where Ngozi Filani is from.
This is about problems outside of the UK as well.
And this lady in waiting asks her, where are you from?
No, but where's your family from?
No, but she tries to say, I'm from Great Britain.
And this woman keeps pushing.
No, but like, oh, I guess I'm going to have a hard time getting you to say where your family's from.
Now it turns out, speaking of being an ingrate, because then this woman goes on a press tour, Ngosi Filani.
I was abused.
The royal family's racist.
Okay.
This woman, it turns out, went on a cultural visit to Ghana in 2002 with 27 young people on a trip that was funded by the Prince's Trust.
Prince Charles, apparently, funded that excursion.
She was then reported, then she was invited to the palace to be celebrated and to draw attention to her group, her charity at this event by Queen Camilla.
She shows up not grateful, not appreciative for the microphone and so on, but ready to get this lady in waiting who she may have taped.
We're not sure, but it certainly appears from her quote transcript that she taped her.
Not only that, now the queen and king, Camilla and Charles, have invited Ngozi Filani to return to Buckingham Palace to have a personal meeting with them so they can bend the knee to her to apologize for the 83-year-old who they immediately fired.
They fired this lady's ass.
No questions asked.
She was out with no thank you for her 60 years of loyal service.
And apparently, Ngozi Filani has not yet accepted or responded.
And here's the capper.
Ngozi Filani was dressed in full African wear.
She is named Ngozi Filani.
Not originally.
Her actual name is reportedly Marlene Headley.
So she changed her name to sound more African.
She dressed to look more African.
She did the hair to look more consistent with those dials.
And then she's offended that when she shows up for a day about international domestic abuse, an 83-year-old tries to press her, perhaps a little too hard, on where her family is from.
Adam, I can't.
It's all part of what we're talking about.
First, narcissism.
Secondly, it works.
I mean, look what she's got.
She got the old white bitch fired and she gets a meeting with the prince.
So, you know, mission accomplished.
I have a million things to say about this person.
First thing she's dressed at this event like a Nubian warrior princess.
So you are automatically going to invite people to come up and ask you about your heritage.
I'm Italian.
If I showed up to a party dressed like a goddamn gondolier, I would assume that people would come up to me and want to know what part of Italy my family was from because I was inviting it.
I was asking for it.
Or whatever, wherever you're from, I don't know what your heritage is, Megan, but if you dressed in the garb of your ancestors and showed up to a cocktail party, I'm sure several people would ask you because you're inviting it.
It's almost rude not to if you're going to show up as a sort of billboard for your continent and your country.
So that's number one.
Number two, it is not rude or racially insensitive to ask people where they're from.
Every time I get into an Uber and the guy has a thick accent, I ask him where he's from.
And then he tells me either he's from Iraq or his parents are or they're from New Guinea or they tell me and then we have a nice dialogue about his heritage or her heritage and why they came here and what they think of this country.
This notion that, oh, every time you ask somebody what their heritage is or where they're from or what their accent is, that that's some sort of racial insensitivity.
Racial insensitivity is getting in the back of the Uber and ignoring the person.
Racial insensitivity is going to the party and ignoring the woman who's dressed that way, not asking questions that she sought you to ask only so she could twist it around and become a victim.
It's so true.
And how about can I add this?
Sorry.
Yeah.
Yeah, no gosh.
Because this one pisses me off.
Hey, look, it's not her fault, whatever her name is, whatever her real name is.
Marlene has another narcissist who's been able to thrive in a system that rewards narcissists.
The people that make me angry are the people that act immediately and they're scared.
Every news story I heard about this was just, oh boy, that old lady, she did the wrong thing.
She should have never done that.
Nobody ever really gotten to the nuances of it as you and I are doing here today.
And, you know, maybe the message was sent.
Maybe the message was sent when they fired the host of The Bachelor.
Maybe this message was sent when they fired Sharon Osborne.
Maybe the message is you can't even ask questions about zero burgers that are called racist attacks now without putting your job in jeopardy.
So, once again, like Megan and Harry, it's not them.
They have personality disorders.
Our society should be doing more to police these people instead of being scared that, oh, my something came up, somebody said racism.
I'm staying out of this.
I'm just going to report the version that you guys gave me so I can keep my job.
It's sad how cowardly our nation has become.
Yeah, dig a little deeper.
It's actually not that hard.
And I'm telling you, like the fact that King Charles has invited this Ngozi, Marlene, to go to the palace to meet with him personally and Queen Camilla is outrageous.
This woman called him and Camilla domestic violence perpetrators because of what Megan Markle said in her Oprah interview.
She tweeted out that Megan was the victim of domestic abuse at the hands of her in-laws and some other very unflattering tweets about the royal couple.
And yet, so first of all, she never should have been invited to go to the palace at all because you're inviting a keg of dynamite in there.
You know, you are setting yourselves up to fail.
But now, once she's gone out there, she's embarrassed your lady, your lady in waiting, for first initially claiming she didn't want to get anybody in trouble, but she tweeted out the lady's name, even though she wanted credit for not doing that, but she did.
And then goes on all these things saying she's been an abuse victim and this was sustained, prolonged racism she was subjected to.
You invite her back, you reward it, you fire the elderly woman.
It's just, it's so wrong on every level, and it doesn't bode well for the next generation over at Buckingham Palace.
That brings me to the point.
And not only that, but it just perpetuates this racism fever dream that we've been in in this country and in many Western civilizations for the last 10 years.
It gets into the zeitgeist, guys.
People don't drill down on it like you're doing it.
It just gets one more check in the see.
I told you we were racist.
Stop being so naive.
It really hurts a generation of young black people.
If you really think about what this theme is doing, like she's sitting down with the prince, Harry and Megan are hammering checks, but somewhere there's some 14-year-old black kid who has had this lie perpetuated that racism is all encompassing and it engulfs that person and they can't get along because we live in a racist nation.
And it's really at their cost.
You're really hurting those people.
Yeah, you're traveling private.
You're hammering checks.
You're hanging out with Netflix executives.
But what about this super dangerous message that you're spreading?
And you're trying to claim the mantle of hero while spreading this very insidious, dangerous message to yet another generation of Americans or Englanders.
No, it's so true.
When Megan Markle spoke in New York on Tuesday, she was talking about the oppressed, you know, how we have to fight for the oppressed, as if she's one of them.
I mean, as if this woman who was raised by a loving family in California, who wound up marrying a prince, becoming a multimillionaire, and living in a castle first in England, then in Montecito, is somehow in any way oppressed.
She's not.
And we see right through her.
Okay, now let me switch to Splash Mountain.
I don't know if you've heard about Splash Mountain at Disney.
My family was at Disney a couple years ago.
This is like one of the best rides.
It's there's, you know, the Errol Smith ride.
That's amazing.
And then there's this one, which is spectacular.
It's like their huge log flume, but it, it's next level and it's beautiful and it's super fun, but it's racist.
So it's got to go.
They are closing Splash Mountain officially in January because the Wooksters got Disney to cave.
They've been on this push for a while now.
A couple years ago, the Woeksters tried to say that Splash Mountain was racist and Disney refused to do anything about it.
They weren't persuaded.
Why is it racist, you may ask?
I went on the ride.
So did millions of others.
They didn't say, oh, this is racism.
Well, you got to dig deep to find it.
Apparently, they are the source material for the ride is the 1946 film Song of the South, which supposedly portrays plantation life in a way that is insensitive.
So a few years ago, they had this argument and the Wooksters lost.
And the people who defended Splash Mountain said at the time, Splash Mountain has never included depictions of slaves or any racist elements.
And it is based solely on historical African folktales that families of all ethnicities have been enjoying for nearly a century.
And they said at the time, it's absurd to pander to a small group of Disney haters that do not understand the story.
Now, Disney has decided it a different way.
They're closing it and then they're going to reopen it.
This is the great capper.
Only the new theme will be, well, I don't know if it's going to be a log flume, but it's a new ride entitled Tiana's Bay You Adventure, which will carry on the legacy of the princess and the frog, which features a black heroine named Tiana.
So they've completely vocified Splash Mountain.
And how does this change our world for the better?
It doesn't at all.
And as a matter of fact, I have a theory about all this nonsense that we do and engage in.
I think not only does it not move the needle or help the cause or do anything to move things along, sort of like when the NFL stencils in end racism in the end zone as if it's going to do anything or stop hate on the helmets of some of the players.
I think it actually hurts the cause because A, it puts the message out there that we are a racist nation as previously discussed, but also it sort of satiates.
Like maybe there are some problems and maybe we should get to those problems and maybe we should honestly look at those problems.
Like what is hurting the black community?
It's not Disneyland.
It's the family.
They have a very bad percentage of fatherless homes.
And you can look straight down the line.
The couples that stay together by race do the best and not by race.
So white people do okay in the divorce department, but certain other groups like Asian groups do better.
And there's a straight line between intact families and annual income and how they're doing in society.
So for instance, the biggest problem facing the black community is the lack of dance in the community.
So you're going to focus on Megan Markle.
You're going to focus on Princess Whoever in Buckingham Palace and you're going to focus on Splash Mountain and you're never going to get to the real problem.
So, and it also satiates.
That's kind of the problem.
Like it sort of feels like, all right, well, we did something here.
We can, we can rest.
It's all a distraction.
No one wants to get to the real problem.
If you mention the real problem, they ironically call you racist.
So if you want to get in their good graces, you know, you just brought up three race-based situations.
You got the Splash Mountain or Pontoon Mountain or Toboggan Mountain or whatever's over there in Disneyland.
You have Megan Markle and you have Princess What's Her Face over there in the palace?
All three are zeros.
All three either don't exist as it pertains to racism or don't move the needle at all.
Adult Trusts and College Girls 00:03:21
But what would help are things like vouchers and school choice.
That would be a big deal.
I live in California.
We're all about talking about racism, but we don't like school choice, which would help that group quite a bit more than getting rid of a Disney ride.
So it's not just a waste of time, it's a waste of energy, it satiates, and it actually hurts.
You know, I want to follow up on that one second because there's something happening in California, your state, that they think they're fixing racism.
I would argue the opposite.
But before we go there, here's an example of the perniciousness of this woke ideology being approved and just rubber stamped into existence, whether it's Splash Mountain's gone, and now we have to be honoring a black princess or this American girl.
I mean, I know you have a daughter.
My daughter loved American Girl.
She loved it.
She's getting a little old for it now, but we spent a lot of hours there in New York.
And it's supposed to be a super fun, magical place for girls.
You can get your little American Girl Darl's hair done at the hair salon inside.
You can get a matching outfit between you and your doll.
You can get a little book about your doll.
Well, now, now, Adam, what you can get is a book called Body Image, a Smart Girl's Guide, which gives advice to girls as young as three on how to change their gender by asking doctors for puberty blockers.
A passage in the book advises, quoting here from the Daily Mail: if you haven't gone through puberty yet, the doctor might offer medicine to delay your body's changes.
Then it provides a list of resources for organizations the children can turn to, quote, if you don't have an adult you can trust.
And by the way, it's billed as a guide that is, and it is marketed to girls aged between three and 12.
That is outrageous.
Can you believe that?
I love the idea that you don't have an adult you can trust when you're five.
That adult's called your mom and your dad.
Hello, you can't trust them.
I mean, I think, and I'm not really a conspiracy theorist, but I think we could safely say from a trend standpoint, they used to have to kind of wait until the kids got to college to try to sort of poison them and indoctrinate them with all these nutjob theories,
whether it was race-based or gender-based or had to do with the environment or whatever.
This group would have to wait until you sent your kids off to college to go then start poisoning them on all these sort of progressive subjects.
At some point, they figured out why are we waiting until the kids 18?
You know, you don't get all of them at 18.
At 18, your brain is dried a little bit.
And it's kind of hard to convert you into one of their soldiers for whatever cause they're going to need you to support, which is going to be a lot of crazy causes in the future.
Reparations and Leaving California 00:06:45
Instead of converting them at college, why don't we just get them when they're in the second grade?
Why don't we start working this stuff to Disneyland?
Why don't we start working this stuff to the American Girls Store?
Why don't we start doing drag queen story hour?
Like, why not get them when they're 10 versus waiting until they're 18?
And as you sit back and look at what's going on, I think you'd say that's kind of where we're at.
It's disturbing, like to start that young.
We're trying to drive a wedge between the little ones and their parents.
And then the teachers take over the school systems.
All right, a quick word on California.
Your state, they've got the solution to historic systemic racism, in particular, the hangover from slavery.
And that is, this California panel appointed by what you call your sociopathic governor, Newsom, has estimated that your state owes $569 billion in reparations to Black residents of California.
That this task force has been studying the long-term effects of slavery and systemic racism on Black residents in the state.
That's their estimate of how much it will take to make descendants of enslaved people whole.
The nine-member panel concluded that Black Californians whose ancestors were in the U.S., this is according to the New York Post, in the 19th century are due $223,200 each due to housing discrimination practices utilized from 1933 to 1977.
Now, it still has to be approved by the California legislature.
The options in paying out these reparations could include something like direct cash payments or perhaps tuition grants, perhaps housing grants.
Unclear.
But what do you make of that?
At a time when California is strapped for cash, $569 billion in reparations.
You could be cutting that check soon.
Well, I mean, as a Californian and a lifelong Californian who's getting ready to move to Texas, Nevada, or Florida.
And by the way, I'll tell you a really sad thing.
When I talk to a lot of people from California, they go, I'm getting ready to move.
And I go, where are you moving?
And they go, anywhere.
They used to say, they used to say Maui.
You know what I mean?
Like they used to give you a location.
Now they just go, no, the point isn't to go to one of the Carolinas or go to Maui.
The point is to leave California.
That's that's the goal, which is a very sad state because I've been in this state my entire life.
It was very rare to find anyone who would leave the state.
Everyone came to California.
People didn't leave California.
There were two scenarios.
It was my job is taking me to, you know, New Jersey or something.
Like you would have to move because your company moved, or you were just a little older and a little richer and you were going to Maui.
Those were the two choices.
Now it's just we're leaving to go anywhere.
And, you know, California just does nothing but waste money on things that don't benefit Californians.
We had a bullet train that we spent, I don't know, $100 million on that's not a bullet train that goes from some part of California that no one lives in to Berced or Sacramento or Fresno.
We just waste money on things that the governor thinks it sounds good.
Like we want a bullet train and we want reparations, but you have a horrible homeless problem in California.
You have no infrastructure because it's overregulated and people can't build new housing.
We have a housing crisis.
We have failing schools, but that's not sexy for Newsom to talk about.
And then also, again, when it comes to maybe the theme of your show today, who are you helping?
And what are you saying about them?
Do you know what I mean?
Like you're saying, you know, we do this thing where we, in California, we go, we need universal income so people can live in dignity.
Is getting free money from the government dignity?
It never was traditionally.
Why is getting handouts enabling you to live in dignity?
What's the difference between a panhandler and guys out front of a liquor store giving you change and the government giving you money?
I have no faith.
By the way, we tried to hand out checks in California for COVID and three quarters of the money went to guys who are incarcerated.
We're never going to be able to pull this off.
I can't imagine they're going to pass this, but I don't, I mean, it's California, so I guess anything is possible.
But the resentment that will follow between races within within races, I mean, imagine being a black person who's, well, you know, you got here, your ancestors got here just past the deadline or just in front of the deadline, or you couldn't exactly prove it.
Or what about my people, the Irish?
We were treated pretty badly too.
We're not going to get anything.
It's just going to cause that kind of resentment.
This is, and, and who's going to pay for it?
People today who had absolutely nothing to do with slavery or any of this treatment are going to be asked to pay people who actually didn't suffer at all, realistically, as a result of that treatment, a bunch of money.
And it also causes this weird chasm that basically says all black people were descendants of slaves and all black people were damaged by slavery.
And then de facto, all white people somehow flourished because of this or were a part of it in some way, shape, or form.
My family is from Italy and they moved to, you know, South Philly, you know, in 1927.
And they're renters, man.
They didn't own anything.
I have no attachment to it.
I have nothing.
I have no connection to it, but sort of de facto.
I'm the party of slavery.
Yeah, you're paying whether you like it or not.
And what's going to happen if you try to move out of California as your bill comes due?
I don't know.
Good luck.
That's between you and your governor.
All right.
Stand by.
Stand by.
Pandemic Policies and Devastating Effects 00:04:42
We're going to squeeze in a quick break.
And there's much more to discuss, including Adam's great interview with Kirsty Alley not long before she passed this week.
Adam, stays with us, and we will be right back.
So, Adam, not long ago, you mentioned the mental health crisis in America and in particular with our young ones.
The numbers are truly horrifying.
The Washington Post had a report out on December 5th talking about the crisis of student mental health being much vaster than we realize.
Just a couple of numbers.
The CDC found nearly 45% of high school students were so persistently sad or hopeless in 2021, they were unable to engage in regular activities.
Nearly half, nearly half of high school students, almost one in five seriously considered suicide.
9% of the teenagers surveyed by the CDC tried to take their lives during the previous 12 months.
The suicide rate for people aged 10 to 19 increased in 2020 compared to before the pandemic.
And then in 2021, increased again, especially for people ages 15 to 24.
Hospital emergency room visits spiked for suspected suicide attempts among girls aged 12 to 11, according to the C, beginning right after the pandemic started.
These are devastating effects of the pandemic, according to Surgeon General Vivek Murphy.
Murphy, okay, Murphy, devastating effects of the pandemic.
But you and I both know these are not devastating effects of the pandemic.
They are devastating effects of the policies put in place as a result of the pandemic, which we must now admit not only made no sense, but were severely harmful, in particular to children, including teens.
Policies like school closures, which have now been ruled incredibly insensitive, ineffective, and very damaging to mental health by any authority that's taken an honest look at it.
Outside the United States, they've done tons of these studies.
Cue Dr. Anthony Fauci, who's retiring this month and was asked if he has any regrets or he'd like any do-overs.
This school closures happened because of him, because of Rochelle Walensky, his whole cadre of people advising him, like Randy Weingarten.
Here's what he said.
Is there a moment of your career that you wish you could do over?
You know, Yasmin, no.
And I know there are going to people who are going to respond to that who say, well, what does he think?
He's perfect.
Absolutely.
I'm the first to admit I'm far from perfect.
But when you say do over, you know, I really can't see something that I would do completely over.
What do you think?
I mean, I look at that, makes my blood boil.
Well, again, maybe it's a theme that's occurring on your show today.
I have many things to say.
In the keeping with the theme, you know, what Fauci did, Rochelle Walinski did, Biden, the Biden administration, the powers that be Gavin Newsom, Pritzter.
You know, you can just go all the way down with all the horrible governors and all the horrible mayors, you know, here in Los Angeles.
We have Barbara Ferrer.
She's a kooky old ding bat who's not a real doctor who's setting policy for.
So I guess what I would like to say is I don't fully blame those people for doing what they did because it's in their best interest.
And I have no more faith in Fauci or Werlinski or the CDC or the WHO or any of these sanctioning bodies or any of these people anymore.
My real question is, is what about the people?
Why were they all in?
You know, Fauci had his horrible policies fine.
But when I was hiking down the horse trail behind my house, why was some neighbor telling me to pull up my mask or in my case, put on a mask because I wouldn't wear one?
What happened to the people?
How come they weren't able to suss these carpetbaggers out?
How come they weren't able to connect the dots between the Great Barrington Declaration and people who were being pulled off of Twitter and doctors that were being attacked or CNN calling Iver Mecton horse pace, Sanjay Gupta?
Tinhorn Flats and School Closures 00:06:53
What happened to the people, Megan?
That's my question.
These shysters are going to do what they're going to do.
They're sociopaths.
They got book deals.
They like control or they're lunatics, scared or feeble-minded.
Whatever it is.
Why did the people comply?
That's my bigger question.
And when it comes to something like depression and young girls and young men and school closures, of course, they scared the crap out of these people.
They closed the schools.
The reason they closed the schools is so they could close society.
You can't tell a guy who owns a gym or a church or a bar.
You can't close down society and leave schools open.
They did the schools so they could justify closing down the rest of society.
They had the data early.
They keep saying we didn't have the data.
They had the data.
They knew it didn't affect kids.
They shut down schools to scare the crap out of the kids, but more importantly, society, because you can't have a pandemic if the schools are open and you can't justify closing down small businesses if the schools are open.
But between systemic racism, climate change that's going to end the world in nine years and COVID, if you were 13, you don't think you're going to see your 30th birthday anyway.
Society, you know, the oceans are going to are going to rise and carry you away.
I mean, think about the message that these asinine people are sending to the young people.
They're saying, you live in a systemically racist society.
You live in a patriarchy.
You live in a place where men hate women, where whites hate blacks.
You live in a place where we're going to be, you know, we're going to ruin the ozone and society, the environment's going to be destroyed in a few short years.
And there's all this hatred and divisiveness.
But you need to be lifted up and empowered and feel good about yourself.
Well, which is it?
Why are you scaring the crap out of the kids and then expecting that they should be strong and their voices should be heard?
You're confusing them about their sexuality.
You know, they're, you know, birthing people, men are women, women or men.
You're scrambling their brains and then you're asking them to carry on.
Dividing them from their parents, the people who presumably love them more than anyone in the world, taking faith out of the public square entirely, replacing it with their faith, which is wokeism, all of which is very damaging.
My own feeling is they are scared.
That's why they went along.
This culture of fear has taken hold amongst this group and too many on the left writ large.
And that this whole safe spaces thing, you start in the movie, the greatest movie, Safe Spaces if you haven't seen it, has really damaging effects.
It causes more fear.
It causes less risk-taking.
It causes people to perceive risk in what is just normal everyday conversation and living.
And so that's how they respond.
When an actual risk comes along, like a virus, which was potentially deadly for a lot of people, they don't have the skills to manage that risk.
You know, I'll give you an example.
I told my audience last year, my little guy, he was in second grade.
He had a Norma Ray moment one day where he went to school and he refused to put on his mask.
They were wearing masks.
It was the spring of last year.
I mean, it was well beyond where they shouldn't have been wearing, should have been wearing them.
And he was like, I won't put it on.
And the teacher's like, put it on.
And he said, no.
And she said, we have to do it.
And he said, the CDC did a study of 90,000 people in Georgia and they found that masks do nothing.
And as he put it, and then she sent me to the principal's office.
And so the head of school winds up calling me.
That's like the boss's boss of the principal.
And saying, you know, we could use some help with compliance.
And I said, you know, I got to be honest, I'm proud of him.
And I said, you have to admit, this is kind of a cute story.
And to his credit, he said it is.
And I said, let's be honest, do you really want me and the other parents here?
I know you need compliance to run a school to a large extent, but do you really want us raising a bunch of automatons who just go along without questioning when something doesn't make sense and they know it or they've been given real data that is meaningful?
No.
So it's in part up to the parents to raise the next generation to take risks.
Smart risks, yes, but not to run to the safe spaces.
It's all connected.
I agree.
And, you know, when we're in the thick of things here in California, they shut down a restaurant called Tinhorn Flats, which was a family-owned small business.
I went to high school with the family, and now the owner was a high school classmate of mine.
And at some point, we said no more outdoor dining.
We moved everyone from indoors to out in the parking lot or out on the patio.
We did that at great expense to the small business owner.
And then at some point in California, with our infinite wisdom, even though there was no study suggesting COVID spread outdoors, they shut down outdoor dining.
Tinhorn Flats said, We're staying open.
We're not doing this.
We've done enough and we're defying you.
I then gathered up my son and drove out to Tinhorn Flats that evening and had dinner on their patio.
It's on TMZ, if you guys want to verify it.
And all I'm saying is, is, and look, you're not a hero and I'm not a hero.
We didn't storm the beach at Normandy.
We weren't part of any world war.
I never dove on a grenade.
I went and took my son to Burbank, California, and had a cheeseburger and pickle fries.
That doesn't make me a hero.
It's not really a calorie burner.
But the reality is, if everyone had just done the little that you, I, your son, my son, Tinhorn Flats had done, this wouldn't have happened.
We could have defied them.
They shut the beaches down in California.
They took down the nets to the beach volleyball courts.
They bulldozed sand through the state park.
Everyone should have gone to the beach that day.
The day they said we're closing beaches is the day everyone should have taken the day off of work and grabbed their swim trunks and headed to the beach.
That's what I'm saying.
Compass Humor and Worrying People 00:04:25
What happened to the people?
I get what Rochelle Walinski is doing and I get what Weintraub is doing and I get what all those idiots are doing.
They're thinking about their union.
They're thinking about power.
They're thinking about prestige.
They're thinking about their place.
What are we doing?
That's a bigger question to me.
And an important one.
All right.
Well, this is the perfect note to wrap it up on, given the theme of our discussion: running to victimhood, embracing safe spaces, and the amount of damage that does in one's life and to our country.
You, I think, about within two years of her unfortunate death this week, interviewed Kirstie Alley, who I absolutely loved.
I grew up watching her on Cheers.
We went through some of her resume the other day.
And it was a great, great interview.
People should definitely Google it because the whole thing is entertaining.
Great funny stories from Cheers and her life and some of the stuff they did on the set that she never could have gotten away with today.
But the greatest was her choice to not be a victim, despite having had considerable hardship and heartache in her life.
Here's a clip, and I'll give you the last word.
Sat nine.
You know, my dad and mom were hit by a drunk driver, and my mom was killed, and my dad was almost killed.
I've never once heard my dad talk about the injustice of all the other, of all the drunk drivers in all the history of mankind.
You know, he was able to differentiate it and keep it at that.
That was the consequence of that decision to drive drunk by that woman cost him his wife.
You don't have to hate people if they hate you.
You don't have to be the victim of something if you don't want to be.
I don't want to be a victim of something.
I want to be, I want to be triumphant.
Even if something bad happens to me, I want to turn it into something triumphant because it makes my life and everybody around me happier.
Adam, we need more just like her.
Yeah, what can I say?
You know, she was had this great combination.
She was funny, but she was also really strong.
And she, you know, I had her on my podcast a couple of years ago.
I was going to interview her for an hour and then go back to the regular format for the second hour.
But I got about 45 minutes in.
I just told my producer, we're just going to keep going.
I found her that fascinating.
You know, we need more people like her.
And, you know, back to the theme, if we had more people like her during COVID, then maybe the kids wouldn't be suffering as much right now.
She did something that is really rare in Hollywood, which is she spoke her mind, even if it would be detrimental to her career.
So she had an inner compass.
She followed that compass.
She said, this is right and this is wrong.
And I'm not going along with stuff I disagree with, even if it means I may not be gainfully employable within the Hollywood community because they punish you the most if you get off the reservation, as many people like James Woods have figured out.
So, but she was, but, but she was also really funny and she was free.
Like she said what she wanted to say.
She had a sense of humor about herself.
She was very self-deprecating and she was just unencumbered.
And she should be an example to all the people that are constantly worrying about what people think of them.
Free yourself up.
Give your opinion.
Stop worrying about what other people are thinking or saying.
It's no accident that she and you and so many others who fight back against this nonsense have what you just mentioned, a healthy sense of humor.
It helps to fight these wars, to get through life, to not take yourself too seriously, and just to manage one's overall stress and well-being.
Take an example, folks.
Adam Carolla.
We don't do this often enough.
It's so great to talk to you.
Thank you.
Always great to see you.
Thanks for listening to The Megan Kelly Show.
No BS, no agenda, and no
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