As part of the defamation lawsuit against Alex Jones, his news channel, InfoWars, is going up for auction. Many of the potential buyers come from the other side of the political aisle, with some interested in acquiring the company to obtain its internal communications and documents. Meanwhile, a group backed by billionaire George Soros is looking to take over licenses from radio company Audacy Inc. The transfer was cleared by the Federal Communications Commission, but the agency is now being investigated by the House Oversight Committee over why it fast-tracked the approval process. We’ll discuss these stories and others, in this episode of Crossroads. Views expressed in this video are opinions of the host and guests and do not necessarily reflect the views of The Epoch Times.  🔵 Watch the full episode HERE 👇   https://ept.ms/3BOa2jj Stay Informed. Stay Free. https://www.joshphilipp.com/

James Burling is vice president of legal affairs at the Pacific Legal Foundation and author of “ Nowhere to Live: The Hidden Story of America’s Housing Crisis .” “It used to be, if you could build on your property, you could farm on your property. You could cut trees on your property, as long as you didn’t hurt your neighbors. And now the federal government, the state government, local governments, are your partners in anything you do to your property. You can’t do anything. You can’t say ‘boo’ without getting permits from somebody. And with that kind of impediment, a lot of people who would otherwise build homes said, ‘I’m going to do something else with my money,” says Burling. What are the root causes of the apparent shortage of housing in America today? And why does Burling believe many housing-related proposals, from subsidies, to certain zoning rules, to rent controls, are actually counterproductive? Watch the video: “The idea of having national rent control, as has been proposed by some people, is going to make a problem that is confined to the cities with rent control into a national problem. And it’s been a disaster wherever it’s been tried,” says Burling. “We start taking away property rights, and then it becomes easier for government to control us. If the government owns the printing presses, are you going to have a free press? If the government owns the churches, do you have freedom of religion? If the government owns interests in housing everywhere, and you have to get government permission to have a home or to build a home, are you going to be as willing to criticize the government that has the power over you of where you’re going to live?” Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times. RUSH TRANSCRIPT Jan Jekielek: James Burling, such a pleasure to have you on American Thought Leaders. James Burling: It’s great to be here. Mr. Jekielek: The first presidential debate just happened, and Vice President Harris mentioned a $25,000 subsidy for housing for new home buyers. This tells us that there is some kind of issue in society. As you’ve been saying, there is a crisis. Please tell us what is happening. Mr. Burling: It’s a huge issue. People can no longer afford the way they used to to rent or to buy a new home. It used to be the rule of thumb that you spend a third of your income on housing. Many, many people today are spending over half of their income on housing, which leaves little left for medical costs, for transportation, food, and the other essentials of life. We’ve gotten ourselves into this problem gradually, slowly, but clearly we’re in a problem that’s a century in the making, a bad government policy after bad government policy, just making things worse and worse. Now, we’ve hit the boiling point. Mr. Jekielek: I want to dig into the whole picture that you develop in your book. Before we go there, let’s talk about some of these policies that are being put on the table recently like for example this subsidy to get for new home buyers. Mr. Burling: A subsidy is generally a terrible idea in the short term and especially in the long term. It’s a terrible idea in the short term because all it does is shovel more money into a sector of the economy without necessarily increasing supply. When you shovel more money into a sector of the economy that doesn’t increase supply, you have increasing costs. Costs are inevitably going to be going up if people are given $25,000 through their first down payment. If that happens, people will start raising prices to take that into consideration, that, hey, there’s an extra $25,000 we can raise the cost of homes by a commensurate amount. In addition, a longer-term problem is once you start a subsidy like this, it’s virtually impossible to get rid of these subsidies later on, even if you find out that you can’t afford it. I mean, this $25,000 per person for a new home is estimated to cost in the next 10 years at least $100 billion. That’s $10 billion a year. That’s a lot of money. Where’s the money going to come from? It’s going to come from you and I, the taxpayers. As a result, all other costs are going to go up as well. There’s no such thing as free money. I’m very concerned that proposals like this are also going to bankrupt part of the economy and cause prices to go up. Mr. Jekielek: These are typically described as a kind of stopgap measure at a time when people are having difficulty supporting them. From the perspective of the buyer, hey, if I have more money to buy a home, maybe I can actually do that. Mr. Burling: I have all kinds of sympathy for the homebuyer trying to buy their first home. It is very, very difficult. But stopgap measures are never stopgap, as I alluded to a moment ago. They last forever. Second of all, it’s not solving the problem of supply. It’s just having more money chasing the same number of homes that there was before. Supply and demand is an inexorable law, and you can’t overturn it. People have tried. North Korea tried to overturn it. Venezuela tried to overturn it. Even the California legislature tried to overturn the law of supply and demand. It just doesn’t happen. Mr. Jekielek: There is a model of this happening with the cost of education. Would you say that is analogous? Mr. Burling: It’s a very good analogy. Because higher education, what we saw, is the government, federal government, shoveling all kinds of money into higher education. As a result, universities and colleges started on spending sprees, where there used to be dormitories, there are now these castles, these luxury residences that people can’t afford before they go to college and can’t afford afterwards. But when they’re in college, they’re in the lap of luxury. After a while, the government funding starts to dry up a little bit. So you have all kinds of student loans, but the price of tuition has gone up and up and up in universities and colleges, far faster than the rate of inflation. And this is because you have so much money washing around from the federal government in the process. As soon as there’s any kind of fiscal issue, the students have to pay back the student loans, which is increasingly difficult, so then the taxpayers are supposed to come in and subsidize this process even more directly than they were before. This doesn’t solve the problem of the quality of education. It doesn’t solve the problem of availability of education. All this money just increases the cost of the education we have. And if nothing else, it makes it worse because now on our university campuses, we not only have professors and a few administrators, we have an army of bureaucrats overseeing the federalization of higher education. The same thing is going to be in housing. If you start putting all kinds of money in it, whether it’s $25,000 for new home buyers or the other proposal to have $40 billion for subsidies for home builders, all this money washing around is going to create great distortions to the market, and it’s going to be increasingly difficult for the ordinary Joe to go out and find a home that he or Josephine can afford. Mr. Jekielek: Let’s shift gears and talk about some other policies that are in discussion right now. One of them is challenges to the single-family zoning policies. So what do you think about that? Mr. Burling: We need to rethink our zoning laws. This is one of the things I talk about in great length in my book, Nowhere to Live, because zoning started out in America on a very dark side. The first zoning law in America came in 1910 in Baltimore when George McMechen, a Yale-educated attorney and his schoolteacher wife, decided to buy a home commensurate with their success in life as an attorney and a schoolteacher. George McMechen bought a home in Baltimore in a very nice neighborhood called Eutaw Place. Within several days of buying that home, local youths came to his property and essentially rioted, taking rocks and throwing them and destroying and cutting down every window in the house and the skylight. Why? They were incensed that George McMechen had bought this house because George McMechen was black and the neighborhood was all white. Baltimore soon followed up with the nation’s first zoning law that made it a crime for a black person to move into a white neighborhood or subject him to a fine of $3,000 in current dollars or a year in jail. This was the first zoning law we had in America. The Supreme Court struck down a very similar law that came out of Kentucky in 1917. That case was brought by a white real estate dealer and the head of the local NAACP, and they argued this is a violation of our property rights. This is a violation of our economic rights, and the court agreed. I think property rights are very important. Now, zoning continued after that, though, in a different form. It was not racial zoning, but economic zoning, which had pretty much the same effect. By economic zoning, I mean you have areas of the city that are laid out for residential and others for businesses, and never the twain should meet. But also the residential areas often excluded multifamily housing. It excluded apartments. It excluded triplexes, duplexes, and even boarding homes. And that made it impossible for working class people to live in the nice suburban areas outside of cities. Euclid, Ohio had an ordinance that was modeled on one out of New York City. The New York City ordinance was designed to keep Jews from having garment factories on Fifth Avenue. It sounds awful, but that’s what it was for. The one in Euclid, Ohio was designed to keep the immigrants out by banning all apartments. This went also to the Supreme Court. Here, the Supreme Court had a change of heart. The Supreme Court said, look, apartment buildings in a residential neighborhood are nuisances. They’re kind of like a pig in the parlor instead of the barnyard. Now, I don’t know if the court was thinking that the term pig also meant a Polish-American at the time, but clearly the court was concerned about immigrants and working class people moving into nice suburban neighborhoods like the members of the court lived in, and it upheld that ordinance. Ever since, zoning, single family zoning has taken over in America. It has made it virtually impossible today, especially for working class and new families starting out, to afford a home in many, many neighborhoods in this country. When we talk about single-family zoning, you have to think about the history. You have to think about what it does today. Even if we no longer think about zoning in terms of keeping out working-class people or keeping out minorities, that is the effect that it has. People are talking about the need to reform single-family housing in various ways. It could be allowing duplexes where there are single-family homes or triplexes or small apartments. There are lots of things that could be done to make housing more accessible through better zoning or elimination of bad zoning in many cases. Mr. Jekielek: You know an astonishing amount about this and of course you know it’s very much in your book. Please tell us about your background before we jump to some other policies, because this has been your life. Mr. Burling: It has been my life, but I had a life before this, if you will. I used to be, before I was a lawyer, a productive member of society, I like to say. I was an exploration geologist, and I climbed up and down hills all over the West looking for deposits of gold, silver, molybdenum, and copper. And I thoroughly enjoyed that. But in that experience, I ran into a lot of bureaucrats federal bureaucrats in particular and I was appalled by the power that they exercised which was extra legal that is they didn’t have legal authority to tell me what I should do it could and couldn’t do and I thought this is ridiculous we should sue these people. My boss in the mining company didn’t want to sue anybody. I said, I’m going to go to law school so I can fight bureaucrats. I went to law school and I have been fighting bureaucrats for the last 40 years. It’s not only in mining or environmental laws, but all kinds of things dealing with people trying to build homes and being stymied by all levels of regulation at the state and local and federal levels. Mr. Jekielek: What would be the most significant case that you participated in? Let’s talk about one that you won, and one that you didn’t win. Mr. Burling: I‘ll talk about one that I won first, because then I hope we can forget about the one that I lost, or ones that I’ve lost. I’ve lost a number of cases, of course. In 40 years, it will happen. But the most significant case that I had was representing Anthony Palazzolo, who was a owner of a small wrecking yard and tow truck operator. He had a little bit of money that he set aside and he bought about 20 acres of property in Rhode Island along the coast, not right on the beach, but on a big pond in the area. His hope was to develop that property and he bought it as part of his corporate ownership. He had a little corporation and he’s the only owner of the sole corporation. He tried to develop it year after year after year. Eventually, he said, I’m not going to try houses. I’ll do a beach club, just a parking lot, some shade structures, and some bathrooms that people can use, and then the families, when the water is too rough in the ocean, they can come to the pond and enjoy themselves. Rhode Island turned down the permit because, in its words, this was going to advance a private interest rather than a public interest. When Anthony Palazzolo started having problems with the state of Rhode Island, he wrote to the legal publishing company called West and said, send me everything you have on property rights. They did and he read it. His son later would tell the story. When I was growing up, my friends’ parents would talk to their kids, their fathers about football and baseball. My father talked to me about the Magna Carta and about the Constitution. When Anthony sued, saying that his property had been taken for public use without being paid, he thought he could win his case. And he had his own private attorney in Rhode Island, and he lost case after case. Eventually, the Rhode Island Supreme Court said, look, you’ve had this property so long, you knew that there were regulations in place, and you knew the regulations were getting harsher and harsher. You bought this property knowing that this regulatory scheme was in place. Next case, please. Anthony got together with us, and I took on the case and went to the U.S. Supreme Court with it. It was Attorney General Sheldon Whitehouse at the time that argued the case for Rhode Island. I argued that Anthony Palazzolo had the same rights to sue for the regulatory taking of his property as anybody, regardless of when he bought the property, and regardless of when the regulations went into place. The property rights don’t disappear with the passage of time. The Supreme Court, in a five to four decision, agreed with us. In an opinion, Justice Anthony Kennedy wrote that future generations have the same rights and property as the present ones, and they can sue. This is critically important for the idea that property rights really do not diminish in time simply because you have more and more regulations. These are the precedents created when I was with the Pacific Legal Foundation that really helped a lot of people. Mr. Jekielek: In your book, the erosion of property rights is the central theme. You argue that is the unifying principle behind all the problems with housing. Mr. Burling: Absolutely. Because time after time, people have had the right to use property taken away for various reasons. Another case that I have is kind of a heartbreaking case in some way was representing Ocie Mills and his son, Carey. They wanted to build a little fishing cabin for his son. And to do that on this little quarter acre or less lot, he started putting sand on the property. The EPA came out and said, stop, you’re filling wetlands. And he thought that was absurd because these lands were dry. What do you mean wetland? Well, he got another letter from the EPA saying, stop right now. He stopped, he went to the state and said, because he thought, well, EPA, they’re sharing the same office building. If I talk to people in the state that I know, they'll come out and help me. And they did. They came out and they actually drew a line in the sand and said, on this side, wetland, do not touch. This side, you can develop it. So he began to bring in some more sand and clear the land. The next thing that he knew, he was being arrested. And he thought this was so absurd, he could just go to court and tell his story. He didn’t have an attorney when he started out, and he ended up losing his case, and he spent 18 months in federal prison with his son because he filled a wetland. But the irony of this case is after he got out of federal prison for filling this wetland, he had to clear it, so he took the sand off. Then the EPA said you haven’t taken enough off. It’s not wet enough. And he went back to court. This time he got a different one. He had an attorney and a different judge. This judge went out to look at the property and said, yeah, you’ve taken enough sand off, but really this is an Alice in Wonderland scenario. I don’t think this is a wetland to begin with. And you’re basically going to prison for putting dry sand on clean dry sand on a sandy area and the judge thought that was absurd. I came into the case trying to get his conviction reversed because having the conviction he had limits on his ability to hunt with guns he had limits on his ability to vote and all the other things that felons federal felons have you know, their rights are forever limited. And we tried to get his conviction overturned on the basis of what the second judge had found. Unfortunately, the 11th Circuit Court of Appeals said it was too late. He should have brought these arguments in a better way when he was in trial court the first time. It’s too late to overturn his conviction. That was a disappointment. But the key to housing in this case is that you have such power of the federal government over individuals. Federal government can say, don’t touch your own property. Don’t put anything on it, not even clean sand, or you may go to prison. That’s a terrible impediment for people to build homes, and it’s a terrible incursion on their private property rights. It used to be, if you could build on your property, you could farm on your property, you could cut trees on your property, as long as you didn’t hurt your neighbors. Now, the federal government, the state government, local governments are your partners in anything you do to your property. You can’t do anything. You can’t say boo without getting permits from somebody. Mr. Jekielek: The big question is, what was the rationale and the development of all these regulations? Presumably, it’s because of population increasing and needing to protect vulnerable habitats? Mr. Burling: Certainly, we developed an environmental ethic in the 1970s, and it makes sense. We have to start paying attention to the environment we live in, and we have to protect it. But there has to be a balance in what we do. This is something I argue in my book, that when we simply blindly take vast areas of land off the table for development, whether it’s for wetland, endangered species habitat, viewshed corridors, agricultural preservation zones. All these things take very large amounts of land off the table without considering what is the impact on housing, what is the impact on affordability, what is the impact on future generations who may need this land for some purpose or other if it’s taken off the table under threat of going to federal or state prison. This is a balance that has been lost. This is the debate that we should be having about, well, how much environmental protection is enough and what are the costs of environmental regulation? People used to think that it was free. You just regulate something and you don’t develop property and there’s no cost to society? There should be payments to the people whose land can’t be used, and that’s one thing we’ve argued for years at Pacific Legal Foundation. But there’s also the social cost of an increase in price of housing that has been a result of this and many other regulatory programs. What I argue in my book, Nowhere to Live: The Hidden Story of America’s Housing Crisis, is that we really need to reconsider the regulatory oversight that we have on home building to make it easier for people. If they have land and the family farm isn’t working out anymore, because the commodity prices have changed, or the city’s growing up next to me, they ought to have the ability to build some homes on that property. But that right is diminished so much now that people are not doing that. It’s causing a huge distortion in the market and increase in prices. Mr. Jekielek: You have a list of the various eroders of property rights. We’ve touched on exclusionary zoning. We’ve touched on excessive environmental regulations. There’s this issue of eminent domain which is difficult to fathom. Please explain that for us. Mr. Burling: Eminent domain is the power of government to take private property and convert that into a public use. That is what the Constitution allows. It says the government shall not take property except for public use and upon the payment of just compensation. If the government has a highway, it has to build a school or a military fort, it has the ability of taking that property and converting it into a public use. It has to pay for that property, but that’s the way that the Constitution has laid out. The parameters of the relationship have substantially changed over the years. It happened most significantly right here in Washington, D.C. It’s a story I go into in Nowhere to Live. And there’s a picture of this neighborhood in my book that is a nice, working class neighborhood, ethnically mixed. It was slated for redevelopment because some of the homes were run down, especially in the back alleyways. They looked kind of a mess. But it was a minority population, and the city fathers thought it was time to redevelop the area. So they decided to take a large swath of Washington, D.C., and change it from the working-class neighborhood that it was into more of a commercial district that could perhaps bring in more taxes and have fewer minority residents in it. And an owner of a department store challenged this, saying, look, I have a perfectly fine department store. There’s nothing blighted about it. There’s nothing wrong with my department store. Why should I have my property taken and given to a private developer? Where is it public use? The Supreme Court, in 1954, in an opinion by Justice William O. Douglas, who’s a great progressive, said, look, if Washington, D.C. wants to make its city beautiful as well as sanitary, there’s nothing that the Supreme Court should do to stand in the way or any court. We should defer to the wisdom of the local government to be able to take this property. What about the public use clause? What’s the public use in taking private property from one person and giving it to another redeveloper. The court’s answer was that public use was the same thing as the public interest. If the program follows a public interest, that’s good enough. Since that time, Katy barred the door, and city after city found a way to redevelop working class neighborhoods, minority neighborhoods, and turn them into something else, because it advanced a public interest. One wonders what the public interest is in getting rid of poor and working class neighborhoods. To be cynical, it was to basically get rid of poor and middle class neighborhoods and replace it with anything else. And we’ve seen some horrific examples over time of this. Poletown in Detroit was a very vibrant working class neighborhood, ethnically mixed. It was destroyed to make way for a large General Motors plant. In New London, Connecticut, there was the Kelo case, where a large middle class neighborhood was destroyed to make way for Pfizer pharmaceuticals. The problem with conflating public interest with public use is that government players are very bad at predicting what a good industry is going to be or what a good business is going to be. These are people that take other people’s money and spend it. They’re not people that go out and create wealth in the first place. I will give you two examples. Back to Poletown, Detroit, within a couple decades, General Motors pulled up and left, and there’s nothing there but an abandoned wasteland. In New London, Connecticut, the Pfizer headquarters left after a decade-and-a-half. They said, enough of this. They never rebuilt these neighborhoods, and right now they’re nothing but weed-strewn lots. The government does a terrible job in defining what public interest is. If you make it public interest instead of public use, basically public interest is whatever foolish idea that government bureaucrats may come up with to spend other people’s money to destroy neighborhoods. Mr. Jekielek: Rent control is another policy that’s on the table. In New York City there’s a number of people who have decided to stay living in their New York home forever because they have such a great deal. Mr. Burling: New York City is emblematic of what is wrong with rent control, but other cities as well. There is a famous economist named Assar Lindbeck, who said that the best way to destroy a city other than bombing in a war is through rent control. He was right. Why is that? Because when you have rent control, a number of things happen. First of all, people don’t want to build any more housing, rental housing in a city, because they are afraid they won’t be able to get a decent return on their investment. Second, those places that are rented out under rent control, when landlords cannot get a return on their investment, they do not want to invest more money in those places, and they inevitably begin to deteriorate. People blame the landlords on the deterioration of housing stock, but it’s often because they can’t get a return on their investment. New York City is a great example because of course we had the emergency after World War I and World War II. The justification for rent control was a wartime emergency where soldiers were moving into Washington, D.C., and industry into New York City, and rents were going up and up, so they had rent control as a temporary measure. It’s been temporary now for over a century since World War I was over. I go through the history in New York City of rent control. It was a disincentive to build, and landlords began to abandon their buildings because it made no economic sense to keep a building open when you had rent control. It made more sense for them to simply abandon the building, mail the keys to the city and say, you deal with it, I’m sick of it. But what happened after that is squatters moved in, people stole the plumbing and the pipes, and the buildings deteriorated all that faster than before. And then they began to burn down because they were great for arson. In the late 60s and 70s, the South Bronx was burning all the time. I have a picture in my book, Nowhere to Live, of what the Bronx looked like during the heyday of rent control. It looked like a landscape devastated by bombing and a war. It was terrible. New York City got smart, and they altered their rent control to make it much more palatable and made it easier for landlords to get a return on investment and said that we’re not going to have rent control like we did before for newer buildings. So people started to build again. New York City started to come back for that and a number of other reasons as well. Then fast forward to 2019, New York passes a new rent control law, which is as draconian as the old one. Now, the market value of apartments is going down. Landlords are no longer renting out apartments in some cases. We are going through the same old cycle as before. The idea of having having national rent control as has been proposed by some people is going to make a problem that is confined to the cities with rent control into a national problem and it’s been a disaster wherever it’s been tried it also the cost of housing in the areas of rent control and around them go up because there’s such a disincentive for building new supply supply doesn’t meet demand and prices go up in everything except the rent-controlled units. It does nobody any favors. Mr. Jekielek: You said that the value of the property is going down, but the rents are going up? Mr. Burling: The rents in non-rent-controlled apartments go up. Mr. Jekielek: In New York, in some cases, there’s low occupancy but quite high rents, shockingly, given that there is not full occupancy, which is what you would expect when these rents should be here. Mr. Burling: In Manhattan, you do not have full occupancy of rent-controlled units and others because people are realizing they can jack up the prices because we have so much demand chasing limited supply. It reminds me of a study that Pacific Legal Foundation did a number of years ago, comparing rent-controlled jurisdictions in California cities with adjacent non-rent-controlled jurisdictions. We thought that the economic results would be exactly what they turned out to be. Rent control is justified as helping working class people, poor people, and minorities. That makes sense. They’re the ones that at least can afford the higher rents. But in every case we found, people living in the rent-controlled cities compared to the adjacent non-rent-controlled cities. The people in the rent-controlled cities were whiter, they were richer, they had better jobs, they were in better health, and they were better educated. Rent control was helping those people that had the stability in their lives to stay in one place, like your friends in New York City, and take advantage of rent control for decades. Poorer people and working class people often don’t have that stability in their life and they cannot take advantage of rent control in the long term. Moreover, rents in the non-rent controlled cities can often go up because that’s where the supply is and that’s where people are competing in an area that suddenly becomes static. Nobody’s building new stuff in rent controlled cities. They’re building it elsewhere and people have to move elsewhere, so it’s a huge distortion on the market. The bottom line is, it doesn’t help the people that it’s supposed to help the most. Mr. Jekielek: Basically, less regulation is better. Is that correct? Mr. Burling: That’s the bottom line. We don’t need to solve our housing crisis with more government programs, more government regulation, and more overarching rules and regulations on how we use our property. Mr. Jekielek: But we need some regulations. Mr. Burling: Yes, we need some. Mr. Jekielek: I’m trying to understand where that line is. Mr. Burling: The regulation should be to protect health and safety, bottom line. In my book, Know Where to Live, I talk about the history of housing in New York City and how in the 1800s, there were terrible tenements. These tenements didn’t have running water, they didn’t have sewage connections, and they didn’t have air. By air, I don’t mean air conditioning. They didn’t have air. They didn’t have windows that opened up. The only ventilation was through a central stairwell. Disease was rampant. You would take a bucket and fill your water up with a pump down in the courtyard below, and you take your waste and you put it into a pit near the pump. No wonder people were getting cholera and all kinds of diseases in New York. There were regulations of housing that were necessary and that made sense. You had to have running water. You had to have toilets. You had to have ventilation and air. All these things to protect the public health, welfare, and safety. Yes, we do need regulations to some extent. But just because a little of something is good doesn’t mean a whole lot more is always better. We’ve gotten beyond the whole lot more portion where it has become so difficult to build any kind of housing. The housing that you can build has all sorts of increased costs built in. In California, you have to have a solar roof on your property. That’s a wonderful idea, but it costs about $10,000 a house. You have to have charging stations for your EVs. You have to meet insulation standards that are appropriate for the North Pole. But California has the most temperate climate in the world. Why do you need triple pane windows where you never need air conditioning in the first place or heating most of the year? So we’re just going overboard with regulations, and all they do is add to cost after cost after cost. Is it really a crisis? When I first moved to California, there were no people living on the streets that I ever saw. There were no people camped out in the river areas. I used to like to hike in some river areas and outside of Sacramento. I wouldn’t do that now to save my life because it is nothing but homeless camps and it’s dangerous. It’s dirty and it’s filthy, because people have nowhere to live. Mr. Jekielek: There are a few different things happening. The things that you describe have to do more with addiction or drugs and things like this. It’s not like housing isn’t a specific issue, but that’s not the reason people are camping out there in the first place. Mr. Burling: The housing crisis contributes to that, because we used to have single-room occupancy hotels where your alcoholic or drug addict could at least have a place to live to some degree. We also used to treat mental illness on a much larger scale. I talk in my book, Nowhere to Live, about an experience I had when I was an undergraduate. I was a volunteer at a state mental hospital in upstate New York. I would visit the patients and talk to them and have conversations and try to socialize them, somebody other than the guards in these institutions. In 1976, they all began telling me the same thing—Jim I’m going to a halfway house in Schenectady.Jim I’m going to a halfway house in Albany. Jim I’m going to a halfway house down in Rome, New York. I said, great, wonderful, how long are you going to be there? Six months. What happens after that? They didn’t know. Nobody knew. There was no plan. We emptied out the institutions, and there are all sorts of legal reasons why that happened that I go into my book in lay terms. We ended up with the homeless being treated by self-medication with drugs on the streets. They’re in the jails or the institution of choice now for many of them. And we have failed as a society to take care of the people that are most vulnerable, those people who have mental illnesses, mental illnesses that often morph into drug addiction. And we don’t have opportunities to treat people for their drug addiction either. The big institutional warehouses like the ones I volunteered in were hardly ideal. There has to be a better answer than that. But the answer is not sending people out to the streets. When you are on the streets and there’s no place that you could possibly afford, there’s no rooming houses available, there’s no single-room occupancy hotels, there’s no little tiny starter homes that you could be with a number of people as a group home. In many places in the states, it is illegal for too many unrelated people to live in the same home. These were ordinances designed to stop boarding houses and stop college fraternities and stop college roommates from getting together. But they have an impact on many people that it may be the only place that they could possibly afford. As housing has become more unaffordable, we’ve had more and more people on the streets, so there is a connection. Yes, there’s a lot of things going on, but the issue of home prices and being priced out is a contributing factor. Mr. Jekielek: You develop so many of these ideas in your book. How do property rights become the central theme that brings all of this together? Mr. Burling: All these cases that I talk about with the failure to allow people to build homes to meet the supply that demand requires is an incursion on property rights. It used to be, you know, 100 years ago, if you owned land, you could decide to build on that land as long as it wasn’t going to harm your neighbors. You could farm it. You do what you want to do. You couldn’t do things that were going to have a direct adverse impact on your neighbors. You couldn’t necessarily put stables next to a nice home or have a little factory, things could be dealt with in the courts through the nuisance law. But as we’ve had zoning laws and environmental regulations put on, your right to use your property has been diminished seriously. That has had all sorts of adverse consequences. One of them is the cost of housing. Another one that I think people don’t think about enough is our property rights are so directly related to all of our other rights. When we start taking away property rights, then it becomes easier for government to control us. If the government owns the printing presses, are you going to have a free press? If the government owns the churches, do you have freedom of religion? If the government owns interest in housing everywhere and you have to get government permission to have a home or to build a home, are you going to be as willing to criticize the government that has the power over you of where you’re going to live? I think that property rights are incredibly important for the economics of housing, the supply and demand issue, but all the other issues that go together with owning a home. Ownership of a home is a place that we can keep government out, keep other people out. It’s my home. Or even a rental property. It’s my apartment. And I have the ability to keep the government out of this. But when government has such control, we have a potential loss of a lot of our freedom. Mr. Jekielek: Any final thoughts as we finish up, James? Mr. Burling: The crisis we’re in, and I do think it’s a crisis, is something that is not inevitably permanent. We can get out of it. In the past, we’ve had waves of immigrants in the 19th century. We built our way out of the housing crisis then. We can do it again. But we have to focus on the regulations that are important, but at the same time recognize that too much regulation just makes it impossible for people to build the homes where people want to live. Mr. Jekielek: James, if there were a single policy recommendation to challenge this crisis, what would that be? Mr. Burling: First of all, we have to look at ourselves and ask the question in our communities where we live, are we allowing enough housing to be built so that our children will have a place to live, so the people who work in our communities have a place to live? And in most cases, the answer is going to be no. We’re not allowing enough housing and our children have to go elsewhere. People who work in our communities often have to have long commutes into where we live, and we need to reform it starting at the local level. We need to maybe allow duplexes where there’s a single family home now, or a triplex, or maybe a small apartment over here. I’m not talking about 80-story apartment buildings in suburban neighborhoods, or subsidized housing in various places, but I’m talking about at the local level, asking ourselves the question, what can we do to allow more housing in our community so our children and the people that work here can live here. I think we can do this. We can start at the local community and tell our city fathers, we want to fix the system that we have to allow more people to live here, to bring prices down. And if that sort of thing happens in different communities all across the country, we can begin to make a significant impact on the crisis that we have today. Mr. Jekielek: James Burling, it’s such a pleasure to have you on the show. Mr. Burling: It’s been my pleasure to be here.

In this episode, we sit down with Gordon Chang, author of the new book, “ Plan Red: China’s Project to Destroy America, ” to understand the Chinese regime’s strategy to destabilize America, from fentanyl warfare to election disinformation to suspicious activity at the border. “We’re seeing a change in composition of Chinese migrants. So if we go back two or three years ago, it’s basically family groups. Now you’re seeing packs of single males, groups of five to 15, military-age, traveling without family members, some of them pretending not to speak English. And as Chairman [Mark] Green noted, U.S. Border Patrol knows some of them have links to the Chinese military,” Mr. Chang says. We also discuss China’s growing nuclear arsenal, tensions in the South China Sea, and where things may be headed. “We have these extremely belligerent, provocative acts, some of which constitute acts of war against the Philippines. … We see this right now at Sabina Shoal. Last month, it was Second Thomas Shoal. Before that, it was Whitsun Reef. But all of these areas are very close to the main islands of the Philippines and very far from China. They are within the exclusive economic zone of the Philippines.” America has a mutual defense treaty with the Philippines and has issued multiple warnings—with little effect. Watch the video: “We see momentum toward war, and we Americans have got to ask ourselves, what is going to stop this momentum to war?” Chang says. Views expressed in this video are opinions of the host and the guest and do not necessarily reflect the views of The Epoch Times. RUSH TRANSCRIPT Jan Jekielek: Gordon Chang, such a pleasure to have you back on American Thought Leaders. Gordon Chang: Well, thank you so much, Jan. Mr. Jekielek: Back in 2020, the Chinese dictator Xi Jinping said that the East is rising and the West is declining. He meant the East being China and the West being the USA. How do you read this? Mr. Chang: Well, I know a lot of people say the U.S. is declining. And if you look at America, let’s say over the last three or four years, yes, we’re not as strong as we were. But decline really talks about relative standing. And since that time when Xi Jinping spoke, the Chinese economy has fallen. It is now in a grave state. Chinese people are leaving the country because they do not see a future for China. And a lot of people are just lying flat, as they say. So the country has so many problems, whether we’re talking about the ability of governments to deliver services or just demography. China sits on the edge of the biggest demographic fall in the absence of war or disease. You just run through the list. I don’t think that you can say that China is rising. Look at Russia. You know, Russia in that time now is on the ropes, as we can see in the war in Ukraine, unable to achieve its goals. So I'd say that on a relative basis, the U.S. is stronger today than it was three or four years ago when we compare it with what’s going on in China and in Russia. Mr. Jekielek: Basically you’re saying everyone’s level has gone down a bit. But I think this idea of decline, it’s a broader thing. I mean, I’ve heard even comparisons to the Roman Empire, right? This is about Americans talking about America, right? Mr. Chang: They talk about our country in that way from time to time. So during the Carter years, you know, during the 1970s. This whole issue of detente was because we felt we couldn’t keep up with the Soviet Union. So yes, this is something that afflicts us from time to time. But America is strong because of all the countries we know of, especially when you compare us to China and Russia, we have the ability to solve our problems. Matter of fact, we’re the only of the three that can solve our own problems. And although China and Russia can be considered to be strong, they are by no means resilient. Mr. Jekielek: We can solve our problems, right? Please tell us about that, because of course, the Chinese regime is a significant part of those problems. Mr. Chang: Yes. And clearly China is in difficulties. But one thing about China is that Xi Jinping has decided he is not going to boost consumption, which is really the only sustainable basis for the Chinese economy. And what he’s decided to do is to export his way out of problems. That means he’s put his fate in our hands because he needs to sell to our market, the EU, and the global south. So he has mortgaged his future to others. Others are making decisions about the future of China. That’s not true of the United States because of our problems. When we look at the domestic afflictions we have, a lot of them are just self-inflicted. Our government is doing stupid things, as President Obama said, in perhaps a different language. But, yeah, we have the ability to solve our problems. And we can deal with China, should we choose to do so. Mr. Jekielek: You have a new book that you’ve written, Plan Red: China’s Project to Destroy America. Let’s flesh out what that looks like. For some people today, that’s still a very strong statement to make. Really, China’s trying to destroy America? Isn’t it dependent on America, like you just said? Mr. Chang: Well, it is dependent on America. But the Communist Party, People’s Daily in May 2019, People’s Daily, the most authoritative publication in China, in a landmark editorial declared a people’s war against us. And we’re American, so we think we can ignore what our enemies say. But for Communist China, people’s war is a phrase that has great resonance. Going back to the beginning of the People’s Republic of China, just about a year ago, PLA [People’s Liberation Army] Daily actually defined people’s war for us. It said, people’s war is total war. And we have seen China wage a campaign of unrestricted warfare against the United States. I think that the Communist Party views the U.S. as an existential threat. And it views us as an existential threat, not because of anything we say or do, but because of who we are. You have an insecure regime in Beijing that’s worried about the inspirational impact of America’s values and form of governance on the Chinese people. So I believe the Communist Party does not think it will ever be safe as long as the United States exists. Mr. Jekielek: You know, I want to touch on this. This isn’t something you talk about in the book as much, but a lot of people are concerned with America’s sort of accelerating debt. Even the debt payments have become a significant portion of annual revenues. And at the same time, the Chinese economy is deeply intertwined with the American economy, right? And as much as there’s some level of so-called de-risking or even decoupling beginning to happen on the American side, we know that Xi Jinping is pursuing that on his own terms. Over on the other end, there is still this, you know, kind of tight connection. It almost seems like there’s no way to avoid some pretty significant pain. I don’t know what you think about that. Mr. Chang: Yes, there will be pain. We have pursued misguided China policies for five decades. So no one should think that we can get out of this without pain. And there will be. But we have to do that if we’re going to maintain our independence and our sovereignty, because China is maliciously attacking us. We’re not defending ourselves, which is one of the reasons why I’m so concerned, because a weaker society can destroy a stronger one. That’s happened throughout history, and it could happen very well now. But I wrote the book because I felt that we need to talk about China in realistic terms, because we don’t comprehend the danger from it. Mr. Jekielek: So let’s talk about this unrestricted warfare, or sometimes called asymmetrical hybrid warfare. China has been using all sorts of means under the Chinese Communist Party, all sorts of means to destabilize, less than America, you know, kind of push America into this decline. And so just why don’t you kind of lay out for me some of the pieces of this puzzle, what that looks like. Mr. Chang: Right now we’re in an election season so one of the things that China’s been doing is creating fake posters on social media, and then trying to divide the American people by making these outrageous statements about all sorts of things, like reproductive rights, for instance, which is very controversial in America. So there’s that. And then in TikTok, they’ve clearly decided to support one candidate. So they’re using that in a way to elect a president that they want. And this also goes back to 2020, where China’s interference in both the primaries and the general election was substantial. So there’s that piece to it. But of course, there’s intellectual property theft. People have estimated this to be about a half trillion dollars a year. I mean, we don’t know exactly the full dimension of it, but it’s a very substantial amount. Then there’s China’s promotion of fentanyl. That’s about 75,000 lives that we lose every year. 75,000 Americans die from doses of illicit Chinese fentanyl every year. So this is a project of the Communist Party to weaken America. And the list goes on and on. China uses every point of contact with the United States to take down our society. Mr. Jekielek: Let’s talk about fentanyl. We’ve covered this issue on the show quite a bit. But it’s the Mexican cartels that are kind of delivering the fentanyl across the border primarily. Why is it called Chinese fentanyl? Mr. Chang: First of all, the precursor chemicals for fentanyl come from China, and they are mixed by Chinese technicians who work for the cartels. And the cartels do smuggle it abroad. Before this, the Chinese were selling the fentanyl already mixed into the United States, delivering it through a number of means. The U.S. cracked down on that, so they then started to go through the cartels. But we’ve got to remember that the fentanyl producers, some of them in fact are state-owned enterprises, and some of them are just criminal gangs. Mr. Jekielek: The precursors, you mean, right? Mr. Chang: Making the precursors, and the pill presses, and all the other paraphernalia. mail you. The Communist Party runs a total or a near total surveillance state. And these large fentanyl producers and gangs couldn’t operate without the knowledge and approval of the Communist Party. But it even gets worse than that, because we know that Chinese diplomats give cover to the fentanyl producers. Every container that leaves China is inspected by Chinese officials. The fentanyl gangs launder their proceeds through the Chinese state banking system, Chinese-owned TikTok promotes illicit drug use in the U.S. The list goes on and on. Xi Jinping has made promises now to three American presidents to stop this; Trump in 2018, Obama in 2016, and most recently to President Biden last November. This is unrestricted warfare. And this is very effective because as a society, we’re not dealing effectively with what the Communist Party is doing. We just sort of say, oh, this is crime by, you know, bad elements in China. No, it’s not. Well, the Communist Party is a bad element. But it is, we do not understand the nature of the crime and we don’t understand the fundamental nature of this. What nature do we need to understand? Mr. Jekielek: What are we missing? Mr. Chang: The Communist Party is evil. Nothing else to say. It is evil. Mr. Jekielek: These are categories that some people don’t even maybe accept exist today, right? Mr. Chang: Let’s talk about evil. We are seeing China commit genocide and other crimes against humanities, against the Uyghurs, the Kazakhs, and other Turkic minorities, against the Tibetans. They’re now spreading it to the Mongolians, which is their new aspect to this. The persecution of people of faith, Falun Gong practitioners, organ harvesting, the most ghastly practice I can think of. I think that Xi Jinping, more than any other figure alive today, is responsible for more deaths. We don’t know how Covid-19 started, but we do know that once it broke out into Chinese society, Xi Jinping made decisions to deliberately spread it beyond its borders. We know that for a period of at least five weeks in December 2019 and January 2020, the Chinese regime lied to the world about the transmissibility of this disease. They knew it was highly contagious. They told the world it was not. And while they were locking down their own country, lockdowns are controversial, but by locking down China, Xi Jinping was saying to the world he thought lockdowns were an effective way of stopping the disease. So while he was locking down China, he was pressuring other countries, especially the United States, to take arrivals from China without travel restrictions or quarantines. Jan, you put those two things together, and it is indisputable that Xi Jinping made a decision to spread this beyond China’s borders. That 7 million people outside of China died from Covid-19. Those people were murdered, and that includes 1.2 million Americans. We can argue about the number, you know, but the point is any number above zero is unacceptable. Mr. Jekielek: I think you make a compelling case. I just recently watched the new Reagan film, and I was just reminded that one of the things that Reagan did, which was controversial at the time, was basically to say that the Soviet Union was the evil empire, right? And that was also, I guess, as it might be controversial today to say that the Chinese regime is the evil empire. How would you compare the level of the threat of the Soviet Union back in the time of Reagan to the Chinese Communist Party today? Mr. Chang: They both said that they were going to destroy us, but China has more means to do that. And the Chinese leaders today are more willful than the Soviet leaders in the 1980s during the Reagan time. You know, we can talk about Stalin, a murderous figure, but by the time you get to Brezhnev and Chernenko and Andropov, those guys were just caretakers. Mr. Jekielek: You know, one of the things you often hear about, and I think maybe America sometimes has a propensity for this, you hear the term isolationism. The idea is something like this. Of course, America has been involved in a number of wars over past years, you know, years, trillions of dollars in treasure, for example, in Afghanistan, many lives lost, not clear what the benefit was ultimately, given where we are today. And the question is, maybe America should step back from these types of engagements and just kind of focus on its own problems, which are plentiful. How do you react to that? And maybe it’s even American aggression at some level that is provoking these regimes on the outside. How do you react to that? Mr. Chang: With regard to China, we hardly provoke them. We worked for decades to integrate China into the international system to make it stronger. There have been a number of instances where American presidents have come to the rescue of Chinese communism and saved it from failure. So I don’t think you can say that we have provoked China. Mr. Jekielek: Could you maybe expand on that a little bit about these rescues? Mr. Chang: The first one would be 1972 when Nixon went to Beijing and met Mao. This was during the end of the Cultural Revolution, a period of great abnormal period, and a time where the Communist Party had been discredited completely throughout society. And by Nixon going there, he was signaling his support, American support for the Communist regime at a time when Mao, who was in very poor health, where the Communist Party might not have survived. Then you have George H.W. Bush right after the Tiananmen Square Massacre June 4th 1989 sent Brent Scowcroft on a secret mission to say, yes, we’re sanctioning you but don’t really don’t worry about it we’ve got your back. That was a time where communism could have failed. But what we did was we gave communist leaders the knowledge that we would support them through a very difficult time for the party. I can make the case for 1999 when President Clinton signs a WTO accession agreement with China. China then actually joined in 2001 and went on for a period of trade success. One can argue a lot about it, but the point is it certainly materially helped the Communist Party then. So we have these instances where the United States really has been indulgent. And after China joined the WTO, you know, we have a series of presidents who don’t enforce China’s trade obligations to us and allow China to engage in predatory conduct, criminal conduct. And that certainly made the Communist Party much stronger. The whole notion was that if we help the party, it will see it in its interest to support the international system. That did not work out. That, I think, is the grandest wager in American history, and it could be the last big wager that we make, because this one could be done in the United States, actually. Mr. Jekielek: Presumably, unless something changes, right? Mr. Chang: Unless something changes. We are far stronger than China. We are far stronger than China and its friends—Russia, Iran, and North Korea all combined. But that doesn’t mean we’re going to win this struggle because there are periods throughout history where weaker adversaries have destroyed stronger societies. And especially right now, China’s waging war on us and we’re not defending ourselves. So we’re at a period of mortal danger. This is a period where China’s waging an existential struggle and we as a society are not realizing the fundamental nature of that challenge. Mr. Jekielek: You know one of the things you reminded me of in reading your book was you know Chairman Green of Homeland Security. There’s this question of Chinese nationals of military age coming across the southern border and I remember Chairman Green basically made a statement that some of these were basically identified as being affiliated to the People’s Liberation Army, which I had actually forgotten that aspect. And that’s pretty significant, right? Mr. Chang: Absolutely, because we’re talking about tens of thousands of Chinese migrants coming across our southern and northern borders. And I think most of them are who they say they are. They’re just desperate people who want to live in a free society, who have given up on China. And so that’s the one side. But also, we’re seeing a change in the composition of Chinese migrants. So if we go back two or three years ago, it’s basically family groups. Now you’re seeing packs of single males in groups of 5 to 15, military age, traveling without family members, some of them pretending not to speak English. As Chairman Green noted, U.S. Border Patrol knows some of them have links to the Chinese military. Also, just to give you an example, it’s not just the southern border. In February, U.S. Border Patrol apprehended, I think it was three Chinese migrants sneaking into Maine. And what was ominous about this was that there were Chinese nationals on our side of the border who were obviously there by pre-arrangement to help them get in. And, you know, if you want to live in the U.S. because you just don’t want to live in China anymore, you surrender to the Border Patrol because you want the debit card from New York City. If you’re trying to come in undetected, it means that you’re coming here for some sort of nefarious purposes. It could be because you’re waging war in the U.S. It could be because you’re a triad member. I don’t know. But the story can’t be good. Mr. Jekielek: Some time ago, Joshua Philipp, who covers China extensively for us, did a special episode about this biolab in California. Can you just give us a picture of what we know about that at this point? Mr. Chang: Yes. An alert building inspector in Reedley, California, December 2022, stumbled upon what is clearly a secret Chinese biological weapons facility. Inside, investigators found at least 20 pathogens, and some for some really dangerous diseases, and almost 1,000 mice that had been genetically engineered to spread disease. One of those diseases is Ebola. Ebola has a natural fatality rate of 50 percent, and we know that researchers at the Wuhan Institute of Virology at this moment are trying to figure out how to weaponize Ebola. So this is of grave concern. And it doesn’t take much imagination to think that this cannot be the only such Chinese facility in the U.S. So think about it. A lot of Chinese males come across. Some of them could be operatives. They pick up the mice. They spread them around the US. That’s the first sign of China’s decision to go to war on us. Mr. Jekielek: You know, it’s interesting that when we think about the Chinese presence in America, there’s a ton of students that are in all sorts of universities. I had John Lenczowski from The Institute of World Politics on the show recently. He was talking about how many thousands of intelligence collectors there are. There’s this whole kind of incentivization structure through the social credit system that even if you’re not some kind of agent, which of course probably most people aren’t, you’re certainly incentivized to gather bits and pieces of that and send it home for benefits, social credit benefits. And of course, like you said earlier, a ton of people come across just looking for a better life because this is where people go for that as we can clearly see. How do you deal with this whole kind of scenario because you don’t want to stigmatize everybody right? How do you see that? Mr. Chang: With the students just mentioned, one thing that we know is that in the U.S. Chinese consular officials and Ministry of State Security agents actually surveil those students and get them to commit espionage, get them to engage in political activities, which is inappropriate on our soil. And this is our country. We allow that. So this is something that we got to do. Remember, under the Communist Party’s top-down system, every Chinese national has to obey the instructions and demands of the Communist Communist Party. And China’s 2017 national intelligence law actually codifies this in one area where Chinese nationals are required to commit espionage if they receive a demand. So as a matter of national survival, we have a right to give special scrutiny to the Chinese. My dad came here as a Chinese student. So I have a special place in my heart for this. But nonetheless, when we talk about the effect, this is something that we have not been able to deal with. And so we’re going to have to take extraordinary measures, measures that we now consider to be politically unacceptable, if we’re going to keep our country. Mr. Jekielek: Maybe you could flesh out a little bit, you know, the different ways in which the Chinese regime has infiltrated American society. You lay out a lot of them in the book. and it’s, I mean, it’s frankly, you know, extremely concerning when you see the broader picture. Mr. Chang: I'll give you one example. Linda Sun, who is now being accused of being a Chinese agent. She worked for Andrew Cuomo, the former New York governor, and for Kathy Hochul, the current New York governor, helping China’s diplomacy by targeting Tibetans and others and taking substantial sums from the Chinese government for doing that. And there are others in the New York Democratic Party who are, I think, also going to be subject to investigation. But let me give you an example of how pervasive this is. We know that the Ministry of State Security, in the form of Christine Fang, first contacted Eric Swalwell. The Chinese Ministry of State Security didn’t first contact Swalwell when he was sitting on the House Intelligence Committee, where he would have been of great value to China. They first contacted him when he was sitting on the city council of Dublin City, California. This is not to say that Swalwell has done anything wrong, but it is to show how pervasive and how comprehensive the Chinese penetration of our political system is, because Swalwell could not have been the only person who was groomed. There must be hundreds of Swalwells, if not more, which means that there must be hundreds, if not thousands, of Ministry of State Security agents running around our country trying to compromise American politicians. Mr. Jekielek: You just reminded me of something in your book. You talk about Charles Burton talking about the different color codings for ways to compromise foreign people from the Chinese perspective. Mr. Chang: Burton is Canada’s most incisive China watcher, because he was a Canadian diplomat in Beijing. Now, he’s at a think tank. Burton has talked a lot about Chinese penetration of Canada, which is maybe even more comprehensive than its penetration of our society. Mr. Jekielek: This is interesting, because I hadn’t heard about it before, how the Chinese are great planners and they organize everything. Mr. Chang: They’ve got this three color coded system; one color for corruption, just money, another color for sex, another color for something else. And it’s fascinating how meticulous they have been in the way that they have targeted us. But they’ve done a very good job of it because they’ve devoted enormous resources to it. They cannot accomplish their goals, they believe, unless the United States is out of the way. Mr. Jekielek: Why is that? I think in general in free societies, I guess most of us kind of believe in win-win. There’s such a thing as a win-win. But we can work together and grow together as well, right? Like why do you have to lose for me to win? It’s not a zero-sum game for many of us like this. Mr. Chang: It is for China though. First of all, they’re communists. They believe that communism must prevail around the world. There must be a dictatorship of the proletariat. There must be a perfect communist society after that everywhere. But it makes it even worse because Xi Jinping has been especially promoting the notion of Tian Xia, of all under heaven, that Chinese rulers believed that they had the mandate of heaven to rule Tian Xia. And it was even worse than that, Jan, because they believed that heaven compelled them to rule the entire world. Well, if you have to rule the entire world, you have to get rid of the United States, in addition to about 196 other countries. So there’s that. Mr. Jekielek: Or subjugate them, right? It’s not so much to get rid of, is it? Mr. Chang: With the United States, it is because we’re a democracy. Remember, the Communist Party views us as an existential threat, not because of anything we say or do, but because of who we are. You have that insecure regime in Beijing worried about the inspirational impact of our values and form of governance on the Chinese people. You know, if you go back during the Trump presidency, Trump was very popular in China, even though he was not particularly nice to the Chinese regime, because he was just so refreshing. He was so different. Forget about politics for a moment. The Chinese people looked at that and they’ve made the comparison with Xi Jinping who you know never gives press conferences, never talks to the Chinese people except in these really controlled circumstances and then only like one a year where you have you know just an American leader just so different. Mr. Jekielek: Something that we haven’t talked much about on this show yet is China’s nuclear buildup and this is something that you know kind of has been really accelerating in recent years, really kind of under the noses of the other nuclear powers. Mr. Chang: Yes it is stunning. In November 2022, the Pentagon issued a report that said China had about 400 warheads then and projected that by 2035, they would have 1,500. Some analysts say the number of 1,500 is way under what China will have when they look at the number of delivery platforms that China’s building. They say it makes much more sense that the number is going to be, like what Rick Fisher talks about—7,000 warheads by 2035. But yes, whatever it is, they’re on a very fast pace to do it and we’ve got to worry that this is not deterrence because China already has enough to deter the United States or anybody else for that matter. What they’re looking for is a war fighting capability. They have seen Vladimir Putin make threats to use nuclear weapons and get what he wants. For instance, he got President Biden to back off when Putin was threatening to invade Ukraine in early 2022. And by brandishing his most destructive weapons, he got the Biden administration not to provide the assistance to Ukraine that we should have been supplying. The Chinese look at that and say, why? Why don’t I do that? And matter of fact, the Chinese have actually been threatening the use of nukes. So for instance, March 2022, the Chinese Ministry of Defense promises, “worst consequences,” for any country coming to Taiwan’s aid. Even before Putin invaded Ukraine, you had China threatening to incinerate Japan and Australia in July and September of 2021 so this has now become they want to have enough nukes to force other countries to persuade other countries not to come to aid of Taiwan, the Philippines, and Japan. Yes, this is very dangerous. Mr. Jekielek: Why should we care about those countries? Mr. Chang: First of all, we Americans have drawn our Western defense perimeter since the 1800s, not off the coast of California or even Hawaii, but off the coast of East Asia. Japan, Taiwan, and the Philippines are part of that critical perimeter. It means that we can defend far away from our shores, which means we protect our people. But it goes deeper than that. You have, for instance, China just attacking the whole notion of democracy. So we cannot allow China to absorb or annex any democracy, especially as the ones that are important off of its eastern periphery. Taiwan is important because it makes, in addition, 92 percent of the world’s most sophisticated semiconductors. So if we want a society without semiconductors, we can let China take Taiwan. But there’s also another reason, and that is after the catastrophic withdrawal from Afghanistan in August 2021, Taiwan has become the test of American credibility and resolve. So it’s not just East Asia, it’s also Europe. Because people are, if we allow China to take Taiwan, then people are, if we allow China to take Taiwan, then people are going to say, well, what about my treaty with you? We don’t have a treaty with Taiwan, but we have an understanding. We’ve got the Taiwan Relations Act of 1976. And we have got all the promises that we have made to Taiwan. So this is the test of American power. And this means we have a lot. Defending Taiwan is defending America, for instance. Mr. Jekielek: You argue in the book that Xi Jinping actually greenlit the Russian invasion of Ukraine. How do you see that? Mr. Chang: February 4th, 2020, when Vladimir Putin was in Beijing for the Winter Olympics, China and Russia issued their 5,300-word statement, which declared their no-limits partnership. Just 20 days after that, Putin invades Ukraine. China’s support for the Russian war effort has been from the get-go. It has been not only elevated commodity purchases, but also supplying intelligence to the Russians, supplying ammunition, drones, computer chips and circuit boards, diplomatic support, propaganda support. It’s been across the board with the exception of provision of troops. So although the Russians may not think that they are a proxy of China, China probably views Putin as their proxy. So this is China’s war on the international system. And so yes, they greenlit the invasion and they supported Russia from the very beginning, as they are now. Mr. Jekielek: So I’m reminded that a very influential Chinese military strategist made the point of saying that China should keep America embroiled in different foreign wars, including one with a non-state actor. There’s this sort of approach of keeping America distracted from China, right, and what China has been up to. Mr. Chang: Well, Xi Jinping reveres Mao Zedong, and I think that Xi has taken two pages from Mao’s peasant movement playbook. The first one was in 1949, Mao prevailed over Chiang Kai-shek, driving him off the mainland into Taiwan. Because, as Mao said, he encircled the cities from the countryside. Xi Jinping looks at Ukraine, North Africa, the Middle East as the countryside, and we’re the city. Because China is supporting Russia and Ukraine, supporting Iran against Israel, and it’s fueling insurgencies in North Africa that look like wars. The other thing, though, the other page is chaos. Mao Zedong wrote to Jiang Qing, his wife, in 1966. He wrote that great chaos under heaven achieves great order under heaven. By great order under heaven, Mao is referring to worldwide Chinese rule. Xi Jinping views the disruption of the international system and the destruction of societies as intermediary steps towards his control, complete control of all humanity. So yes, that is Maoism in practice and we are seeing it every day. Mr. Jekielek: One of the people you interviewed for the book mentions that it is the warring states period that the Communist Party today draws a lot of the inspiration for its warfare tactics of. And Mao in particular, which is interesting because Mao, of course, was responsible for the Cultural Revolution to try to destroy the entirety of traditional Chinese culture, but not this part, apparently. Mr. Chang: Yes. Deception is the core of Chinese policy. You know, misdirection, lying, all the rest of it. And this goes back to the warring states period, which was before the imperial era. There’s a book by Michael Pillsbury, 36 Strategies, where he talks about this. Yes, deception is a key part of Chinese policy. Mr. Jekielek: What about this unrestricted warfare? Mr. Chang: That’s a 1999 book by two Chinese Air Force colonels, which argues that China can do anything to take down the United States. I don’t know how much more clear they could have made it. As James Lilley, our late great ambassador to Beijing, said, the Chinese always telegraph their punches. The book Unrestricted Warfare is telegraphing their punches. When you look at that, it somewhat rubs up against Pillsbury’s notion of deception as being the core of policy. But you can see the two side by side. The Chinese will tell you that puts you on notice. They told us about the people’s war going back to 2019. But in terms of when they strike us, deception will be very much a part of what they do. Mr. Jekielek: Some of these warfares, there’s drug warfare, which we talked about. There’s actually legal warfare, which there’s plenty of. I think they viewed it as a technique of war against America. We certainly didn’t view it that way. I mean, all these unrestricted or asymmetrical methods, which the Chinese regime viewed as techniques of attack, we didn’t see that. And in some cases, I don’t even know if we do today yet. Mr. Chang: Well, we have a very different conception of war and competition. And we have a political class that, for whatever reason, does not see China the same way that China sees us. So, for instance, President Biden won’t even call the Chinese an adversary. And certainly he won’t use the term enemy. But that’s the term that China uses for us. Mr. Jekielek: We’ve got this critical mismatch. Let’s talk about the immediate things that we kind of need to do here in your mind. Mr. Chang: We need to sever all of our contacts with the Chinese regime. Mr. Jekielek: That is very strong and almost unimaginable. How do you do that? Mr. Chang: I’m not saying it’s politically acceptable, but I am saying it is necessary and the reason is we’re being overwhelmed we are being overwhelmed by a Chinese regime our law enforcement is being overwhelmed our universities are being overwhelmed our businesses Hollywood just you name it and if we can’t we don’t have a hold on this and until we are able to manage this we need to take those contacts and sever them. It’s going to be tough. It will be painful, as we talked about, but nonetheless, it’s necessary. And that’s why I’m so concerned, because we are not willing to do what is necessary to save our society. Mr. Jekielek: How does this play out then? Mr. Chang: Nothing’s inevitable, but we see momentum toward war, and we Americans have got to ask ourselves, what is going to stop this momentum to war? Mr. Jekielek: Let’s talk about that a little more. Now you’re talking about kinetic war specifically. What do you see there exactly? Mr. Chang: I see what’s going on right now in the South China Sea against the Philippines, where we have these extremely belligerent, provocative acts, some of which constitute acts of war against the Philippines. And we’ve got to be clear about what’s going on. The Biden State Department has issued 12 warnings that we are prepared to defend the Philippines because of our mutual defense treaty with Manila. President Biden himself has issued three oral warnings to the same effect. The two most recent being in October of last year and in April of this year. The Chinese have just blown by those. They don’t care. They keep on getting even more belligerent. And that means deterrence is failing. Now, I can’t put my hand on my heart and say Xi Jinping has made the decision to go to war, but I know something 100 percent. And that is Xi Jinping has made the decision to risk war. And he’s made the decision to risk war with a treaty ally of the US, which means he is prepared to go to war with the United States at this moment. Mr. Jekielek: By these extreme provocations in the Philippines, that’s what you mean, right? Mr. Chang: Yes, they’re trying to break apart the Philippines. We see this right now at Sabina Shoal. Last month, it was Second Thomas Shoal. Before that, it was Whitsun Reef. But all of these areas, which are very close to the main islands of the Philippines, and very far from China. They are within the exclusive economic zone of the Philippines. That’s the band of water between 12 and 200 nautical miles from the shoreline where a coastal state has special rights. And also in 2016, the Permanent Court of Arbitration in the case Philippines v. China invalidated China’s claims to places like Sabina Shoal, Second Thomas Shoal, and all the rest of them. China, which is a party to the UN Convention on the Law of the Sea, is just completely ignoring its obligations. It has decided that regardless of anything, it is going to break apart the Philippines. This is aggression. It may not be as clear as Sudetenland, but it is the same thing. Mr. Jekielek: We have the Russia-Ukraine war, which of course some people describe as a proxy war with the U.S. with so much U.S. support. We have the Israel-Hamas war. We have these situations and even some noise with Japan, increased overflights in Taiwan, a lot of aggression and these increasingly belligerent events, like the ramming of the Coast Guard cutter. These things could escalate, right? Mr. Chang: The 60 Minutes program aired that segment. Their crew was on a Philippine Coast Guard vessel, and the Chinese rammed it anyway. The Chinese had to know that CBS crew was on that vessel, and they rammed it. And that shows that they now want to intimidate the rest of the world. This is a change in psychology. Mr. Jekielek: This is extremely dangerous. Are we on the verge of potentially a broader conflict? Because isn’t this how these world wars begin? There’s a lot of regional problems and then they combine into something much bigger and much graver. What do you think? Mr. Chang: There is a one word answer to your question—are we on the verge of a wider war? The answer is yes. Here is the longer version. If we go back to the 1930s, there were separate wars, and they merged into what historians now call World War II. And the question that we now have to ask ourselves is—are those conflicts that we see around the world going to merge into World War III? And the answer to that depends on China. And we see what Xi Jinping wants to do. We see the risks he’s willing to take, that he is prepared to wage war on the United States. I'll go back to that question I asked—what is going to stop the momentum of war? Mr. Jekielek: You think decoupling and the severing of economic connections is urgent. But would that solve this issue? Mr. Chang: We don’t know what will solve this issue if anything but I think that yes we need to decouple because we need to remove the incentives for people in our country to support the Communist Party. So that is that is just a necessary but not necessarily a sufficient step and you know we’re being helped by this. Xi Jinping is pushing out foreign companies. So it’s not like there’s only, it’s not just pulling our companies out. It’s they’re being pushed out. He’s a Maoist. We got to be clear about this because, you know, it’s not only foreign companies he’s targeting. His targets also include domestic Chinese private entrepreneurs. So he believes in a state society. He doesn’t have the power to push China back to the 1950s at this moment. But when he has the opportunity, that’s what he does. This is the guy who reveres Mao, as I mentioned. He’s pushing us out. That shows you the direction this guy is going. This is not a win-win type of behavior. Mr. Jekielek: You hear about these doctrines of strategic deterrence that we’ve used historically, this whole idea of nuclear weapons as a deterrent. Of course, no one really wants to use them. How do we create that deterrence at this point? Because isn’t that what we need? Mr. Chang: Yes, we need a president of the United States to say clearly that we will defend our friends and our allies. We will protect our own society. And we do not believe that it is our interest to support the Communist Party of China. If China declares us to be an enemy, then we are the enemy. If you are trying to destroy our society, which you are, then we are going to return the favor because we have no choice. We need to have a president say those things so the Chinese will back off. Unfortunately, nobody in our political system is willing to do that. We hear this, oh, we need to cooperate with China, find areas where we have common ground. Well, the Chinese hear that and they realize what they’re doing to us. And they think, who are these Americans? You know, America has got to be one of the weakest nations on earth because they can’t protect themselves. They’re not willing to say in public what’s going on? We just had the leaders of the Quad meet at President Biden’s beach house. There are all those statements where the U.S. sas that the Quad is not directed at any one particular country. The Chinese just look at that and say, huh? And we have got to have a determination in our society that, as Reagan said during the Cold War about the Soviets, where we win, and they lose. Mr. Jekielek: One thing that I’m reminded of, we were on this panel together earlier today, one of the things I asked about was public diplomacy, something that we don’t think a lot about these days, but back in the time of Reagan it was very important. Public diplomacy being the communication with the people of the regime as opposed to the leaders of the regime. Mr. Chang: It is something that we just stopped doing after the Cold War. We just, you know, never thought it was important. There are glimmers of hope. Mike Pompeo, when he was Secretary of State, I think it was July 23rd, 2020, he talked about America’s outreach to the Chinese people. Secretary Blinken talks about it as well. It’s just that they don’t do very much about it. And we’re going to have to because it is a very important element of what the Chinese do. You know, when you’re in an insecure regime, propaganda is critical to the regime. But we’re Americans. We believe that we don’t have to listen to our adversaries and enemies. We’re just entitled not to. And, you know, this is a possibly fatal weakness. Remember, in 1993, al-Qaeda killed six Americans with the bombing of the North Tower of the World Trade Center. We couldn’t care less. We couldn’t care less until Osama bin Laden, on one day, killed 2,977 Americans. And then we woke up and we said, how could that have happened? It happened because we were not paying attention to what our enemies were saying. Mr. Jekielek: Gordon, I think what you’re advocating for here is for the American people,or perhaps the people of liberal democracies around the world to realize and understand this threat which is being broadcast to us prior to the significant loss of life, which is the thing that traditionally shocks the system enough to change. Is that what you’re saying? Mr. Chang: That’s right. We’re a democracy. Go back and read deTocqueville about how democracies always tried to avoid the obvious, to avoid the obvious threats. And that’s the way democracies work. Look at Britain and France in the 1930s. Look at us now. England slept, as they said. We’re the ones who are sleeping now. Yes, we‘ll rally ourselves after a great loss of life, but I’d like to see us rally ourselves before then. I‘d like to see ourselves prevent the war that is coming. I’d like to see peace. I would like to see a stable world. But clearly right now, we can perceive the worst events in history. Mr. Jekielek: Potentially coming, if we don’t wake up. Mr. Chang: Yes, they will come if we don’t wake up. Mr. Jekielek: Gordon Chang, it’s such a pleasure to have you on the show. Mr. Chang: Thank you so much, Jan. I really appreciate it.

One of the odd things about the electoral college system is that it’s possible to produce an actual tie. Perhaps even odder than that, however, is that this year’s election is so tight (at least according to the polling data) that a tie is looking more possible by the day. So let’s go through the details of what a tie in the electoral college system would look like, what would happen afterward, and what Republicans, Democrats, and RFK Jr. are doing to hedge their bets. Join host Roman Balmakov on this week’s episode of “Facts Matter.” 🇺🇸 Epoch Times $1 Full Access Special Offer: https://ept.ms/RomanSale

NATO is preparing for a potential large-scale war, including the transport of wounded troops. As this happens, Ukraine is warning that Russia may strike its nuclear power plants, which could impact large swathes of Europe. At the same time, Israel has begun raids into Lebanon and issued a threat of regime change against Iran. We’ll discuss these stories and others, in this episode of Crossroads. Views expressed in this video are opinions of the host and guests and do not necessarily reflect the views of The Epoch Times.   🔵 Watch the full episode HERE 👇   https://ept.ms/3XQ9QYo Stay Informed. Stay Free. https://www.joshphilipp.com/

While the official elections are in November, many states have already begun early voting. Data on around 649,017 votes is already available and could give us a picture of how Americans are deciding on the next president. We’ll discuss this issue and others in this episode of Crossroads. Views expressed in this video are opinions of the host and guests and do not necessarily reflect the views of The Epoch Times.    🔵 Watch the full episode HERE 👇   https://ept.ms/3NmixEL Stay Informed. Stay Free. https://www.joshphilipp.com/

In August of 2024, the New York Times published a series of stories alleging abuse within Shen Yun Performing Arts. But both former and current Shen Yun artists are saying they’ve been misrepresented. So what’s the real story? Watch the video: The Epoch Times has been a media sponsor of Shen Yun for years, supporting its mission to revive traditional Chinese culture, all but lost in communist China. Views expressed in this video are opinions of the host and the guests, and do not necessarily reflect the views of The Epoch Times.

The first known survivor of China’s state-run forced organ harvesting regime recently went public with his story in Washington. Peiming Cheng, who was imprisoned for 8 years and brutally tortured for practicing Falun Gong, was also forced to undergo surgery in November 2004. He woke up with a foot-long scar across his side. Subsequent comprehensive medical examinations revealed he was missing a large part of his liver and a portion of his left lung. And in a stunning admission, the Chinese regime has recently publicly acknowledged doctors operated on Cheng without his consent—supposedly to save his life. So what is the significance of this case? And what’s next? In this episode, I sit down with international human rights lawyer David Matas, who was among the first to independently investigate allegations of forced organ harvesting from Falun Gong practitioners in China. Watch the video: I also speak to Robert Destro, who served as Assistant Secretary of State for Democracy, Human Rights and Labor and was instrumental in getting Cheng to America; former Congressman Frank Wolf, a fierce champion of human rights in his three decades in Congress; and Nina Shea, director of the Center for Religious Freedom at Hudson Institute. Views expressed in this video are opinions of the host and the guests, and do not necessarily reflect the views of The Epoch Times. FULL TRANSCRIPT Jan Jekielek: David Matas, such a pleasure to have you back on American Thought Leaders. David Matas: Glad to be back. Mr. Jekielek: David, I would never expect to meet an actual survivor of forced organ harvesting, this barbaric practice perpetrated by the Chinese regime. Please tell us about Mr. Cheng’s case. Mr. Matas: In terms of the raw data, I could see there was something there, because he’s obviously a Falun Gong practitioner. He’s obviously been organ harvested, because we have the medical reports and the x-rays don’t lie. I spent a fair amount of time getting down the chronology of the names and the dates. It really is unusual. One of the problems we dealt with is the lack of media attention commensurate with the gravity of the problem. Nobody can talk about that it’s actually a victim, because all the victims are dead. No bodies are autopsied. The conclusions we reached are the result of putting together a lot of different pieces of evidence. The problem that we faced in communicating the issue is not too little evidence. It’s too much. We’ve got thousands of footnotes, hundreds of pages, which together tell you a story. You can’t pick out a sentence and say, “That’s it.” But with him, it’s very simple. He says, “This happened to me.” Mr. Jekielek: On September 4th, survivor Peming Cheng publicly responded to and challenged the Chinese regime’s bizarre assertion that it operated on him for his own good. In a stunning admission, the Chinese regime has recently publicly acknowledged that its doctors operated on Cheng without his consent while he was imprisoned for practicing Falun Gong. They claim it was to save his life. Peming Cheng: My name is Peming Cheng. In November 2004, I was forcibly taken from Daqing Prison to the First Hospital of Daqing, where they did a surgery on me. This is my surgery scar. It’s 35 centimeters long. Today, as I stand here, I may appear normal. I walk and speak normally. But in reality, I can never return to the person I once was. My left side is in constant pain and it throbs with every beat of my pulse. At night, I struggle to breathe while I lie down, and it is truly unbearable. Mr. Jekielek: Peming Cheng was able to come to America with the help of former Assistant Secretary of State for Democracy, Human Rights and Labor Robert Destrow. Secretary Destrow, what did it take to get Mr. Cheng to America, because I understand there was a bounty on his head? Secretary Destrow: There was a bounty on his head and he was hiding in Thailand. When I heard about the case, I said, “Let’s get him out.” We had to negotiate with the Thai government because he wasn’t in Thailand legally. We got him out and we brought him here, and the rest is history. We put him through extensive medical testing and imaging and everything else. It’s pretty clear consensus that they took stuff out. We are now confirming the suspicions we’ve had for all these years that Mr. Chang was a victim of forced organ harvesting. We now know that and the Chinese have confirmed the details. Mr. Jekielek: Please explain that. How could they have confirmed the details? Secretary Destrow: They confirmed that the surgery happened. They confirmed where it happened. They confirmed when it happened. We were able to get Mr. Cheng into the United States, and we were able to get independent experts to look inside and see what’s missing. We confirmed that part. Mr. Jekielek: At the time, Cheng had been serving an eight-year sentence and had endured extreme torture and repeated electric shocks. The Chinese regime claims the surgery was to help him after Cheng, in protest of his persecution, swallowed a small blunt nail and blade. But medical experts say there’s no reasonable scenario where the operation, which removed significant portions of Cheng’s liver and lung, could have been to retrieve such swallowed items. Secretary Destrow: As the record shows, they didn’t need to go into his side all the way around his back and through his chest. They could have gone down into his esophagus with an endoscope and pulled everything out. They were fishing. Mr. Jekielek: Of course, now you are speaking about the official narrative. Secretary Destrow: The official narrative, yes. Mr. Jekielek: Is it surprising to you that there was any official narrative at all? Secretary Destrow: Yes, I’m amazed that there’s any official narrative at all. They’ve engaged in the conversation. As we lawyers would say, that’s an admission against interest. Mr. Jekielek: Among those who are now speaking up for Cheng’s case is international human rights lawyer Nina Shea, director of the Center for Religious Freedom at Hudson Institute. Nina Shea: It’s immensely important to have an actual survivor come forward and publicly state that he has been a victim of forced torture. It’s really important to have a person who has been a victim of forced organ harvesting and to have the medical scans and doctor testimony that that is hard evidence and that’s direct evidence. It’s not circumstantial. Then to have this odd response, this really quite damning response by the security police and the Chinese government that he was in fact a prisoner, he was in fact in a hospital, he was in fact subject to surgery without his consent. It’s damning. Mr. Jekielek: How could it be that he is alive? The protocol is basically to get rid of the evidence. He is a living embodiment of the evidence that the Chinese regime never wants to see the light of day. Mr. Matas: He was in hospital twice. The first time he had organs extracted, the second time, I really think his life was in danger. If he hadn’t escaped, I don’t think he'd be alive today. There are other people who escaped from China and escaped from detention. What’s unusual about him is not so much that he escaped, but that he was only partially organ harvested, and that he survived the organ extraction. People are basically being systematically killed through organ extraction. That’s what is unusual about him. The Chinese health system was not killing Falun Gong practitioners to silence them. They were killing Falun Gong practitioners to make money off their bodies. Why was the organ harvesting only partially done in this hospital? It’s really up to the Chinese government or the hospital to explain what they were doing. I’m in no position to explain that. All I know for sure is that the organs of a Falun Gong practitioner are missing. That much is obvious, but one can speculate. Wendy Rogers, who’s chair of the advisory board of this international coalition said that maybe a partial liver extraction was done because it could be used for a child. Another possibility was that it was just training or research, because this hospital is not a transplant hospital. What happened to him was unusual and unprecedented. Maybe they were just trying to figure out how to do it or trying to develop some techniques. Mr. Jekielek: What you are describing is shocking. Mr. Matas: You have to realize that this is the problem in dealing with mass atrocities. In Canada and the United States, we don’t live surrounded by mass atrocities. It’s not part of our daily lives, and it’s quite the opposite. If somebody raises their voice, it strikes us as unusual. The problem is that very often people, instead of believing what they’re seeing, see what they believe. Because people don’t believe this could be happening, or it’s very hard to believe it’s happening, they don’t see it. Communism isn’t just the ideology of the Standing Committee of the Communist Party. From childhood, the whole country is indoctrinated into communist ideologies. They see the world in a different way. What for us would seem shocking and unusual, in China under communism, has become a fact of daily life. Yes, this is a mass atrocity, but it’s not the first one. There is Tiananmen Square, which didn’t just happen at Tiananmen Square, it was a countrywide repression. There is the mass starvation. There is the Cultural Revolution. China has had one series of mass atrocities one after another with cover-ups, lying, pretense, and immunity. It’s just a repetition that generations of people under communism have lived under. They develop a different mindset as a result of it. Mr. Jekielek: Please give us some background about your work and how you got into the human rights field. Mr. Matas: I started out being concerned about the Holocaust. I was born in Winnipeg during the Holocaust. By the time I got old enough to appreciate what had happened, I realized that neither I nor any other Jewish person would be alive today but for the vagaries of war, and the fact that the Allied rather than the Axis powers won the world war. My focus was trying to bring Nazi mass murderers to justice. After the war, the Nazi leaders spread out all over the world to get immunity and to escape from prosecution. After World War II, it was easier for Nazi war criminals to get into Canada and the U.S. than for Jewish refugees to get in. The reality is I’m still working on that issue even today. The perpetrators are pretty much too old now to be prosecuted, the few that are still alive. Most of them have passed on, but there is still the matter of getting access to the records. The work that I’m doing is trying to find these Nazi war criminal records. Not only the ones that were prosecuted, but the ones that were never prosecuted. There were maybe a few dozen that were prosecuted, but historians estimate the number that came into Canada were in the thousands. The question is, what do those records show about them? That was one stream that got me into what I was doing. Then I had my day-to-day refugee practice. I was doing refugee work, and so I became very involved in human rights NGOs like Amnesty International, Human Rights Watch, and the International Commission of Jurists. Mr. Jekielek: You were involved in writing the original report assessing whether forced organ harvesting was happening in communist China. Please tell us about that and how that took you up to the present day. Mr. Matas: That all started off in 2006. A woman with the pseudonym Annie made a public statement in Washington, D.C. that her ex-husband had been harvesting corneas from Falun Gong practitioners at Xu Jian Hospital in Shenyang City, Liaoning Province. She also said that other doctors had been harvesting other organs, that the organs were being sold to transplant tourists, and that the bodies were cremated. Almost immediately after Annie said this, the Chinese government publicly denied what she was saying. There was an NGO, the Coalition to Investigate the Persecution of Falun Gong, that came to my colleague, David Kilgour. They had worked up a list of 20 people they thought could maybe do independent research on this issue. I was on the list and David Kilgour was on the list. We were told from the get-go there were no victims to interview, no bodies to autopsy, no witnesses, just perpetrators and victims because of the close surroundings, prisons and hospitals, and no documents, except government documents of prisons and hospitals, which you cannot look at. For me, the issue became not to establish it was happening, but simply to determine whether or not it was true. The coalition that asked us to do it didn’t give us any money, didn’t give us any data, and didn’t give us any direction. They just asked us, as indeed many other human rights victim communities have asked me in the past to do things. What we did was to not try and prove it, but try to either prove it or disprove it, rather than just leave it up in the air. What we did is we constructed evidentiary evidence and evidentiary trails, both of proof and disproof. If you’re going to disprove it, what would disprove it? If you’re going to prove it, what would prove it? We had 15 to 20 of these evidentiary trails. In a nutshell, the evidentiary trails of disproof went nowhere, whereas the evidentiary trails of proof each on its own produced some evidence. We put them all together, the answer was pretty clear that this was happening. Mr. Jekielek: At this point, it is well established that this is real. There has been the China Tribunal, which was very definitive. Ethan Gutmann wrote, “The Slaughter.” Your original reports were what convinced me early on. There have been multiple government resolutions on this. There is also legislation against it in some countries. Mr. Matas: There have been many peer-reviewed academic articles from Kirk Allison, Jay Lavee, Matthew Robertson, and Wendy Rogers that deal with particular aspects. There has been a whole slew of academics and researchers. Mr. Jekielek: Organ extraction is how people are killed, actually. There’s a paper in the American Journal of Transplantation about a small sample of Chinese research articles, where in 72 instances, unbeknownst to the people writing the articles, they were actually revealing that they had killed people through the process of organ extraction. Mr. Matas: Indeed. The transplantation profession has gotten so used to this that they don’t even think of it as wrong. Didi Kirsten Tatlow, a former reporter for the New York Times, was interviewing a couple of Chinese transplant doctors in English. Then they start talking to each other in Mandarin, which she speaks, and they don’t know that she understood them. One doctor says to the other, “We can’t talk about prisoners being killed for their organs.” The other doctor says, “Are you talking just about prisoners sentenced to death or also prisoners of conscience too?” You see, the Chinese government had set up this narrative because there was this huge boom in transplants after the persecution of Falun Gong began. The original Chinese narrative was that everything was coming from donations, even though there wasn’t a donation system at the time. Mr. Jekielek: As well as from death row prisoners, correct? We had some interviews of people who were told that it was from death row prisoners. Mr. Matas: Indeed. Then they switched the narrative from donations to death row prisoners. As far as I could tell, there were indeed death row prisoners that were sourced, but there wasn’t a big boom in death row prisoners at the time the persecution of Falun Gong started. It was quite the opposite. Numbers were going down because there’s a law in China that says you have to execute seven days after sentence. There was global pressure to cut down on the death penalty, which in fact happened. But the official narrative was death penalty prisoners, and they didn’t want to let anybody know about prisoners of conscience. Obviously, everybody in the system knew it, but they didn’t want to let anybody know about prisoners of conscience. They were expected to not talk about it. Didi Kirsten Tatlow hears this conversation of one doctor telling the other not to talk about this, because it’s not official party propaganda to talk about it. You get these occasional leaks that show you what is going on. Mr. Jekielek: You’ve described this as an evil yet to be seen on this planet. You alluded to that idea earlier when we were talking. Where is the outrage about this? Mr. Matas: To a certain extent, the problem is the newness of it. The capacity for good and evil is innate in all of us, but what changes over time is technology. What made the Holocaust different from anti-Semitism before, which had existed for millennia, was not anti-Semitism itself, which was not new. It was trains. It was poison gas. It was tanks. It was radio. It was microphones. These are the things that made the Holocaust what it was. What made this a new form of evil was the development of transplant technology. At the time it happened, people found the Holocaust itself hard to believe. It was not just the people on the street, but even very well-informed, articulate Jewish people. There was a justice of the Supreme Court of the United States. Frankfurter, who was presented with evidence of Auschwitz. A Polish spy, Jan Karski, was telling Frankfurter about it, who says, “I don’t believe you.” The person who had introduced Karski to Frankfurter said, “This man is telling the truth.” Frankfurter says, “I didn’t say he was lying. I just said that I don’t believe him.” At the time, Hannah Arendt didn’t believe it. Raymond Aron didn’t believe it. These were important Jewish philosophers. Rudolf Vrba escaped from Auschwitz with the plans of Auschwitz and was going around telling Jewish communities, “Look what’s happening. Get out. Get away.” Some people believed him and left. Other people didn’t believe him, stayed, and were killed. It seemed so out of sync with what people had known and seen before that it was just incredible. I think we see that with each new form of technology. Now, we’re dealing with the Internet, social media, and artificial intelligence. That is producing a whole new set of problems because of the same old penchant for either doing good and bad that we’ve always had. Mr. Jekielek: One of the things we haven’t talked about is the scale of this. How long has it been going on and how many transplants? I know the exact numbers are very difficult to determine. Mr. Matas: You don’t have exact figures, but you can get some idea of the scale of this. At one time there used to be four transplant registries in China: heart, liver, lung, and kidney, in different cities in China. One of them was in Hong Kong for liver transplants. The other three didn’t report aggregates publicly, but after persecution of Falun Gong began, liver transplants shot way up. The head of the liver transplant registry at the time was Wang Haibo. After the report came out, aggregate figures disappeared. I saw Wang Haibo at a transplant conference, because I’m going to them and he’s going to them. I know he’s head of the liver transplant registry. I ask, “Why did you cut off public access to aggregates?” He says, “We didn’t cut them off. You can have them. All you have to do is ask for them. If you tell us why you want them and how you’re going to use them, if we agree to the way you’re going to use the figures, then you can have the figures.” That’s what he told me. It’s the same with the hospitals. In 2016, we had all the hospital figures. They’re on the websites and not that hard to get. We didn’t go to every hospital, because there were 100o hospitals doing transplants. By that time, there were 167 that were state-approved, so the ones that weren’t state-approved started to go underground. But the state-approved ones were still above ground and posting their figures. We just added those up and we got to 100,000 transplants. Mr. Jekielek: Do you mean annually? Mr. Matas: Yes, annually. It started at 60,000 and then over the years went up to 100,000. Once we quoted the data stream, it disappeared. But after all, the selling of organs is a business, and it’s hard to run a profitable business without telling people about your product. They’re caught in this kind of in-between place. They’re also proud of their technological advancement. They like to boast about how they’ve developed transplantation, and how they can offer transplantation. They don’t even realize how they are implicating themselves until we quote them, then they see that and they take it down. Over time, it becomes harder and harder because the data streams disappear. That’s something we realize every time we quote something, that we‘ll never be able to quote it again, so to speak. We’ll never be able to update what we found because they’re just going to stop talking about what we found. The problem is not finding out what happened, but finding out the continuation, once we publish our findings. Mr. Jekielek: There was this idea of, “never again,” in response to the Holocaust. With forced organ harvesting, we did not deal with what was happening in 2006. The result is that this crime has now spread to other groups. Mr. Matas: No doubt about it. The big numbers for the Uyghurs didn’t start until 2017 when their mass detention started. It happened to the Uyghurs partly because of a depletion of the Falun Gong population through the mass killings for their organs. But it was also the development of technology increasing the time the organs could survive outside the body. Mr. Jekielek: It was the ECMO technology, correct? Mr. Matas: Yes, it was the ECMO [Extracorporeal Membrane Oxygenation] technology. But it wasn’t only that. The refrigeration techniques developed and the liquid immersion techniques developed. They were basically able to distribute organs throughout China from Xinjiang. We saw airport lanes in Xinjiang with signs that said, “Reserved for transport of organs,” and we took pictures of them.” It’s the same phenomenon. The Chinese started boasting about this as a technological advancement, that they were able to fly organs from Xinjiang throughout China, until we noticed it. Then they stopped talking about it. That would not have happened if the Falun Gong abuse had been stopped. There was a conference in Busan in South Korea where there was talk about developing within Asia a transplantation system like in Europe. Within the European Union, you can get the organs moving around. The Chinese were basically trying to promote that within Asia. That would mean prisoner of conscience organs going into South Korea and Japan, because there are a lot of transplant tourists now that go from Japan and South Korea to China. I’ve been going fairly regularly to Asia to talk about these issues. When I do, Falun Gong shows up. The Uyghurs show up. The house Christians and the Tibetans show up. But what I’ve also been seeing now is that the Mongolians show up. They are repressed, but I haven’t seen evidence of them being killed for their organs. But they figure they are the next group. This machine is eating up the Chinese population sort of group by group. Peiming Cheng: In prison, we made a pact among us prisoners that whoever survives must tell the world the truth about the persecution we endured. Today, I’m here not just to speak up for myself. Many of the people who were with me in prison have died and can no longer speak up. Mr. Jekielek: Former Congressman Frank Wolf, a fierce defender of human rights in his three decades in Congress, says evidence of the Chinese regime killing prisoners for their organs has been known since as early as 1997. Yet Western leaders turned a blind eye. Congressman Wolf: Harry Wu, who you may or may not remember, came to me in 1997 to tell me about this and showed me pictures. What they were doing was the Chinese government was going in and taking the blood type of prisoners. When people would fly in from the West, they would execute them. Harry showed me pictures of the execution and then they would do the transplant. Now, it has increased and nobody is doing anything about it. There are indications that there are some American institutions involved. This has to stop. Mr. Jekielek: What do you think can be done about it right now? Congressman Wolf: You could get a trial law firm or one of the human rights groups to bring suit against any American institution. If there are any American institutions participating in this, they should be told to stop. If they do not stop, then there ought to be litigation against them. You’re killing people. Mr. Jekielek: There has been legislation passed in a number of countries. Actually, you mentioned Jacob Lavee earlier. Very early on, he was instrumental in getting legislation passed that would prevent the social safety net in Israel from paying for organ transplants in China. Mr. Matas: That was in 2008 or 2009, and he was the first to do so. Mr. Jekielek: Recently, something very similar has been passed in three U.S. states. The Falun Gong Protection Act was passed by the House by voice vote, and now it’s gone on to the Senate. This is the first federal law around this issue. Mr. Matas: There is also the Stop Organ Harvesting Act, which also has passed the House of Representatives and is before the Senate. But it’s not enacted and it’s still kicking around. I think Texas has passed an insurance law which is China-specific. Israeli law now says you can’t pay insurance if the person goes to a country and gets a transplant. In Israeli law, the target country isn’t specifically mentioned. But Texas actually mentions China, saying that you can’t insure transplants in China. I believe Utah has a law like that as well. Mr. Jekielek: What is the value of passing legislation with sanctions against people who will do this, which is on the table right now? Mr. Matas: Yes, the U.S. law is about sanctions, immigration, and reporting. It is about increasing awareness, because I would say that most patients are not aware that somebody is being killed for their organs. It may be wishful thinking. It may be willful blindness. But some of them, perhaps most of them, genuinely believe that whatever fabricated story the Chinese communists come up with. It’s not going to stop the system within China, but it would disincentivize people to go over to China for transplants. Mr. Jekielek: What’s your hope for the exposure of this story, the media attention, and the legislation before Congress now? Mr. Matas: The wheels of justice and the wheels of human rights grind slowly, but they grind inexorably. Eventually, the system will catch up with the party, because the victimization will catch up with the party. Ultimately, it’s not just communist China, it’s victimization everywhere. Basically, what you’re dealing with in a repressive system is insiders and outsiders. The insiders repress the outsiders, but nobody lasts forever. Eventually, the outsiders become the insiders, because they’re the only ones left. They don’t want to continue with it anymore because they’ve seen the victimization. It will just collapse under the weight of its own harm. You asked what I hope will happen. My own view is, don’t hope. Don’t predict. Don’t sit back and think about what the future will be. Make the future. Mr. Jekielek: David Matas, such a pleasure to have you on the show. Mr. Matas: It was a pleasure to talk to you. Thank you very much. This interview was edited for clarity and brevity.

With less than two months to go until Election Day, there’s a threat worth discussing that cuts across party lines. Regardless of whether a Democrat or Republican is in charge, Americans face the real threat of a hostile foreign actor (Russia, Iran, North Korea, China, and so on) using what’s known as an EMP (electromagnetic pulse) attack to destroy our technological advantages. An EMP attack is one of the most deadly threats facing our country, and experts warn that it’s a lot worse than you likely even imagine. Join host Roman Balmakov on this week’s episode of Facts Matter. 🇺🇸 Epoch Times $1 Full Access Special Offer: https://ept.ms/RomanSale

The fentanyl scourge—the leading cause of death for Americans aged 18 to 45—is a “CCP-run operation,” says investigative journalist Peter Schweizer. He’s the author of, most recently, “Blood Money: Why the Powerful Turn a Blind Eye While China Kills Americans.” Watch the video: In this episode, he breaks down the Chinese regime’s disintegration-warfare strategies to destroy America from within—from killing young Americans with fentanyl to radicalizing protests in America so they adopt increasingly violent tactics. Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.     FULL TRANSCRIPT Jan Jekielek: Peter Schweizer, such a pleasure to have you on American Thought Leaders. Peter Schweizer: Thanks so much for having me. Mr. Jekielek: Peter, fentanyl has become the number one killer of Americans under the age of 45, about 100,000 people overall per year. You make the case that it’s actually the Chinese regime, the CCP, that is deeply involved in every stage of the process leading to those deaths. Please break that down for us. Mr. Schweizer: People assume that the major problem here with fentanyl poisoning in America, which is now the leading cause of death for people under the age of 45, is the Mexican drug cartels. The drug cartels are certainly involved, but they are the junior partners. This is a CCP-run operation, and you can look at every link in the chain and discover that. With the precursor chemicals that make fentanyl, 90 percent of them come from China. Those precursors mainly arrive in a single port in Mexico, the port of Manzanillo on the west coast. The international terminal at the port of Manzanillo is not run by a Mexican company. It’s not run by an American company. It’s run by a Chinese company. That is one of the reasons they have a hard time stopping this flow of precursors. Those precursors are then moved from the port of Manzanillo up to a town in northern Mexico where they are combined to create this deadly cocktail of fentanyl. According to the Department of Homeland Security, there are some 2,000 Chinese nationals that are helping the drug cartels do this. There is CCP influence, even at this level. The vast majority of people that are dying of fentanyl overdoses don’t even know they’re taking fentanyl. It’s being laced into illegally made pills that look like Vicodin and Adderall. For the drug cartels to do that, they need pill presses and pill molds, these small molds that make these fake pills look like the real thing. The drug cartels do that, and they get those pill presses and pill molds from China. According to the Department of Homeland Security, China is selling those to the drug cartels basically at cost. In other words, they’re not trying to make money off this part of the deal. Once they’ve created these pills, they smuggle them across the border. The Mexican drug cartels need a secure means of communication, so what do they use? They use Chinese apps and Chinese encrypted communications. They use Chinese communication devices because they know that China will not share those communications with U.S. law enforcement. The final link in this chain is money laundering. Every drug cartel needs to launder these large cash profits. It used to be in the old days that the drug cartels used Latin American banks when they were selling heroin and cocaine. These days that has changed. The Mexican drug cartels now use Chinese state banks to launder their money. Often they use Chinese students in the United States on education visas to do so. The cartels are involved, but they are the junior partners. Without China’s involvement, we would not be facing this scourge in America today. It’s part of this broader disintegration warfare that China is involved in. Mr. Jekielek: It’s not commonly known that there is an unholy trinity of cooperation between Chinese state security, these wealthy Chinese business tycoons, and organized crime itself. For all this to work, all three parts are required. These relationships drive this corruption by the CCP in the West. Mr. Schweizer: That’s a very important point, because people will often think Chinese organized crime is similar to organized crime in the United States, that is kind of like an outsider looking in. The fact of the matter is that the CCP and the Chinese triads, the organized crime, basically made their peace in the 1980s. Deng Xiaoping sat down with triad leaders and said, “Look, as long as you are patriotic and pro-CCP and not committing major crimes within China itself, we will provide you safe harbor. We will work with you to direct your activities against the West.” Indeed, they have done so. Today, there are numerous senior organized crime figures that are members of Chinese consulates. These are the consultative bodies that the CCP has set up. These are individuals that are known to be linked to Chinese organized crime and the CCP has brought them into the fold. We know that President Xi himself has a cousin who has been linked to organized crime. We know that many of the Hong Kong-based billionaires have been identified in intelligence reports in Canada, in the United States and elsewhere as being both pro-CCP and linked to Chinese organized crime. One of those would be Li Ka-shing, the Hong Kong investor who happens to own Hutchison Ports, which is the company that runs that port in Manzanillo, Mexico. He has been linked to Chinese triads for decades, and he’s very close to the CCP. When you see Chinese organized crime engaged in activities in the West, whether that’s human trafficking, illegal trafficking, or drug distribution, this is part of a cooperative effort with the CCP. The CCP protects these individuals when they’re in China. There are numerous instances of this, including with President Xi when he was the head of Fujian province. He absolutely did this and he continues to do this today. It’s part of this sophisticated form of warfare that China is using against the West. It gives them plausible deniability, but it has these very damaging results on the West, nonetheless. Mr. Jekielek: Peter, in your book, you mention. “Unrestricted Warfare,” this infamous book written by the two Chinese colonels. This means warfare with no rules whatsoever and using all these different methods like the three warfares. You cover things that are not well known, like the CCP’s rampant use of legal warfare and psychological warfare. This is the kind of warfare that the CCP is using to influence outcomes in America. How does this disintegration warfare that the CCP is using with fentanyl fit into the picture? Mr. Schweizer: That’s a great question. The book, “Unrestricted Warfare,” published in 1999, essentially was about China resetting the rules of conflict. The book basically says, and this continues to be the Chinese approach, “We don’t want to have a kinetic war with the United States. We’re building aircraft carriers and military capabilities, but the U.S. has military superiority on every level. If we had a kinetic war with America, it would be severely damaging to China itself. Unrestricted warfare broadens the definition of warfare to include everything, including drug warfare, environmental warfare, and nothing is off the table. In 2010, two senior Chinese military officers published a book called “Disintegration Warfare.” What it really does is set up their main goal. What is their main goal? The goal, as the title implies, is to disintegrate the United States. On the cover of this book, “Disintegration Warfare,” there is the very famous quote from Sun Tzu, the ancient Chinese strategist. The quote says that the best strategist is the one who defeats his enemy without actually fighting him. That is what disintegration warfare is all about. Essentially, it says, “We’re going to apply unrestricted warfare, and the goal is to disintegrate the United States internally. We’re going to cause deaths by fentanyl or stoke internal violence in the United States. We’re going to pit American against American, by exacerbating social divisions.” It all fits closely together. The problem is that in Washington, DC, to the extent that people are talking about the China threat to the United States, the focus is almost exclusively on a kinetic war. The response is, “We need to build more aircraft carriers. We need more security and more power projection into the Pacific.” I’m not opposed to any of that. But the problem is you’re preparing for a different war than China is already waging. China is already engaged in a war that is leading to casualties, social division, and chaos in America. Washington, D.C. is not even paying attention to that. They are focused on the prospect of a future war that may never happen. Because the war that China is fighting right now is successful and is yielding great results for them. Mr. Jekielek: They are officially fighting a war. Xi Jinping calls it the People’s War, which he announced in 2019, but most people aren’t aware of it. Mr. Schweizer: Yes, that’s exactly right. President Xi is a different leader than Hu Jintao and some of the other CCP leaders we’ve had. Don’t get me wrong. They all adhere to CCP doctrine—the goals, the concentration of power, and the abuse that we see from CCP leaders going all the way back. But President Xi, I would argue, is tougher and more aggressive than previous leaders. There are really only two stories that I could tell that would illustrate that point. The first one is that President Xi is married to a very famous singer in China. After the troops in China committed the massacre at Tiananmen Square, it was President Xi’s wife who serenaded those troops right after the massacre. That tells you how these people think and where they are coming from. The second story is that the Chinese people are not going to be able to do anything. The third story, that highlights where President Xi is coming from, is his relationship to his father. His father was a revolutionary figure. He was purged, but then was resuscitated. President Xi deeply admires his father and even built a mausoleum in his honor that celebrates and highlights his career. One of those highlights occurred when Xi’s father was 14. His father tried to poison his teacher because his teacher was not sufficiently revolutionary. President Xi thinks this is a good and noble thing that his father tried to do. The point is, this is a political head of state who has a distinctly different view than American or European politicians. He appreciates and respects a certain hardness, and that has been demonstrated by both his wife and his father. It’s important for us to understand precisely who President Xi really is. Mr. Jekielek: Did you see that clip from the 3 Body Problem series on Netflix, depicting the Cultural Revolution and a struggle session from back then? Mr. Schweizer: Yes, I have. It is stunning. Mr. Jekielek: We have Xi Jinping’s father trying to poison his teacher with that revolutionary fervor that we see in the 3 Body Problem clip. Many people were shocked at the barbarity of it. The Red Guard kids were running the insane asylum at the time, so to speak, and killing someone wasn’t actually a big deal. It was something the CCP appreciated. Xi himself was part of that. His father was purged and had to go into the countryside for re-education. He was in disrepute and spent a lot of his life getting back to his original status in the party. It’s interesting that Xi ended up becoming the paramount leader after what happened to his father. Mr. Schweizer: Yes, it’s interesting, because most of us would recoil and reject a system that had such a devastating effect on our family. That is certainly not President Xi’s reaction. We need to understand this when talking about the fentanyl crisis in America and other things that I highlight in the book that lead to the deaths of Americans. We can’t mirror image them and say, “It’s hard for me to imagine any leader wanting to do that.” You have to show due respect to the foreign official, meet them where they are, look at what they value, look at what they think is noble behavior, and then understand them accordingly. Certainly when you’re talking about President Xi, if you were killing 100,000 Americans through fentanyl poisoning in alliance with the Mexican drug cartels, you would do it in such a way as to avoid blame. In their strategic doctrine, they call it, “Murder with a borrowed knife.” In other words, if you’re going to kill somebody, do it with somebody else’s knife so they get the blame. But again, it’s not a far stretch when you look at President Xi’s history, what he values, and who he admires, to see that this would be a totally legitimate strategy for him to employ against the United States. Mr. Jekielek: A part of this drug warfare in America is this harm reduction strategy. Effectively, you’re not allowed to prevent the addict from taking their drugs. In fact, you facilitate that for them, which has created these open-air drug markets in LA and San Francisco. Is this part of this whole system that delivers those 100,000 deaths per year, and is the CCP involved in this? Mr. Schweizer: It’s possible, I don’t know. But the notion of treating fentanyl like any other drug, whether it’s heroin or cocaine, completely misses the mark. Yes, you do have some people in San Francisco and other urban areas who are knowingly taking fentanyl, which is a terrible idea because it is so potent. If you get the dosage wrong, you’re dead immediately. But the vast majority of people that are dying have no idea they’re taking fentanyl. They are college students who are studying for a final exam and a roommate says, “Here, take this Adderall because it'll help you concentrate.” They take the Adderall and they overdose because it actually wasn’t legitimate Adderall. It was something somebody bought on the street. It was made in Mexico, and they got the formula wrong, so to speak. There’s too much Adderall in it and they died. Treating this as a drug addiction problem like heroin or cocaine completely misses the mark. It’s also extremely convenient for the Biden administration, because by treating it as a drug addiction problem, rather than what it is—poisoning—it absolves you of trying to confront the CCP on this. Essentially, you are saying this is a domestic problem in the United States. Here’s the reality. Fentanyl overdose deaths are a massive problem in the United States and Canada. They are not much of a problem in Europe right now, but the network and the supply of pharmaceuticals there is going to rise and they’re going to face the same challenge. If you don’t believe fentanyl is a China problem, just look at what happened during the Covid crisis. During the pandemic in 2020, fentanyl deaths actually went down because supply chain disruption precluded precursors from even getting to Mexico or the United States. That has been demonstrated in medical journals. They are completely off base in the drug addiction approach they are taking. It allows them to avoid having to confront China, who is really behind this poison that is killing so many Americans. Mr. Jekielek: How easily could Xi Jinping stop this supply chain? Mr. Schweizer: He could stop it overnight. It’s simply a question of banning the production, enforcing the ban, and throwing people into jail for producing this stuff. A lot of the research demonstrates that about half of the companies that are selling fentanyl precursors online to drug dealers or other people in the West are officially registered companies. As I highlight in the book, many of them are politically connected. These are not people in the back room somewhere in Shanghai that are throwing this stuff together and covertly shipping it to the West. These are large, politically-connected chemical companies that are doing it. The fact is they do not cooperate with U.S. law enforcement when it comes to the people that are involved in the fentanyl trade. The fact that the CCP embraces drug pushers and brings them in as advisors to the CCP is clear evidence to me that they don’t care. If they decided to fix this, they could fix it, but they just won’t. I'll give you one brief example from 2021. The Biden administration sanctioned a Chinese gangster that goes by the name Broken Tooth. Our Treasury Department sanctioned him in 2021 for his involvement in the fentanyl trade. Three months later, the Chinese government gave him an award for his activities. During that award ceremony, he gave a rousing speech saying that he was proud of what he did. This is all out in the open. It’s not being sanctioned. The notion that, “China is trying very hard, but they can’t fix this,” is an absolute joke. Mr. Jekielek: Why isn’t the U.S. government doing anything about this? Mr. Schweizer: There are a couple of reasons. One is once you acknowledge the reality of what China’s doing to the United States in the area of fentanyl, you realize pretty quickly you cannot have a normal, ordinary relationship with this government until these problems are fixed. That makes life very complicated for political figures in Washington. There are some that are talking about this, but a lot of them, frankly, go along to get along. They don’t want the heavy lift of having to make these hard choices. They don’t want domestic lobbies, Big Tech, and Wall Street coming at them saying, “You can’t disrupt our ties to China.” That’s part of the broader problem. More specifically, you have figures in the United States who have deep financial entanglements. Some of them brush perilously close to the actual fentanyl trade itself. That means if you highlight this issue, it could be deeply embarrassing and damaging to them. I'll just give you two brief examples. One would be Joe Biden and the first family of the United States. We first reported back in 2018 that commercial ties exist between the Biden family and these Chinese financiers. Back in 2017, the Biden family received a $5 million interest-free, forgivable loan from a Chinese businessman who, it turns out, was business partners with a Chinese gang leader who goes by the name White Wolf. White Wolf and his gang are the entity that set up the Sinaloa-based trade war. They’re the ones that set up the Sinaloa cartel in Mexico in the fentanyl trade. Between the Biden family and the fentanyl trade, you literally have one degree of separation, this businessman that gave them this $5 million interest-free loan, which of course, the Bidens never repaid. Honestly, does Joe Biden want to have a conversation about the Chinese involvement in the fentanyl trade? I kind of doubt it. The other person I would look at is Mitch McConnell, the Republican leader in the Senate. His family actually does have a legitimate shipping business. But the problem is that they are wholly dependent upon the good graces of the Chinese government to function and make a profit. The Chinese government has built a lot of their ships. They finance the construction of a lot of their ships. They provide crews for those ships. Some of their clients and customers are Chinese state-owned companies. Again, I ask you, does Mitch McConnell really want to call out the Chinese government on this? I don’t think so, because the Chinese government could destroy the family business overnight. That is the more specific problem that we have. Unfortunately, these people with entanglements are oftentimes at senior positions in our government. Mr. Jekielek: There was a huge push in the 2000s to get into China at any cost, including setting up these partnerships where you transfer your intellectual property, which has fueled a huge technology transfer. There are many very affluent Americans in the relationships you just described. Graham Allison, one of the paramount scholars of China from Harvard recently wrote an editorial in the Global Times, a mouthpiece of the Chinese regime. In this interview he says that China and the U.S. are inseparable like conjoined Siamese twins. If one tries to strangle the other, it would be suicide. Overall, how would you view that statement? Mr. Schweizer: It is ridiculous on multiple levels. If you look at what Graham Allison has written about the Thucydides trap, his prescription is to essentially give China what it wants. He says that the United States is this established power, and China is this rising power. His view is that inevitably conflict will result unless both powers act accordingly. His prescription for the United States is essentially to give China what it wants and everything will be fine, which is a ridiculous notion. No, we are not conjoined twins. We have very different nervous systems, which is part of the problem. China certainly does not view the United States as somebody that they cannot abuse, that they cannot manipulate, and that they cannot do damage to. They do it all of the time. This is straight out of the tradition of Henry Kissinger. In the 1970s Kissinger said that as we opened up to China, China would become more like us. That certainly has not happened. I don’t give a lot of credence to this establishment line at all. It has not worked out as they predicted it would. It has not mellowed China. It has emboldened China and it has put the United States in peril. To your broader point, this is one of the challenges that we face. Because as our business community has embraced China, China has been able to turn to our business community and effectively use them as de facto lobbyists against their own government. Let’s remember that when the Trump administration imposed tariffs on Chinese goods and products—set aside whether one thinks that’s a good policy or not—what did China do? They didn’t go to Washington to complain about it. They went to Silicon Valley and Wall Street and said, “You go to Washington.” That’s exactly what these entities did, so it is a dangerous, perilous path. China calls this elite capture, when you essentially get the elites to do your bidding. What they’re looking for is big help with a little bad mouth. A little bad mouth means, “If you want to talk about the Uyghurs, if you want to talk about human rights, if you want to talk about Taiwan, that’s fine. But help us on the big things, which is access to your technology, to your capital, to your capital markets, and to your commercial markets. If you give us those things, we are going to be very happy.” That is exactly what America’s elites have done over the last several decades, and Beijing must be exceedingly pleased with it. Mr. Jekielek: The U.S. basically financed building the world’s biggest dictatorship. Mr. Schweizer: It has. You think of the old John Maynard Keynes line, “If I owe you a thousand pounds, I have a problem. If I owe you 500 million pounds, you have a problem.” Our companies have invested so heavily in China, but have a very difficult, if not impossible, time pulling their assets out of that country. it creates a sense of extortion with America’s political elites. It’s the reason they don’t want to raise questions about fentanyl. They don’t want to raise questions about TikTok or many of these other problems, because if they do, China can damage them overnight. Just look at the relationship with the American investors in ByteDance, which is the parent company of TikTok. I was stunned. I didn’t even realize this until I read it in Fortune magazine. The American investors in ByteDance, and there are a number of them, signed an agreement when they became shareholders of that company, which says if they disparage or criticize ByteDance publicly, their ownership stake in the company can be seized without compensation. Think about that for a second. That would not be legal in the United States, but that’s the agreement in China. What has happened? You now have these major investors, the Carlyle Group and Jeff Yass, who are major shareholders in ByteDance, who cannot honestly talk about the fact that ByteDance is a threat to the United States. Because if they did so, they would lose their multi-billion dollar stakes in that company. That’s just a small microcosm of the kind of leverage that China exerts over America’s financial and political elites. Mr. Jekielek: Let’s talk about TikTok. In “Blood Money,” you do a great job of detailing all the various unconventional weapons that the CCP wields against America and the West. TikTok might actually be the most pernicious and the most effective. What is the threat posed by TikTok? Mr. Schweizer: I would agree with your assessment, and here’s why. ByteDance, the parent company of TikTok, is not just a Chinese company, which is a challenge in and of itself. If you’re a Chinese company, you are going to act at the behest of the CCP and the Ministry of State Security. ByteDance is a Chinese company joined at the hip to the Chinese military/intelligence complex. What do I mean by that? First of all, the all-important algorithm that TikTok uses to effectively addict users in the West and to give users exactly what they seem to be looking for, is certainly a company secret, but the CCP has also designated it as a state secret. This is not just a normal, proprietary thing that a company in China happens to have. This is something that is valued highly by the Chinese state itself. That should already be a red flag. The headquarters of ByteDance in Beijing is located not far from the Ministry of State Security, which is the superspy apparatus of China. It’s the FBI, the CIA, the NSA, all of those intelligence agencies rolled into one. ByteDance actually does joint research with the Ministry of State Security. One of the things they research is how to manipulate people online. My point is, it’s not just a Chinese company. It is a Chinese company that works closely with the Chinese intelligence apparatus. There is all this debate on Capitol Hill asking, “Might China use this as a form of propaganda? Might they use it to manipulate young people?” They’re not having that debate in China. My favorite section of “Blood Money” is where I quote from Chinese military officials and propaganda officials, describing how to use online platforms and how they are using online platforms like TikTok to manipulate people in the West. I quote them extensively, because you don’t have to believe me, you can believe what they’re actually saying. They talk about how TikTok is the perfect platform because it’s such an emotional medium, especially for young people. Their belief is that if they can get a young person emotionally wrapped up in a video, the young person embraces what they’re feeling as a sign of their own righteous indignation. As a sovereign person, they are choosing to be moved by this video, when in fact they’re being manipulated. The propagandists say, “Once they cross that line and think they own that feeling, then we’ve got them. Because now we can steer them in the direction we want them to go.” They are already doing that. My view is that this is a highly potent weapon. We are going to allow an entity, which is joined at the hip with the Chinese Ministry of State Security, to have unfettered access to our young people. We say, “We’re not going to worry about it. They are 13-years-old and they can figure it out on their own,” which is patently absurd. The bill that has been introduced in Congress is a good bill. Certainly there are problems with other Big Tech companies, including those in the United States. But it’s not an either-or thing. We need to be dealing with both. The CCP threat from TikTok is absolutely clear and real, and it’s already yielding results for them. Mr. Jekielek: That’s certainly what they’re saying in China. Many people have seen “The Social Dilemma,” an excellent documentary that explains how social media companies create detailed profiles on each of us. They also specifically present content to manipulate, to addict, to get us to use these platforms more. There is an ample body of information showing how these various social media giants manipulate people. What ethical barriers does the CCP have here? There is a much lower level of ethical scrutiny by some of these social media companies or even our agencies in the U.S. I want to contrast that to the CCP. People get so caught up in this new and disturbing reality that you can lose the context here. Mr. Schweizer: Yes, the context is key. Whether it’s Meta or Microsoft or another platform, when you have the right political leadership in the United States, you can have accountability. You can have shareholder meetings where people actually raise these issues. There are ways to publicly pressure American companies. Are they doing a good job of that on Capitol Hill? Not really. I would give them a C. They’re talking about it, but they’re not doing enough. The problem presented by a Chinese entity like ByteDance is completely different. First of all, you don’t have the ability to pressure them through shareholder action. You can have U.S. regulators bring the head of the American branch of TikTok to testify before Congress. But ultimately, if decisions are being made, he’s not the one making them. The decision makers are back in Beijing. Then you add the fact that the Ministry of State Security is closely working with ByteDance, which adds a completely different element. To me, you can’t compare the two. Again, it’s not an either-or question. We should be dealing with both. But the ability that we have to hold American tech companies to account is 10 times greater than our ability to hold to account a foreign entity owning an algorithm that is a Chinese state government secret. This is an entity working with a foreign spy apparatus on a massive propaganda operation to capture the hearts and minds of young people in the West. Let’s remember, they are very sophisticated about this. It’s not as if they’re going to be sending images on TikTok of Chairman Mao marching through Tiananmen Square. They’re much, much more sophisticated, and that’s what people have to be worried about. If they’re confident that they can recognize CCP propaganda and they don’t need to worry about it, that is the first indication that they are subject to it and could easily be manipulated by CCP propaganda. Mr. Jekielek: Based on the 2019 Chinese national intelligence law, they are required to spy for the benefit of Chinese state security. There are multiple layers to this, not to mention the doctrine of military-civil fusion, which is one of the top priorities of Xi Jinping. Whenever there’s an opportunity for a military application, it must be enacted, based on Xi Jinping’s policy directions. One more thing I wanted to mention here, TikTok isn’t actually available in China. Mr. Schweizer: That’s right. They have their own version pronounced Douyun. It is a domestic version of TikTok that is very different. This is what Chinese officials call cognitive warfare, this desire to dumb down the West. On TikTok, you get somebody with blue hair screaming about something. It’s basically cotton candy. Largely what you get on TikTok is entertainment, pranks, and that kind of content. The Chinese version is very different. They lead with educational, cultural, and scientific videos that supposedly contribute to the cognitive development of young people in China. Our kids are getting cotton candy from ByteDance and children in China are getting spinach. Again, this is part of cognitive warfare, something they’ve refined. They want to match the intellectual capabilities of their young people with ours. They are engaged in a whole host of destructive behaviors, and TikTok is just one. They are involved with massive illegal marijuana grows in the United States that are three times more potent, which they are selling illegally here in the United States. This is also part of this cognitive warfare that is a designed campaign to dumb down Americans. You can look at the results and see that it is absolutely working. Mr. Jekielek: I recall during the BLM-Antifa riots in 2020, there were instructional videos on TikTok. Mr. Schweizer: Yes, there were instructional videos on TikTok. There have been other videos on how to engage in criminal behavior. Some of these TikTok pranks that have gone viral are dangerous. One of them involved loosening the lug nuts on tires on people’s cars. Yes, this is very damaging content culturally in the United States. It also attempts to sow division and chaos in the United States. Videos get promoted that push content that is highly divisive here in the United States. This is part of the Chinese strategy of using TikTok as a mouthpiece for China to manipulate Americans. One Chinese official said that TikTok is basically China’s Trojan horse to use against the West. Mr. Jekielek: I saw that headline, but didn’t realize it came from the horse’s mouth, so to speak. Mr. Schweizer: They are very bullish on TikTok. They like the fact that it’s a Trojan horse, as this one official calls it. They like the short video format because they feel like it is addictive and it’s emotive. They believe that by using that emotion they can steer the values that people have. One Chinese military official believes that TikTok is a key ingredient in basically defeating the West without firing a shot. In other words, this is the ancient Sun Tzu strategy of trying to defeat your enemy without actually fighting him. Who knows if TikTok is that potent? But China is absolutely bullish on it and sees it as a very, very powerful tool that they are using against the United States already. Mr. Jekielek: One of the provisions in the legislation gives the president discretion to target a particular country or a particular app. The fear is that this discretion will be used by our own government. There’s been a lot of abuse around the issue of free speech and there are cases about this at the Supreme Court. Does this legislation give the American leaders too much discretion to force divestment on American companies, not just on Chinese-owned companies? Would TikTok under the control of U.S. actors also prove to be highly problematic. Mr. Schweizer: Those are legitimate questions to ask. My view is to quote Winston Churchill who said, “You can’t make perfect the enemy of the good.” There has to be some decision making mechanism to decide if a forced divestiture needs to take place. I’m not sure where you put that authority other than the president. I understand that you might see abuses of power. We have RICO statutes, the laws were set up to deal with organized crime networks that are now being used against Donald Trump in Georgia. That certainly seems to be an abuse. But the solution is not to say, “Then we don’t want to have RICO statutes.” What we need is a vigorous judiciary and you have to make sure that the law is specific enough to address concerns about abuse. Could the law be abused? It might be. But the law specifically says, “A foreign media company that is owned by a foreign adversarial power.” Immediately it is saying if it’s a U.S. based media company like Donald Trump’s Truth Social, it would not fit the definition. Were a president to try and abuse that and to force a divestment of that company, it would certainly be challenged in the courts. I don’t see how that could be upheld. It narrowly defines it enough to be foreign media companies owned by adversarial powers. That is important. Then the second question is, “If there’s a forced sale of TikTok, who would end up owning that entity? The law also says that the purchaser acquiring those assets or that company in the United States would have to be approved and pass scrutiny with regulators, including the Federal Trade Commission. What does that mean? The first example is Mark Zuckerberg, who already controls Facebook and Instagram. There is just no way that the Federal Trade Commission would approve Mark Zuckerberg to be able to own this entity. I think there are enough constraints on this. The question is, “How do you improve this law to make it better?” If it’s specific to TikTok itself, which some people have said, I believe that would be declared unconstitutional almost immediately. You cannot pass a bill that is related to one specific company. There are constraints in place. We have an independent judiciary that would restrict abuses or efforts by a president to abuse the authority. But I believe that when it comes to TikTok action needs to be taken. I think that this law is a good one. Mr. Jekielek: These types of apps have an inordinately huge influence on their users. That ability to weaponize our psyches is the most potent in TikTok and it’s in the hands of an adversarial foreign power. The vast intelligence gathering of this particular app is above and beyond what U.S. apps take in. That absolutely makes this a national security issue, not a free speech issue, which is how it has been portrayed. There is a very real fear that freedom of speech is being systematically curtailed here in America. Mr. Schweizer: It is being curtailed in America,in the case of TikTok. It’s not a free speech issue. The only one that would make it a free speech issue is the CCP. They’ve essentially said, “If you force the sale of TikTok to American-based investors from our ownership in China, we’re going to shut the app down.” In other words, they have said they are going to eliminate this platform, which they have the right to do. They own it. But to me, that’s indicative of what their true interests are. It’s not to provide a platform for commercial activity. It is to create a platform for an influence operation. Free speech is a major issue. The problem is having concentrated power in a handful of companies. In the case of ByteDance with the forced sale, you’re going to have a new company emerge that would be unique to TikTok, and that would be a good thing. We don’t want it controlled by another Big Tech company. We want it to be a platform that further concentrates and restricts authority. What we need in Washington, D.C. is vigorous political leadership that is holding these major platforms to account. There are reforms and things that can be done on that level. But with ByteDance and TikTok this is a unique circumstance because of the Chinese ownership and the Chinese control and the manipulation that exists uniquely on this app. Mr. Jekielek: There were these instructional videos on TikTok from Antifa and BLM about how to stage a riot. There is a significant part of this very far-Left protest movement which you document in your book that is closely tied to the CCP. Many people don’t understand this and deny the connection. Could you detail for us how that works? Mr. Schweizer: That was probably one of the most surprising findings in the book. China’s strategic thought here is captured in the phrase, “Watch the fire burn from across the river.” In other words, maybe you fan the flames of the fire, but you sort of detach yourself and say we’re not involved in that. The fact of the matter is that a lot of the radical protests that we’ve seen in the United States dating back even before 2020 is the work of two very radical groups. One is called FRSO [Freedom Road Socialist Organization]. The other one is called PSL [Party for Socialism and Liberation]. These are two organizations that have explicitly pledged their allegiance to the CCP. They view them as fraternal parties. That’s not just friends, that’s fraternal parties. They cheer on the CCP and are supportive of the CCP. We know that some of the leaders in these groups have traveled to China. We also know that some of these groups get money from China, sometimes directly, and sometimes indirectly. We also know that Beijing tracks these groups. I actually quote from a CCP party organization in Wuhan that tracks the activities of these groups domestically in the United States. They see that these groups have been very successful in radicalizing the conversation in America. Many of the most violent radical protests in 2020 were organized by FRSO and PSL. You might have had people that showed up that wanted to peacefully protest about race relations in America. Maybe they wanted the police to try to handle situations slightly differently. But these organizations were all about all American cops being racist and needing to abolish the police. They shut down cities like Philadelphia, but they also showed up in small towns in America. They were very radical groups. According to reports in China, FRSO essentially captured and took over by the late summer of 2020, the Black Lives Matter movement and and ended up radicalizing it. That’s an important component of this. Because if the work that China is doing with TikTok in cyberspace represents the air war, this represents the ground war, the radical, boots-on-the-ground social protests in America. Those protests have continued. They’re now under a different label. They are now pro-Hamas or pro-Palestinian rights protests. If you look at a lot of the organizers, they are FRSO and PSL, these pro-China groups. When there was a large protest on this topic in November of last year, look at who the keynote speakers were. They were leaders from FRSO and PSL. There were more than half-a-million protesters that shut down Washington, D.C. The goal here is to radicalize this movement. They don’t want peace in the Middle East, they want a Hamas victory. You can look at the emergence of the so-called trans movement. It is very surprising here, because two of the biggest funders of that movement in America are Chinese-based billionaires. One is an American who sold his company to an investment fund partly owned by a Chinese sovereign wealth fund. He moved to China and he’s pro-CCP. He has poured tens-of-millions of dollars into the radical protest movement, including the trans movement in America. Joe Tsai, the co-founder and now the chairman of Alibaba, has poured tens-of-millions of dollars into the trans movement in America. A big tip off is that neither of these individuals are actually supporting this movement in China itself, they only advocate it for it in America, because they know it’s divisive. They know that it sows division and distrust in America, and that is part of the social agenda they are trying to push in the United States. Mr. Jekielek: The first billionaire that you’re referring to is Roy Singham who funds Code Pink. I’ve seen Code Pink coming to the Select Committee on the CCP events in Congress to protest, and then they leave very quickly. Mr. Schweizer: Yes, that’s exactly right. In fact, Code Pink and Roy Singham fought aggressively to try to prevent that committee from even being formed. They didn’t want a select, bipartisan committee in Congress to look into what China was doing. Roy Singham has absolutely played a major role in that, as has Code Pink. Again, these are not people who are normal, regular peace activists. These are not people who want a negotiated solution. They believe that the entire error is with the United States, as opposed to China, in the tensions between those countries. And they believe that the tensions between Hamas and Israel are totally the result of what Israel has done. This is part of the effort to radicalize and divide and sow social division in America. One Chinese official said, “This internal tumult in America is sapping America of its strength.” This is part of a broader strategy, in addition to many of the other things we’ve talked about. Mr. Jekielek: You cover that very well in, “Blood Money.” I wholeheartedly recommend this book to all our viewers. It is meticulously researched and a great compilation of all of the different methods that the Chinese regime has been using. Thank you for your book. Any final thoughts, Peter, as we finish up? Mr. Schweizer: This is such an important topic. You and The Epoch Times have been at the forefront of this. I’m encouraged that people are becoming more attentive to these details. But the problem is that the clock is ticking. China’s strategy is working. It’s causing American casualties. This is not an abstract future war. It is a war occurring right now. I encourage everybody to be vigilant and let your elected officials know what’s going on so they can take this seriously and confront it. Mr. Jekielek: Peter, I have one more question. I recently saw in Politico this idea that the CCP is trying to help former President Trump get reelected. How do you react to that? Mr. Schweizer: I don’t find that very credible and that’s an example of disinformation. Look, the bottom line is that Joe Biden has essentially given the CCP everything that they want. It’s not to say that Trump was perfect in his approach towards China, but there were so many things that he did that were disruptive to their efforts. He was able to vocalize what a lot of people feel about the threat. I don’t give that idea any credence whatsoever. All you have to do is look at the results of what the policy prescriptions that Joe Biden has given them—he’s given them what they want. He’s given them big help with a little bad mouth. Donald Trump has certainly challenged them,in very important and significant ways. Mr. Jekielek: Trump made the first real challenge to this engagement with China philosophy of the Kissinger school that has dominated the whole U.S. establishment for decades now. Mr. Schweizer: Yes, that’s right. Now, it is the minority view. Trump’s election and his administration’s policies on that front have really changed. The conversation. The statements of Graham Allison or the worldview of Henry Kissinger are no longer the consensus view among the American general population. However, it is among American elites, because they profit from that kind of arrangement. But with the broader public, there is a lot more skepticism about the CCP. That is a good and healthy thing. Mr. Jekielek: Peter Schweizer, it’s such a pleasure to have you on the show. Mr. Schweizer: Thanks so much for having me. I really enjoyed the conversation. Mr. Jekielek: Thank you all for joining Peter Schweizer and me on this episode of American Thought Leaders. I’m your host, Jan Jekielek. This interview was edited for clarity and brevity.

Dr. Marty Makary is a surgeon, professor at Johns Hopkins University, and author of “ Blind Spots : What Medicine Gets Wrong, and What It Means for Our Health.” “We’ve got to recognize now the best practices are exactly opposite of what the medical establishment pounded into pediatricians for 15 years,” he says. In this episode, we explore the culture of medical groupthink and cases where health recommendations have produced disastrous results, looking at diabetes, peanut allergies, opioids, C-sections, and the low-fat diet. “The medical establishment created a dogma in 1955 that fat was bad for your health. It was based on one guy: Dr. Ancel Keys,” says Dr. Makary. How can America reverse the trend of chronic disease and poor metabolic health? Is there any hope? Watch the video: “The foundation of the medical profession is not to have a one-size-fits-all. It’s always to consider nuance and to consider scientific detail,” says Dr. Makary. Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times. RUSH TRANSCRIPT Jan Jekielek: Dr. Marty Makary, such a pleasure to have you on American Thought Leaders. Dr. Marty Makary: Good to be with you, Jan. Thank you. Mr. Jekielek: In your book,”Blindspots,” you make the case that groupthink is actually one of the biggest health issues that we have. Dr. Makary: Yes, groupthink is a huge problem. It creates bandwagon thinking and in the field of science it creates dogma that can take on a life of its own. And it turns out that dogma can do far more damage than some of the good that’s discovered in medical science. Mr. Jekielek: You come up with a huge number of examples, decades of bad policy developed out of erroneous findings. The common denominator is a groupthink and orthodoxy that develops afterwards. I'll just use one that still seems to be an issue—peanuts. Dr. Makary: You’re so right. When we as a medical profession use good scientific evidence to make health recommendations, we shine and we help a lot of people. But when we rule by opinion and issue these edicts based on the opinion of a small group of oligarchs in medicine, we have a terrible track record with health recommendations. And the peanut allergy epidemic today, by and large, was ignited by a bad recommendation about 24 years ago by the American Academy of Pediatrics creating an illusion of consensus. They put out a recommendation that all mothers and children zero through three years of age should avoid peanuts. All mothers who are lactating, all mothers who are pregnant, and children zero through three years of age should avoid peanuts altogether. Total peanut abstinence was their idea on how to prevent a peanut allergy from developing. Turns out they got it perfectly backwards. They forgot about a basic principle in science called immune tolerance. Mothers had known it as the dirt theory. When you’re around something in infancy, your immune system learns not to see it as foreign and you don’t become sensitized and allergic to it later on. Because of this catastrophic wrong recommendation by the American Academy of Pediatrics, putting out their gut feeling to avoid peanuts with no scientific evidence and putting it out with such absolutism that everybody needs to do this, we saw peanut allergies skyrocket. And as this happened with the new recommendation, they thought, well, we just got to get more compliance. We got to double down. If we’re going to beat this epidemic, we have to get more people to comply. Mothers that fed their infants a little bit of peanut butter to develop some immune tolerance to it were seen as anti-science and spreading misinformation and uneducated. Turns out they had a lot of wisdom. And a group of doctors who had disagreed with this big recommendation were basically sidelined, they were silenced. Ultimately the science caught up with this bad recommendation into a very severe peanut allergy epidemic where we now saw a new type of allergy common, a severe anaphylactic reaction. That is a kid is just near a peanut, they don’t even consume it. They’re near it. They can go into a life-threatening anaphylaxis. Finally, the study got done, a randomized controlled trial. They took 640 kids, randomized them to peanut abstinence in the first few years of life, or early exposure to peanut butter in the first several months of life. And there was a markedly radical difference in peanut allergy development later in life. And the scientists believe it’s the same for milk and eggs and many other things that should be introduced a little bit early in infancy. The study that was eventually published in the New England Journal was embarrassingly simple to do. They could have done it before they put out their recommendation with so much absolutism. And when you get it so perfectly wrong, where’s the humility to then issue a correction with the same vigor by which the initial recommendation was put out, really spreading misinformation? And this dogma still lives to this day. We still suffer from a terrible peanut allergy epidemic. Schools have now banned peanuts. For those sensitive, the less immune exposure infants got for the next generation. And we created this crazy self-licking ice cream cone, which perpetuated dogma and addressed it by more dogma. The science is now clear. The American public deserves an apology. And this is one little peek into a broader medical establishment that can put out things with such absolutism as if it’s based on scientific evidence when the reality is it was just an opinion. Mr. Jekielek: The solution right now is to expose kids in their infancy to peanuts. But we still have to watch out for the older people, some of whom have these anaphylactic reactions. Dr. Makary: Yes, kids have real peanut allergies, and they’re often downplayed, but they are real. I mean, people should not mock them, they shouldn’t ignore them. A kid can die from getting an ice cream serving from a scooper that was in a pistachio ice cream bin before they were served their non-nut-based ice cream. And so we’ve got to be sensitive, but we’ve got to recognize now the best practices are exactly opposite of what the medical establishment pounded into pediatricians for 15 years. The best practice is to introduce a little bit of peanut butter at four, five, six months of age when a child is an infant, and milk and eggs. And some pediatricians say it’s good for them to be around dogs and cats in the first year or two of life. A basic concept of immune tolerance was known at the time, but it was ignored by the hubris of the medical establishment. And it’s not just peanuts. Mr. Jekielek: Any item that you would expect someone to get regular exposure to like milk, eggs, and peanuts, you would want to give in small amounts early on to get the child ready for the future. Dr. Makary: Yeah, it’s best practice. It’s good parenting. And if you look back a generation or two, this is what grandparents were teaching for a long time. In their wisdom, they had known it’s good for a kid to be around some of these exposures safely. We don’t want kids to consume whole peanuts. It’s a choking risk. But do you know that they use peanuts in soups in Africa? And Africa has essentially no peanut allergies. The United States has the worst peanut allergy epidemic in the world. It is non-existent in Africa. I’ve got students from Africa who’ve described this to me when I did the research for the book, but they said the few people in Africa that have peanut allergies are American and UK expats who are living in Africa. They grew up with that incorrect dogma, the misinformation put out by the medical establishment, parroted by everyone, and as a result, the United States has the worst peanut allergy epidemic in the world. It’s expensive, a lot of emergency room visits, lives lost, tragically young, healthy kids otherwise and the expense of EpiPens in every school in America and these expensive treatments that are also very uncomfortable for kids. We just got a new drug approved for peanut allergies in the United States this year. The story of the American peanut allergy epidemic is really a broader story of the arrogance of a medical establishment saying things with such absolutism when the truth is that the right answer when people wanted to know what causes peanut allergies was, we don’t know. And you saw that during Covid and so many other different times in American modern history. The right answer from the medical establishment should have been, we don’t know. Mr. Jekielek: That’s just generally very hard for people to do, as we’ve been discovering and not just in the medical field. No one wants to see. If you’re an expert, you’re expected to give an answer. Dr. Makary: Yes, and I interviewed the people who made some of these recommendations for peanut avoidance, and I wanted to see if they had some humility, felt terrible about it and what their rationale was. And while some of them did feel bad, most of them were very arrogant about the recommendation and justified it. And one of them even basically told me, the public was asking us what causes peanut allergies and we felt like we had to tell them something about what to do. And my thought was, no, you don’t don’t you can say we don’t know that’s okay the public is very forgiving if you’re entirely honest if you’re making stuff up then they’re going perceive that you’re lying to them and that’s why we have this epidemic of distrust in the United States of the medical profession. Mr. Jekielek: Let’s talk about the psychology of the blind spot. Where does that come from? Dr. Makary: Yes, and it’s not just the peanut allergy dogma that we got wrong for 15 years in modern medicine. We got the low-fat diet wrong for 60 years. We got opioids or non-addictive wrong for 30 years igniting the opioid epidemic. We got hormone replacement therapy wrong for, we’re still getting it wrong for 22 years incorrectly telling women that it causes breast cancer resulting in needless suffering in the postmenopausal population so we again when we use opinion and just making a recommendation based on a gut feeling we don’t have a good track record we’ve got to get back to the scientific process. In order to do that, you’ve got to have impeccable objectivity. It’s not just in science, in business, in politics, in management, in relationships. You’ve got to be objective. You’ve got to have humility to recognize what you believe may be wrong. No one studied this more than Dr. Leon Festinger in the 1960s. He created the term cognitive dissonance based on the idea that you were dissident or uncomfortable. Dissonance essentially means discomfort. You had this internal conflict if there were two ideas that were in your brain competing for truth. If you had believed something because you had heard it prior, that belief then occupied your brain. And it was very happy because it had no competition from other ideas. But when a new idea comes along, it then challenges the idea that’s currently in your brain. And that conflict is very uncomfortable. People don’t like it. Human beings resolve that conflict in a very passive subconscious way by ignoring the new information, even if it’s logical, by reframing the new information to make it fit what you already believe, or reframing what you already believe to say, yeah, it’s basically the same thing. For example, if we say that smoking can kill you and you’re an avid smoker, you might say, well, that’s in people who smoke their whole life. I just smoke one or two cigarettes a day, and I’ve only done it for 10 years. You try to reconcile two opposing ideas in your mind by reframing them. And we do this all the time in society. You see it in politics. In medicine, we tend to have these belief systems and we get afraid to challenge them. But the purpose of science is to challenge deeply held assumptions in the field. And in the field of psychology, they’ve described this dissonance by doing some experiments. Dr. Festinger and his colleagues took college kids, and had them do a very tedious task of putting pegs in a board. It was an hour-long task. It was designed to be boring and not fun and a bit of a disappointment. And they paid people to do this. The students were paid either twenty dollars or one dollar and then they asked them, did you enjoy the task? And guess who enjoyed it more? The students who were paid one dollar because they had to justify that they did this incredibly boring task somehow. So the way to reframe this experience was to say, well it must have been enjoyable because it wasn’t that lucrative. In order to justify what I did by saying I believe that I want to do this, you have to make it enjoyable in your brain. And another experiment by Aronson and Mills, they did this famous experiment where they said that there was a sex talk to attract students to come listen to. You had to take an entrance exam. And they were divided into three groups randomly. They didn’t know what the other person had as a requirement. One group had a very hard exam. Another group had an easy exam. And the other group had no exam. Then they gave them the sex talk and made it as much of a disappointment as you could possibly design. They basically said, like, bees get together and multiply. And then they asked the students, did you enjoy the talk? And guess which students enjoyed it the most? The one who had the hardest entrance exam, because they had to justify that effort, what psychologists call effort justification, having done that difficult exam. And that’s why they claimed that the exact same experience their colleagues had was more enjoyable to them because they had taken the exam. This theory of cognitive dissonance, or sometimes what’s known as the founder’s effect, you believe what you hear first, not what’s most logical, it was very sort of accepted in a theoretical realm, but it had no real world data. Festinger was sitting home one day and read in the newspaper that a cult was organizing to meet because they believed that they were going to be picked up by aliens in a spaceship on a particular day and time and location, and so he went and traveled to this Illinois-based cult and embedded himself in the cult. If his theory of cognitive dissidence and the founder’s effect were true, when the spaceship did not come, they wouldn’t abandon their views. They would dig in even deeper because they had to stick with their belief system and new information had to be reframed or ignored or somehow changed. And sure enough, that’s exactly what happened. Somebody claimed that the clocks were wrong and maybe the aliens were still going to come and everyone got excited. they would sort of justify why the aliens were late and the prophecy was still true throughout the entire evening. And by the morning, they had claimed that they got a revelation that because there was a lot of light shining from the cult, the aliens had changed their mind. You would think that this would result in people abandoning their belief system, but they didn’t. They became more evangelical and more deeply rooted. And one member of the cult who was a doctor said in very plain English directly to Festinger, I can’t abandon this belief system. I have everything in it. My life, my family, my job, my career, everything is invested in this belief system. I can’t possibly give up on it now. tendency to want to cling to our belief system, not because it’s more logical or correct, but because we held that view first. I see it almost every day now that I’m aware of it from doing this research for the book. And what I notice is that on my research team at Johns Hopkins, people will suggest research ideas, and I'll tend to dismiss it a little more readily than I should. And I realize this is the founder’s effect, and I’ve got to be aware of it. Now, the father of modern medicine, Claude Bernard, said, we have to recognize that we all have biases. It’s part of the human condition. But you have to be aware of your bias. And when you receive new information, as in the scientific process, You have to actively and temporarily suspend your biases, being aware that they’re there, and try to objectively assess new information as an active process. And there’s probably no other more prophetic words from the modern era of hyperpolarization and deeply entrenched views than the words of Claude Bernard, and even specifically to the medical science community itself. Mr. Jekielek: There was the person who originated the ice pick lobotomy, which turned out to be a very bad procedure and it wasn’t really helping people. Later on, this person revisited some of his patients and his level of this cognitive dissonance was so strong that he couldn’t see the damage that had been done. He recorded his experiences with them and he believed that they had been helped. Are you familiar with this story? Dr. Makary: Yes. A lot of damage was done. It was again medical dogma and people held on to it. And it’s not that doctors are bad people or diabolical. Every doctor I know is trying to do the right thing or always tries to. But we have good people working in a bad system. And this groupthink mentality creates a herd mentality where people are not encouraged to think independently. There’s a culture of obedience to get in line. Well, every major scientific discovery has come from somebody challenging a deeply held assumption, challenging a dogma of the day. But you see this cognitive dissonance play out. I had a colleague who, when a study came out showing that you don’t need to treat appendicitis with surgery 100 percent of the time, two-thirds of the time you can manage the person without surgery. You follow them closely, give them a short course of antibiotics, and you don’t need to do surgery. It’s an amazing discovery. And there was a great study done that shows, not only are you avoiding the pain and suffering and the complications, but the cost. We have a nursing staffing crisis in the United States. That helps, it decongests our operating rooms, it enables us to focus on other sick patients. It’s an incredible research study. When it came out, I remember asking a colleague and he said, well, I don’t buy it. I need to see two randomized control trials. Then a second randomized control trial came out and he said, well, I need to see three randomized control trials. And a third one came out. There was incredible data and long-term follow-up in top medical journals. And then I went back and showed him the third trial and he said, well, you know, I just still think it’s just better to take them all out. You see this cognitive dissonance playing out right in front of my eyes. Mr. Jekielek: If doctors have a method that works and you have this new method that’s coming out, I can see being a little skeptical. Dr. Makary: Yeah, you’ve got an intervention that works, just stick to it. So the studies were very clear. You don’t get behind the eight ball where somebody gets sicker and then they have a higher risk long term. You follow them for the first 24 hours, and oftentimes these are cases of mild appendicitis where there’s no rupture, that’s the inclusion criteria, and you see them start to improve. And we’ve seen this all the time in my career. We’ve been called to see someone with appendicitis and they’re already getting a little better by the time we see them. So this protocol says keep going as long as they’re improving. You may never need to do surgery on someone and when they follow them properly in a big study they find that two-thirds of people end up never needing surgery, especially kids. Now, there’s exceptions, of course, but this is a revolutionary study, and it’s just in one little pocket of medicine. Mr. Jekielek: There is a story about a child in communist Poland that had serious acute pain and needed an operation. At the hospital where she was taken, an unusual number of children were dying, and the cause wasn’t clear. This one doctor came up with a theory that the anesthesia was killing them. But the idea that you have to do the anesthesia was so entrenched that this continued. This was the first child that got operated on without anesthetic, which of course was very tough for her. But in the end, she lived. It turned out some days later, they figured out that indeed it was the anesthesia that was defective. But they were very committed to using it, even though someone was saying, “Wait a second, it might be the anesthetic. We need to check this.” Dr. Makary: I wrote the book,”Blind Spots,” essentially as a guide to impeccable objectivity where we have to recognize these biases, suspend them, and consider new information recognizing we have this cognitive dissonance. And it turns out that we all know people like this. I have a mentor at the hospital who when everyone piles on to some athlete who’s accused of some allegation he'll say wait a minute we don’t have all the information. And then the room will be silent. And you grow to admire that characteristic of people who don’t rush to judgment. They don’t fall in line with a narrative where they’re told you have to have all these positions on one side or the other on unrelated topics. They think independently. And so that’s a beautiful thing and it’s what we badly need in the United States today. Civil discourse is under threat. And in the medical profession too, we’re fighting censorship, control, and centralized authority. We got a little peak of it during COVID, but this is an ongoing battle. Ultimately, I do still believe in the independence and creativity of America’s rank-and-file physicians who think for themselves and don’t like to be told from a central authority what they must do. They like to be told what the opinions are of experts. The whole purpose of science is to have a foundation of transparency where we can discuss ideas. And the medical profession has an incredible heritage of tailoring recommendations to an individual based on their needs and wishes and personal physiology and so we’ve got to retain this liberty to customize care to individuals. The foundation of the medical profession is not to have a one-size-fits-all, it’s always to consider nuance and to consider scientific detail. It’s an amazing profession and I love being a doc. It’s an incredible privilege to be able to enter into that relationship with somebody instantly because we embody an ancient trust that’s been passed on through generations where we value individuals, we treat people fairly, we assume the best in folks, and we customize what we think is best for them in a recommendation, not in forcing, but in a recommendation. That is our great heritage. America’s first hospital was founded as a safe haven in Philadelphia for the sick and injured, regardless of their race, what they believe, or their ability to pay. That is our great medical heritage. And right now we’re seeing price gouging, predatory billing, distrust, public health officials having lied to the public over and over again. We’ve got to rebuild the trust because medicine is an incredible heritage that we’ve got to keep upholding in every way that we can. Mr. Jekielek: People are taught that egg yolks can be a problem and you can have heart problems later in life. People also enjoy various types of fat in food, but they are taught that the low-fat diet is literally what you need. But it turns out that that’s not the case either. Dr. Makary: Fat has a lot of flavor, which is why people like it. The yolk has that flavor, which is why people, chefs, use it in cooking certain types of foods. And that is natural. OK, healthy, natural fats, saturated fats, we’re not talking about the highly processed fats. Natural fats have an incredible health benefit. It’s part of a healthy diet. It has substances that are filled with micronutrients, healthy eggs raised in a healthy way from healthy chickens. But the medical establishment created a dogma in 1955 that fat was bad for your health. It was based on one guy, Dr. Ancel Keys, who after Eisenhower had his heart attack, got out there and basically said that’s because he ate too much fat. And the fat builds up in your coronary arteries and therefore they put him on a low-fat diet. Ancel Keys convinced Dr. Dudley, the president’s doctor from Harvard, to reduce the president’s fat intake, and put him on this low cholesterol diet. The irony is dietary cholesterol is not even absorbed by the body. It goes through your system. 90 percent of it plus is not absorbed because it’s esterified. It’s attached to a bulky molecule, which means it does not get absorbed. So the irony is they moved the country, and still to this day you see low cholesterol foods all over the place, promoted sometimes by the medical establishment. They got it perfectly backwards. There was never anything dangerous about eating some natural fats for the vast majority of people. But the medical establishment stuck on this idea that fat was the demon of public health, moved the food industry to a low-fat diet, and they started to study it with a major study called the Minnesota Heart Study in the 1960s. It was supposed to be the end-all study, a randomized trial that once and for all proved that people who have a low-fat diet live longer and healthier. But what happened was they got the opposite result. People that went on the low-fat diet had more heart attack deaths. So they suppressed the study for 16 years after the results were available. It was not published. When one of the main authors was asked before he had died, why didn’t you publish the study? He said, well, we just didn’t get the results we expected. We were disappointed in the results. Then they did another major study, the Women’s Health Initiative study, the Framingham study. These are studies with tens of thousands of people, gigantic federally funded studies. They looked for an association between eating natural saturated fats and heart attacks and they did not find it. Three major studies failed to find this association that they claimed existed. But rather than apologize and show some humility, they dug in. And I interviewed one of the people who was involved in the government’s food pyramid guidance and I said, are there studies that support the low-fat recommendation? She couldn’t point to a single study. I then asked, how then do you put this out with so much absolutism? And she says, well, Marty, are you questioning the low-fat diet? She says, do you mean to tell me that the American Heart Association is wrong and the American Cardiology Group is wrong and the Surgeon General is wrong and all these famous scientists are wrong? She says, I don’t think so. In other words, everyone believes the dogma, therefore it is scientific evidence. No, that’s an illusion of consensus. They got it perfectly backwards. We now recognize its refined carbohydrates, the simple sugars, the ones added, not bound to fiber and natural fruits, and the ultra processed foods that may be driving the inflammation that enables these certain particular lipoproteins to get deposited. And the blood tests we’ve been recommending are not even very precise. When we check people’s cholesterol in the hospital, people should be getting a lipoprotein A and an ApoB level. Those are far more better predictive tests that predict early heart disease than the standard testing. So next time someone gets a blood test, ask to have those tests added and make sure your doctor can interpret the results. About 10 percent of doctors now are ordering those tests. We live in this sort of very slow culture in medicine where dogma looms large and we have an epidemic of misinformation. And one of the greatest propagators of misinformation, it turns out, is the United States government, with the corrupted food pyramid, and with the peanut allergy recommendation that they got backwards, with the opioid guidance they got backwards. Many times you see this common thread. Everyone believes it must be true because these notable institutions, big academic centers, NIH, and industry-funded researchers are all saying it’s true, and therefore people just go along with it. This was probably the number one health recommendation given to patients for 60 years. People come into the office. If you smoked, we said stop smoking. But separate from that, we would basically say eat healthy, and we would define eating healthy as avoiding fat. My uncle had eggs every morning his whole life back in Egypt. When he immigrated to the United States, his American doctor said, stop eating eggs and it was miserable. This was part of his livelihood. He had a routine every day. And for about 30 years, he had to avoid eggs and lived with this guilt complex till finally his son, who had done the research and is a physician, said, no, Papa, there’s nothing wrong with eating a couple eggs every morning. And he is back at age 92, eating eggs every morning after he comes back from the pool. And he has a routine and he lives healthy and happy. Mr. Jekielek: There’s a cost to this. There are these very sweet soda drinks which are a very real driver of obesity. Dr. Makary: Yeah, look, the low-fat diet, which means they had to add refined carbohydrates to maintain taste. So now you had low-fat cookies and low-fat snack wells and low-fat food items where it was pounded with sugar. In schools, we would give kids milk where they take out the one healthy ingredient, natural fat. There’s also protein, which is good for you. And they would add sugar. So now you’re drinking like sugar water, practically. Removing the fat and adding sugar. It’s in everything. It’s in tomato sauce. It’s in all kinds of foods. Just read these labels. For a long time, we didn’t even have sugar on the nutrition labels because the industry drove the experts and funded the experts to downplay sugar and to not talk about it as if you could have an unlimited amount. So if there’s one general health recommendation I like to give my patients that are struggling with their weight, it’s to drink water. There’s so much added sugar in what people drink that you can look for it in everything you eat, but the drinks sometimes are loaded with sugars in ways that you can modify your life. Mr. Jekielek: A very high sugar diet, that’s also connected to type 2 diabetes, is that right? Dr. Makary: Yeah, we have an epidemic of type 2 diabetes. The pancreas was never meant to be pounded with sugar and surge your insulin levels as we’ve seen in the modern era. For most of human history, insulin produced by the pancreas happened at low levels that were undulating. But in the modern era, the insulin levels are spiking, constantly pounded with high amounts of added sugar. So it’s no wonder that we’re seeing this epidemic of insulin resistance, which is bad metabolic health. You know, in medicine, we have all these silos. We have 82 specialties. You finish medical school and they’re like, which specialty are you going to pick? You have to pick one. And this is our currency of academics. If you have this tiny little focus, you just only work on the choroid of the eye, which is one little part of the eye. This guy is a genius. He celebrated. And that’s how we advance our science in our minds. Now we need subspecialists. I’m one of them. But everything is connected. Mitochondrial health, general body inflammation affects every cell in the body. Every cell in the body practically has estrogen receptors. There’s a hormonal connection. There’s a general way in which every cell in the body needs certain micronutrients which are not found in the modern food supply because food is made with basically modern-day caffeine. It’s not from good, rich soil. And so I don’t even know what we’re eating sometimes. It’s like a piece of plastic or cardboard with sugar and it looks nice, but our food supply is not what it was. You know, it turns out that the African-American community in the United States was one of the healthiest communities in the 1950s and 60s in terms of their metabolic health. What you saw are these food deserts, foods poor in micronutrients, potato chips and other foods becoming popular in these areas where there wasn’t good education, there wasn’t good access to healthy foods. The government put out misinformation on what people should be eating. And now you have this total reversal where the African-American community has epidemic levels disproportionately higher than other communities of poor metabolic health. You should ask, should we just be beating people up, making them feel guilty, or should we actually look at the information we’ve been giving people and the access to the food and what types of food we’ve been giving people? Maybe we need to treat more obesity in young people by talking about school lunch programs, not just putting every kid on Ozempic. Maybe we need to talk about treating more high blood pressure by addressing sleep quality and stress management, not just putting everybody on an antihypertensive. Maybe we need to treat more loneliness by addressing communities, not just putting everybody on an antidepressant. Maybe we need to study food as medicine and look at the environmental exposures that cause cancer, not just the chemotherapy to treat it. We’ve got to look at general body inflammation as an incredible phenomena that affects all of human health that is modifiable by our activities and our actions and our exposures. We’ve got to look at toxins. So we can keep going down this whack-a-mole healthcare system of just beating disease in the last final stages with medications. We’ve got the most medicated generation in the history of the world. Or we can actually look at the root causes and address healthy food, healthy living, mitochondrial health, nutrients, behaviors, choices, and give people the right information instead of the disinformation they’ve been given. Mr. Jekielek: A number of studies right now suggest that a lot of these antidepressant drugs don’t actually work particularly well. Is this right? Dr. Makary: We don’t even know the mechanism by which some of these drugs are actually helping some people. And because they help some people doesn’t mean everybody needs to go on it. We are converting America’s children into a generation of patients. We’re going to have every six-year-old in America on three medications soon. And in some cases it’s the medicalization of ordinary life. If you’re nervous before an exam as a kid, you’re nervous before an exam. Why do we tell the kid you have anxiety assigning a chronic disease to a child? Some of this stuff is the healthy normal development of children. And we do this in so many ways. We do it when they have the normal confusion around their identity. We do it when they’re down and out. Now there are extremes where people need focused attention and medication. I believe that. But when you talk to the real experts, not the people who are just giving out pills like a pill mill, but the people who really know this They will tell you that in many cases we’re engaging in the medicalization of ordinary life. We’ve seen it in childbirth and the treatment of children. For centuries, when children were born, they were given in the arms of their mother and held for hours. It was a natural incubator. They stay warm, sending healthy fetal hemoglobin and oxygen and stem cells and nutrients and antibodies to the baby after the baby is born for a minute or two during that transition. But something happened in the 1940s. We had the mass production of an antibiotic called penicillin. For the first time in history, doctors now controlled a substance that could cure you. There’s probably no greater discovery in the history of modern medicine than that of antibiotics. It’s converted childbirth to a safe procedure. It has enabled us to do surgery. And now people who are young don’t die from a small cut that gets infected or a minor ear infection. Antibiotics are a miracle, discovered in 1922 by Alexander Fleming. Within a few decades, doctors, it was being mass-produced and doctors controlled the ability to prescribe an antibiotic. It ushered in the white coat era of medicine. Doctors now had an unquestioned authority. Technology was booming in hospitals. They had iron lung machines for polio victims. They had incubators for babies and the culture of paternalism began to dominate. Babies were separated immediately from birth from their mothers and kept in the hospital routinely in the 50s and 60s for 10 days even though there was nothing wrong with the baby. Every baby was detained for 10 days. It drifted down to about three days by the 1970s but doctors would probe and pry and and feed their infant formula to the baby with the sort of paternalism that, well, this is controlled. This is better. This is under our care as doctors. No. The best thing for a baby in nearly all circumstances is to be held by the mother upon birth, to not immediately cut the umbilical cord, which is pulsating warm blood. I remember as a medical student, they immediately cut the cord. I was assigned to cut the cord, I'd have the scissors, you know, there it is, cut it! They whisk the baby off to this incubator in the back and I’m like, what are we doing? Is there anything wrong with the baby? No, we just have to, this is our routine, we have to rewarm the baby. And they go back and put the baby under some french fry light and they’re poking and prodding and putting a temperature probe in the baby’s rectum and the baby’s crying. I don’t know what’s going on. I just assume I’m a medical student. I don’t understand. Turns out this is the medicalization of ordinary life. That baby should have been rewarmed in the arms of the mother safely with some coaching or help because a mother is often exhausted. Skin to skin for hours. And now they’ve done research studies that babies held skin to skin for hours upon birth have more normal heart rates, blood pressure, less NICU utilization, neonatal ICU utilization. And when the cord is cut in a delayed fashion, so it can continue to pulsate for the first few minutes, babies have different myelination of the brain when studied on MRI. And so something magical is happening with that bonding. And when you take a step back at our modern-day medical culture of doing things, sometimes with this strong threat of paternalism, what we’re discovering in our medical research now is that we had things correct in ancient times. Almost the biblical principles of eating whole foods, things grown in good soil, eating clean meats, meditating, fasting. It’s as if we’re discovering this for the first time. These are basic principles that many people had wisdom on for a long time. You know, a couple of quick thoughts. Mr. Jekielek: One of them is you mentioned this, you know, the advent of antibiotics and that it was a miracle and it enabled all sorts of, you know, medicine, frankly. But one of the consequences,this is another thing you cover. And actually, you know, one thing that I really like about your books, not just this one, is you go to the people who are at the source of these things and you have these conversations, as we’ve been discussing, not just the people who might be at fault, but the people who are doing really interesting work that might point in another direction and see how they think. We have one example where I think the original researcher, what is it, on the peanut study, he said, no, I didn’t want anyone to come to that conclusion from my study. That’s totally the wrong thing. Dr. Makary: Yes, Gideon Lack. Mr. Jekielek: You get it from the horse’s mouth, which I really appreciate. Taking too many antibiotics would destroy your gut fauna, and that would give you severe problems. You can’t just take them like candy. This is going to have a profound impact on your body. Please tell us about that. What do we know today? Dr. Makary: Yes. Antibiotics save lives, but they also carpet bomb the microbiome. The microbiome, by way of background, is the garden of billions of different bacteria, not cumulative, but different bacteria that live in harmony in the gut. And they line the gut from mouth to rectum, and what they do is they’re involved in digesting food, they’re involved in transport of micronutrients, they produce some vitamins. They are training the immune system in ways that we have yet to fully understand. They produce serotonin, which is involved in mood. They are involved in estrogen regulation. They do so much that we have yet to fully understand. There’s been a discovery that some bacteria produce GLP-1, the active ingredient in Ozempic at low levels. So there’s this incredible organ system called the microbiome that lines the gut. And when people take an antibiotic unnecessarily, which is the majority of antibiotics used in the outpatient setting, they are carpet bombing their microbiome. They’re killing a bunch of bacteria and you get overgrowth by other bacteria. And sometimes the bacteria overgrowing are the more resistant, antibiotic resistant bacteria. They’re not good bacteria. They can be more pro-inflammatory, increasing your body’s general inflammatory state. And sometimes they can even kill you. A bacteria called C. diff is known to overgrow and we see it in the hospital all the time at almost any time. There’s at least somebody in the hospital with an active C. diff infection from their own gut. What happens is they take a little antibiotic for something and then the C. diff bacteria overgrow and it has been known to kill people. There’s been about 30,000 deaths a year in the United States just from C. diff bacteria overgrowing. So people need to know when they’re taking a little antibiotic, hey, you know, probably won’t help you, you got a little viral infection, but you know, you can take it anyway, it won’t hurt you. That is misinformation. There’s incredible research that I discovered in the book “Blind Spots” on the microbiome. It turns out that a study at a Mayo Clinic just came out that I think is one of the most significant studies in the last 10 years. It was ignored. It lives in this blind spot of modern medicine where they looked at kids who had taken an antibiotic in the first couple years of life and compared them to matched children who did not take an antibiotic in the first few years of life. Now we know in the first few years of life, your microbiome is being formed. This was done by the Mayo Clinic, published in the Mayo Clinic Proceedings, which is a little clue in our research world that no other medical journal was interested in this study. It was amazing. They found kids who took an antibiotic in the first couple years of life had higher rates of obesity, asthma, chronic diseases, learning disabilities, and attention deficit disorder. Again, remember that connection between gut bacteria and the brain through serotonin. Celiac was nearly 300 percent more common. Now, a good objective scientist would say, we don’t know if there’s a cause and effect there. It’s hard to say. Mr. Jekielek: But here’s the kicker. The more courses of antibiotics a child took, the greater the risk of obesity and asthma and learning disabilities, which is one of the things that indicate possible causality. Dr. Makary: That’s right. It’s a dose-dependent relationship. And farmers have been noticing this for a long time. If they give antibiotics to animals, they’re fatter. And so the world expert in the microbiome who I interviewed for the book said, hey, if antibiotics are making animals fatter, what are they doing to humans? And sure enough, in model after model of the microbiome, he identified how taking antibiotics alters the microbiome. Certain antibiotics do it more than others, and people are more likely to be obese. We have people who do everything to lose weight. they eat right, they exercise like crazy, they can’t lose weight. What’s going on? Maybe their microbiome has been altered. Maybe some of it can’t just be altered back by taking a probiotic that goes through your system. Maybe other probiotics could help. There’s an ongoing study at Sheppherd Pratt Hospital giving probiotics to people with bipolar disorder to see if it helps. They’ve tried now to do what they call bacterial therapy, which is essentially giving a pill of bacteria that normally live in the microbiome to people who are obese to see if they would then lose weight. There was a study out of Harvard that did not show that it did result in weight loss, but they’re trying again to change the bacteria. There’s this exploding research on this organ system called the microbiome that has lived in a blind spot of modern medicine. And it’s not just antibiotics that alter it. It’s altered processed foods, refined carbohydrates, things we don’t even know about that are altering the microbiome. We put fluoride in the drinking water in the United States. It’s only a third of the drinking water in Canada and 3 percent of the drinking water in Europe. But most of the drinking water in the United States has fluoride. Why? Because we think it kills bacteria in the mouth and reduces cavities. Well, if it kills bacteria in the mouth and reduces cavities. Well, if it kills bacteria in the mouth, what’s it doing to the bacteria in the microbiome? And we’ve seen all these chronic diseases go up in the modern era of antibiotics, C-sections, ultra-processed foods. I don’t know if fluoride is a part of that, but these are the questions we have to ask if we’re going to challenge the deeply held assumptions in medicine if you’re born by vaginal delivery. Remember, the gut is sterile in the body. When you’re in utero as a baby in the mother’s womb, there’s no bacteria in the baby’s gut. You get the bacteria in the microbiome when you pass through the birth canal, and the baby’s gut is then seeded with bacteria from the vaginal canal, augmented with bacteria from breast milk in the colostrum, and touching, and the skin, and grandparents kissing the baby. That’s normally how a microbiome forms. But when you’re born by C-section, a baby is extracted out of a sterile operating field, and what may seed the baby’s microbiome is the bacteria that live in the hospital, and those are not good bacteria many times. So we’re altering the microbiome in ways that we don’t understand. We have dogma that C-sections have no downsides, that it’s the same as a vaginal delivery. We have people choosing them just not because they need them for safety, but just because they want to make it easy or the doctor wants to make it easy for the doctor. C-sections save lives and they’re necessary sometimes. Antibiotics save lives in their necessary times. But they’re both massively overused in the modern medical establishment and they are altering the microbiome in ways that we need to study. Early research is telling us there’s an association there. It may be tied to chronic diseases and there may be other actions that we can take now once it’s formed through food and what we ingest to try to restore that microbiome. Mr. Jekielek: There was a study that showed that the prevalence of C-sections varies significantly by hospital. The hospitals themselves are the biggest factor. If a hospital has a protocol that’s how it’s done, that hospitals will do it much more often than others. Dr. Makary: Yes. My research team at Johns Hopkins has put out some information on that actually. So we have a consortium that does individual physician profiling on their appropriateness of care. Not their complication rate, but the appropriateness of care. And choosing to do back surgery, and prescribing opioids, and ordering CAT scans and MRIs. Are they inappropriately extreme outliers in ways that a consensus of doctors would say, that’s an indefensibly high rate of doing something. And with C-sections, we have a metric called your C-section rate as an individual doctor in low-risk deliveries. So we exclude all the high-risk stuff. And in those low-risk deliveries, if your C-section rate is over 25 or 30 percent, that’s a flag. Why are there doctors practicing today with C-section rates of 70 to 80 percent in low risk deliveries. So this is where it’s good for the consumer to be informed. It’s why I write my books and I want people to know. Mr. Jekielek: What about approaches to correct some of this? How to tackle this groupthink in a meaningful way to have a healthier, happier society? There is a crisis of over-medicalization. Dr. Makary: Well, it’s good for people to be educated, and I don’t want folks to be cynical about their doctors, but they should be educated, the general public should be educated on how medical groups think affects the culture of medicine in the absence of evidence. When there’s no evidence, it’s okay to have an opinion, but it should be put out there as an opinion, not as scientific evidence where you must comply with incredible absolutism. And I think as a profession, we need to fight bad ideas about health with more ideas. And that civil discourse has a way of, over time, being fueled by research and data and clinical wisdom where we learn what the truth is. So the one flag that somebody should have is that if someone says you should do something simply because I’m the expert, that’s when you probably should be skeptical. When it comes to decision making, there are emergencies where I think you should just follow whatever the medical guidance is. And when you have a choice and there’s nothing urgent and you can consider alternatives, it’s good to ask about all those alternatives. I’ve got two types of patients that come to see me. One that, when I start explaining things, they cut me off and say, no, doc, you just tell me whatever to do and I'll do it. And then I have a type of patient that says thank you for your thoughts. Now I have some questions and I did some research, and can we discuss it? You want to find somebody who has good listening skills, who can know their limits. What makes a good doctor is the humility of knowing when to call for help or to go back and research something and come back to somebody. And when I see our medical culture in the medical establishment today, I think that the greatest value that we can give to the next generation of students and doctors is humility. Because it’s not the rote memorization that enables the medical community to be so good. It’s their ability to learn from the patient and to learn as we go. And I think it’s good for people to not become cynical or jaded or hysterical about some of the problems in modern medicine. We’ve got good people working in a bad system, and this is not a system we designed. It’s a system we inherited, and it has a medical culture. But at the same time, a generation of students and doctors are now rejecting the use of medical dogma and instead asking good questions and demonstrating that humility in their everyday practice. So I’m a big fan of the rank-and-file American doctor who considers the evidence, considers the recommendations, and considers the individual needs of a patient and puts it together with some good sound advice. So ultimately I’m optimistic about our healthcare system. I’m optimistic about the future of medicine because we are seeing now people reject the current model of seeing people in five and ten minute visits and then just billing and coding. Doctors are burning out, patients don’t like it, we’ve been doing this for a long time, eat better and exercise more, we give people the wrong information, come back in six months with these medications, they come back and we say you’re a bad, bad, non-compliant patient. Patients hate it, doctors hate it, burnout rates are high, a generation of doctors are saying, we’re not doing this. We’re starting over. We’re going to spend an hour, whatever time it takes. We’re going to talk about food and activity and evidence and wisdom and new stuff that we don’t understand. We’re going to be open-minded and we’re going to develop a relationship where we have good rapport. And so I am a big believer in this great heritage of the medical profession. And I hope we can see it continue to make improvements in the coming years. Mr. Jekielek: How do people find these doctors with this generation that you’re describing, a new or perhaps old attitude? Dr. Makary: Yes, they don’t have a real name or title or official boundary of the specialty. They are doctors with great listening skills and humility. There is a group of us that are interested in the redesign of medicine. We don’t know what to call it. Is it functional medicine? It includes that. Is it holistic medicine? Not officially, but it is holistic. Is it alternative? Not really, but it includes alternative ideas. And so this group of doctors now are emerging in direct primary care. That way, the employer is paying the bill and anyone can access it. Concierge medicine. We’re seeing new clinics emerge for Medicare beneficiaries that are at no cost to the beneficiary. I’ve written a lot about these clinics in the book, “The Price We Pay.” But there is this opportunity now to connect with this new generation of doctors who are thinking about the redesign of medicine instead of just being on the hamster wheel, which nobody’s enjoying at this point. Mr. Jekielek: Dr. Marty McCary, such a pleasure to have you on the show. Dr. Makary: Thanks so much, Jan. Great to be with you. This interview was edited for clarity and brevity.

EJ Antoni is an economist and fellow at the Heritage Foundation, whose research focuses on fiscal and monetary policy. In this episode, we break down the discrepancies between government data, media reporting, and today’s economic realities. “Essentially, a third of all the jobs we thought we had added over that year are gone. They never existed. It’s like taking four whole months of job creation and ripping them off the calendar,” says Antoni. Are the financial models no longer trustworthy? “We don’t see the numbers quite matching up to a lot of the government statistics,” says Antoni. “And we get into some very perverse situations where the [Bureau of Labor Statistics] actually counts something as an increase in quality when, in fact, it’s a decrease, and the consumer is paying more for it.” Antoni analyzes various indicators and inputs to determine what the real data reveals about the state of our economy. Watch the video: “Where I think this becomes scandalous is the fact that these statistical problems first became evident in the spring of 2022, so more than two years ago, and nothing has been done to correct them.” Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times. FULL TRANSCRIPT Jan Jekielek: EJ Antoni, such a pleasure to have you on American Thought Leaders. EJ Antoni: My pleasure. Thank you for having me. Mr. Jekielek: I’ve been watching your commentary on a whole series of economic numbers over the past months. This update to the jobs numbers was pretty stark. It changed our perception of whether or not we’re in a recession, which is pretty significant. Mr. Antoni: You’re referring to the annual benchmark, where the Bureau of Labor Statistics [BLS], part of the Labor Department, looks back over a 12-month period and they essentially re-evaluate job numbers. In this case, they realized that the job creation was overestimated by about 818,000 jobs, which is a lot. But on top of that, those 12 months were already revised down from their initial estimates. With these jobs numbers, every single month we get a report, and then the previous two months also get revised. You'll have an initial estimate, and then an initial revision, and then a final revision. Between all of those revisions, which were down, and this annual benchmark, which was a massive decrease, it was 1.2 million jobs. Essentially, a third of all the jobs we thought we had added over that year are gone. They never existed. It’s like taking four whole months of job creation and ripping them off the calendar. Yes, it’s a pretty big difference. It’s making us question, “Is the economy even really expanding at this point? Are we in a recession? Are we near or entering a recession? How on earth do we get here?” It’s worth looking back and asking, “Have we ever been here before?” There was only one time when we had a revision that was this big, and it was in the global financial crisis and the Great Recession. Back then the economy was deteriorating so quickly that BLS was having difficulty with their models in keeping up with the changes in the economy. Interestingly, something very similar is happening today, where the BLS essentially has assumptions that worked fine in 2019, and even to a certain extent in 2020, when the economy was reopening. There are assumptions based on the number of businesses that are being created, the number of firms that are going out of business, and how many people are being employed or losing their jobs in both of those cases. It turns out we have been grossly overestimating the number of businesses in the economy, and therefore overestimating how many jobs are being added by businesses that it turns out don’t even exist. Mr. Jekielek: There is some level of fraud around the business creation because of the trillions of dollars that were pushed out to support business during the pandemic. Mr. Antoni: Sure. Mr. Jekielek: Is that the reason? Was it because people created fake companies in order to access those funds? Mr. Antoni: That definitely seems to have played a part. It doesn’t account for everything, but it definitely seems to have played a part. For example, there were PPP [Payback Protection Program] loans, and there was plenty of fraud in the program. We’ve already discovered plenty of fraud, and there’s a lot more that hasn’t even been investigated yet. Given the fraud that we have already found, you can only assume how much more there is in the rest of the program. In that case, people were essentially creating businesses that never existed. They never employed anybody, but through fraud were able to get a check from the government. Fast forward to today, one of the things that’s interesting is that we are seeing a lot of firms go out of business and not get replaced at the rates they were before the pandemic. Looking at 2020, which is some of the data that the models are currently using, you had a lot of businesses who were just wiped out by the pandemic, but because there was so much government money available, they were able to restart their business. The problem today is that those businesses are gone because of inflation and high regulatory costs. Those businesses are no longer employing people and they’re not getting replaced. Vice President Harris, now the Democrat presidential candidate, has a plan to increase the number of new business applications for small businesses. Applications aren’t the problem and they are at a historic high. We’ve never had so many applications for small businesses today. The problem is that almost none of them can get off the ground. With those who do, disproportionate numbers of them are failing. Again, the reason is the high inflation, which has put their costs through the roof. Then you have a regulatory burden on top of that, which just makes it impossible for the small business to cut it today, especially against their big corporate counterparts. Mr. Jekielek: The regulatory burdens are quite different across different states, correct? Mr. Antoni: Absolutely. But there’s also a federal regulatory state, which further complicates things. This is actually becoming a huge problem now in finance. You have banking corporations like JP Morgan, Wells Fargo, and Bank of America who have one set of regulations at the federal level and another set at the state level. The problem is they can contradict each other sometimes. There will be disclosure laws where a state says, “We want to know what kind of ESG or DEI you’re using in making investment decisions for people’s portfolios. Then the federal regulators are saying, “You’re not allowed to disclose that.” You have issues like that where these firms are between a rock and a hard place, where they have a very liberal regulator at the federal level and a more conservative regulator at the state level who are literally giving them contradictory directives. You’re going to run afoul of those regulations one way or another. That’s strictly the finance realm. But you do have a tremendous regulatory burden just at the federal level, which adds tens of thousands of dollars to the cost of running a small business every single year. Mr. Jekielek: You mentioned inflation as being an important element here. Is this reflected in other sets of numbers that we’re looking at? You deal with a lot of different indicators in your commentary. Mr. Antoni: One of the biggest things is when we look at business sales and inventories, including retail sales, wholesale sales, and manufacturing sales, all of these different pieces of information we get from the Census Bureau, people look at these numbers and say, “My goodness, they’re going to the moon. The economy is doing great.” But none of them are adjusted for inflation. In other words, if I’m a retailer and I have a million dollars worth of inventory and we have very high inflation, next year when I add up my inventory, it’s still a million dollars, but there’s actually less physical stuff in that inventory. The issue is that each individual item in the inventory now is a higher price. When I add up all those prices it’s a million dollars, and each dollar is worth less than it was. We’re seeing that more and more throughout the economy. The problem is that people forget that these numbers are not adjusted for price changes. They’re adjusted for things like seasonality. If we go into October and retailers have a huge increase in inventory, that’s normal. That happens every year because they’re getting ready for the holiday sales season. Then what happens in January? Their inventory is empty. Why? Because they’re getting ready for all the returns that follow the holiday sales season, so we can adjust the numbers for that kind of seasonality. That’s no problem. The issue is that we don’t adjust them for prices. Unless you go in manually and do that after the fact, which is one of the things that I try to do on that news feed you were referencing. You will have no idea how much actual value is present in these inventories or in business sales. Mr. Jekielek: Because the value could be going down significantly if inflation is up, but you’re measuring it as if it’s the same or higher. Mr. Antoni: Yes, you get too focused looking at the dollars and not looking at the value. You’re missing the forest for the trees, as it were. Mr. Jekielek: What is the reality of inflation right now, according to your calculations? Mr. Antoni: We want to distinguish between these official numbers and the actual real-life data, and this is a broader discussion. But a lot of our official inflation metrics, things like the Consumer Price Index [CPI], which is also produced by the BLS, under normal circumstances, does a decent job of estimating inflation. It’s not great, but it does a decent job. The problem is we are not in normal times today. I can give you a few examples of that. The way they measure the cost of home ownership is odd. Ever since the early 1980s, they stopped looking at home prices and they stopped looking at interest rates. Then you may say, “Wait a second, those are the two biggest things that determine my monthly mortgage payment. How on earth are you going to determine the cost of home ownership then?” Essentially, they look at rents and they use rents as a proxy. They will go around and ask people who own their home, “If you were to rent out this home, how much do you think you could get for it?” They use that when they are creating a weighted average for determining the actual rent price for a home. But even then, when they get the change from month to month, or year to year, that increase in price is based on rents. The problem is that if rents and homeownership costs don’t move up at the same rate, then the metric falls apart. Before the pandemic, they were actually tracking very closely. It was kind of no harm, no foul. Rents were going up five percent. Cost of homeownership was up five percent, just using random numbers. But the idea is they were pretty much moving in lockstep, so the metric worked. Today, it doesn’t work at all because the cost of homeownership has just exploded relative to the cost of rents, which is pretty bad considering that rent is at an all-time high right now. If you actually look at the cost of home ownership, including home prices and interest rates, and see what is the monthly mortgage payment on a median price home today vs. three-and-a-half years ago in January of 2021, it’s up 116 percent. It has more than doubled. Conversely, according to BLS, their metric for the cost of homeownership is up 21 percent, so you’re off by a factor of five. Those are the kinds of statistical problems that we’re dealing with today in these inflation numbers. Mr. Jekielek: You said that you have a few other examples of this. Mr. Antoni: Sure. Sometimes you have things which are very, very difficult to measure. Health insurance is a good example of that. Because when I’m trying to evaluate the cost of health insurance, I don’t want to just look at premiums. Let’s say your health insurer doubles your premium, but also doubles your coverage. Yes, you’re paying more in premiums, but your copay goes down and your coinsurance goes down. There are all kinds of procedures and treatments and drugs that are now available to you that are covered by your insurance that weren’t previously. In other words, it’s a net wash. It doesn’t actually cost you any more out of pocket at the end of the year. You pay more in premiums, but you get much more in terms of drugs and services. We don’t want to actually count that as an increase in health insurance because you’re paying more, but the quality of what you’re getting has gone up as well. We want to account for those differences. The way that BLS has chosen to do it is by looking at the profits of these health insurance companies. The idea is if the health insurance company is charging you more, but also giving you more, their profits stay the same. They say, “We’re going to use that as the proxy for the quality of your health insurance.” The issue here is that if something were to cause corporate profits at health insurers to go down, it translates into a decrease in the cost of health insurance within the CPI. That’s what is happening today. Even though people are paying more for health insurance, the quality of that health insurance has demonstrably gone down. We know that by looking at the things that are covered, and by looking at what people are actually using in terms of things that are covered. Let’s say your health insurance gives you all kinds of coverage, but it’s not for anything you actually need. The quality of the product hasn’t improved for you. Then we can also look at things like copays and coinsurance. Demonstrably, the quality has gone down and the price has gone up, but the CPI counts it as going down. You ask, “Why is there a 30 percent drop in the health insurance component of the CPI when everything says health insurance costs are going up? That’s why. We see this a lot with food. We see it with transportation and with cars. Cars might be the best example of what we call the hedonic adjustment, where they want to account for quality changes. The problem here is that if the free market develops a better product and people are willing to pay for that, it’s very clear and it’s very easy to measure how much people value that improvement. If an auto manufacturer puts in a fancy airbag or other safety feature, and the cost of a vehicle goes up $5,000, and the same number of people are willing to pay that $5,000 extra for the car, it is pretty clear that people value that improvement in quality at that increase of $5,000. The issue is that when the government mandates something, that is also thrown in as a hedonic adjustment. In other words, if the government imposes a regulation on vehicles, and all of these vehicles must have backup cameras, daytime running lights, or new side curtain airbags, all of those things get counted by the BLS as improvements in quality, even if consumers don’t want them. It doesn’t matter. They still get counted as an improvement in quality, and therefore their cost is actually not included in the CPI. This is a big reason why over literally a quarter of a century, you had the price of vehicles not changing in the CPI. Basically right up until just before Covid, the price of vehicles didn’t budge. Much of that had to do with the fact that BLS kept taking the price increases that we saw year after year and erasing them by saying that the quality of the car has improved by just as much as the increase in price. Again, government regulation plays a big role in that, because the BLS just essentially assumes away any higher cost of production from regulation, assuming that it’s going to create a commensurate increase in quality of vehicle. Mr. Jekielek: The reality is it would probably be a mix. Some of these things would create real value and some of them wouldn’t, from the consumer perspective. Mr. Antoni: Exactly. That’s true for most of these government regulations. There is some kind of increase in the quality of the product, except the question then becomes, is it actually the cost of production? The answer is almost always no. The reason being, if the consumer was really willing to pay that, the manufacturer had an incentive to provide it anyway, so they would have done it in the first place. We get into some very perverse situations where the BLS actually counts something as an increase in quality when, in fact, it’s a decrease and the consumer is paying more for it. Dishwashers are, believe it or not, a good example of this. The government stepped in and said, “You can only use a fraction of the amount of water that was previously used.” Maybe now you can only use two gallons to wash your dishes instead of using eight. The problem is now the manufacturer has to produce a product that is much more expensive because it needs to use so much less water. It needs to be hyper-efficient, so it’s going to cost the consumer more. Except the BLS looks at this and says, “We can assume that away, because now it is clearly a better dishwasher,” even though it’s not. You now have people today who have to run their dishwasher twice to get their dishes clean, except that they’re paying more to do so. The consumer is worse off. You’re getting a more inferior product, and you’re paying more for it. By the way, this is why I have no social life. I spend all my time doing these things so other people don’t have to. Mr. Jekielek: Different people will have different insight into these various personal cost increases, whether it’s health insurance or car prices. But food is universal and that’s where people would notice it the most. How do things look there? Mr. Antoni: This is another case where we don’t see the numbers quite matching up to a lot of the government statistics. Part of this is not so much due to the quality adjustments, but because people are having to change their buying habits. It’s reminiscent of the Irish people during their potato famine when a very small portion of their food budget went to meat. Almost everything went to potatoes because they were poor and that’s all they could afford. When the potato crop failed, the demand for potatoes actually went up, not down, and the demand for meat essentially collapsed. Despite the fact that potatoes were more scarce and their price had increased, people still demanded them more, the reason being because it was still cheaper than any other alternative. We see something similar today where the Federal Reserve Bank of Dallas, in their latest manufacturing survey, one of the survey respondents noted that in the food industry the demand for sausage was exploding and the demand for other types of meat was going down, the reason being is a lot of these people can’t afford steak anymore. They can’t even afford chicken breast. All they’re doing is switching out one type of meat for another, and the cheapest thing available is sausage. The issue here is that consumers today are not necessarily buying the same basket of goods and services that they did two, three, or four years ago. The problem is now you’re getting a substitution effect on top of an income effect. The income effect is that inflation has caused prices to rise everywhere. Everything has gotten more expensive. But now there’s also a shift in demand where consumers are substituting A for B. I’m not buying as much steak, but I’m buying more sausage. Now, you have an increase in the demand for sausage, which is causing the price to rise more than it would rise for a beef steak. This is one of the reasons why inflation hits low-income consumers harder than anyone else. It’s because the things that they were buying disproportionately to begin with, the middle class are starting to buy as well. Likewise, what the middle class was buying, more of the upper class is now starting to shift to those buying habits too. Again, you’re getting an increase not only from inflation, but also an increase in price because of that shift in demand as well. Mr. Jekielek: You’ve given us several examples here. We’re always using some kind of proxy for trying to understand what’s happening in different parts of the economy. It’s very difficult to measure it directly. Mr. Antoni: Sure, absolutely. Mr. Jekielek: What does the cumulative effect of these mismatches look like? Mr. Antoni: It’s massive. This is why there’s this huge disconnect between the business headlines and what we see in the media and how people are reporting they feel today about the economy. We hear that inflation is down or inflation is under control, but an average person will say, “My cost of living has never been higher. I can’t make it from paycheck to paycheck. I took on a second or even a third job, and I’m still in massive amounts of credit card debt.” Inflation is cumulative. The three percent inflation that we have is on top of the nine percent inflation we had previously. Every month, prices are hitting a new record high. They might be going up slower than they were before, but they’re still going up. If we remember the fact that these inflation numbers are being undercounted, that means that the three percent inflation might actually be six percent, and that nine percent inflation might have been 18 percent. Not only is it cumulative, but if every period is worse than we thought it was, and that’s also cumulative, too. huge cost of living increase that just blows away the estimation that we have previously. Again, looking at something like the cost of home ownership, which is the single biggest line item in the consumer’s budget, the fact that that has doubled in just three-and-a-half years, as opposed to the 21 percent official increase, I think that says it all. Mr. Jekielek: What is the reality of inflation? Is there a number that you can peg on it based on your calculations at the moment? Mr. Antoni: There’s several different ways to go about that, some of which actually seem kind of comical, but are surprisingly accurate. The Big Mac Index jumps to mind. A McDonald’s Big Mac contains a surprising number of inputs. You can look at just the food components; the beef, the cooking oil, the wheat, the lettuce, and all of the ingredients in the condiments. But then you also have labor costs. You have energy, not just the energy to heat the griddle, but the energy that fueled the truck that got the ingredients to the location. There are the utility costs of running that location, and all of the utility costs of running the different food production facilities that made all those different ingredients. Again, there is labor at each of those stages. There are a surprising number of inputs across the economy that all go into producing something as simple as the humble Big Mac. What’s interesting is that it provides a remarkably good estimate for inflation, again, because it includes so many inputs across the economy. You look at this and say, “Wow, it’s not up 20 percent. It’s up 50 percent.” You can do that for lots of different things across the manufacturing and service sectors. Mr. Jekielek: But the Big Mac Index is a thing. Mr. Antoni: It truly is. When people are talking about how they can’t even afford McDonald’s today because the cost of living crisis is that bad, that should clue us in and alarm bells should be ringing here in Washington that there’s something wrong and that these official numbers are not really representative of reality anymore. Mr. Jekielek: How does one look up the Big Mac Index? Mr. Antoni: Just Google it. Mr. Jekielek: You said there’s other ways to tackle this. Are they all based on these multiple inputs across the economy? Mr. Antoni: Some of them are. Some of them are like the Big Mac Index where they do that. There are other alternatives, one of which I’m working on publishing right now, where essentially what we do is we take the most problematic areas of the CPI, some of which we’ve talked about already. Things like the hedonic adjustments with cars home the cost of home. Mr. Jekielek: What is the definition of hedonic? Mr. Antoni: This goes back to that quality adjustment where we say that the quality of the vehicle has increased by a certain amount. We don’t want to account for that portion of the price increase because what we’re trying to measure with the CPI is essentially something that should be constant over time. The problem is these things like vehicles are not constant over time. The Chevy Impala that you buy today is vastly different from what it was 60 years ago. If your car is going to last longer, be safer, be faster, have better performance, have Sirius XM radio, have the backup camera, have blind spot monitoring system, and have all the bells and whistles and things that hadn’t even been invented when the model first appeared on showroom floors, how on earth do we account for that increase in quality? Because if you’re paying the same amount from one year to the next, but you’re getting a better product and you’re getting more for your money. We actually want to show that as a decrease in the cost. Mr. Jekielek: Okay, got it. Mr. Antoni: Essentially, you want to look at all of the most problematic areas of the CPI, and you want to reevaluate them using real-world data. With the caveat, by the way, that just as the current way the BLS measures these things is imperfect, any other way in which we try to measure them is also going to be imperfect as well. Maybe we can devise something that over the last four or five years works very well, but in other circumstances might not work so well. Mr. Jekielek: You have to stay on top of this. You’re working on an index right now, correct? Mr. Antoni: Yes. Again, it incorporates things like this huge increase in the cost of home ownership compared to the very small increase that’s shown right now in the BLS estimates. Mr. Jekielek: We often hear about legacy media not doing a good job of representing reality in different areas. It creates a kind of disquiet in society, where you’re not sure if you can trust what you’re seeing, especially when it comes to economic numbers. In general, how much can we trust the statistics that we are seeing? Mr. Antoni: Unfortunately, a lot of the numbers that we get today just aren’t very trustworthy. Sf that we can know simply by looking at one set of official numbers and comparing it to another. You can simply compare the official numbers from the government and see that we have a mismatch. If we could go back to the jobs numbers, we have a really good example there. Ever since the spring of 2022, when a lot of these red flags first started appearing in the BLS statistics, that was when the establishment survey and the household survey just started this unprecedented divergence. What are those two? You have a survey of business where we simply ask businesses, “How many people are on your payroll?” Then we have a survey of households where we ask things like, “Are you employed or unemployed? How many people are in your household? How many of you are actually in the labor market?” We don’t want to count a six-year-old as being in the labor market, for example. We saw that despite this very steady rise in the number of payrolls, the number of people employed has not kept up. In fact, lately, it’s been going down. There are fewer people employed than there were just a few months ago. You have to ask, “Why is there this disconnect?” Now it’s not uncommon that in any particular month, one of those numbers will go down and the other up. In other words, maybe the number of payrolls went down last month and the number of people employed went up, and then the next month it reverses. But essentially, these two track together very tightly over time. The fact that there is this divergence today of literally millions between the number of people employed and the number of payrolls is a significant statistical issue. You can have a hypothetical situation where there’s very high inflation and you say, “I can no longer make ends meet. I have to go out and get a second or even a third job. I am now still the same person employed, but every additional job I get, even if it’s a part-time job, gets counted as another payroll.” The double counting of workers has actually become somewhat of a problem today. Whereas, if we increase the number of multiple job holders, you’re increasing the number of payrolls. The other issue is that if I already have two jobs and I go out and get a third, you’re not even increasing the number of multiple job holders at that point. But you’re increasing the number of payrolls, so even the number of multiple job holders is now underestimating the impact on payrolls. You’re also in a situation today where, as the labor market is slowing down very quickly, businesses are getting rid of a lot of full-time workers and replacing them with part-time ones. In fact, over the last year, we’ve lost over a million full-time jobs in the economy. All of the jobs that we have added have been part-time jobs. Again, every time I lose a full-time job and replace it with two or three part-time jobs, I’m worse off, but the payrolls go up. Mr. Jekielek: In this case, they both track. Because both the payrolls and the number of people employed go up, unless they’re multiple job holders. Mr. Antoni: Exactly. I lost my full-time job and I replaced it with three part-time ones. When we count payrolls, it doesn’t matter how many hours you work, it’s still a payroll. As long as you are on the books on whatever payroll period includes the 12th of the month is the way they do the statistics. That has become a big, big problem today. Again, we also have this issue we talked about earlier, the birth-death model, where we’re looking at the birth and death of firms. That has been grossly overestimating the number of jobs being added. Mr. Jekielek: What is the birth-death model? Mr. Antoni: That’s when we look at firms being born and firms dying. In other words, firms being created and a firm going out of business. We can ask, “If this business is created, how many jobs is it going to add to the economy? Likewise, if it fails, how many jobs are going to be lost?’ The problem today is that we are grossly overestimating the number of businesses within the economy, and therefore we’re overestimating the number of jobs that those businesses have created, to the tune of hundreds of thousands just this year alone. By some estimates, you can wipe out half of the job growth we’ve seen this year by essentially correcting for the faults in that model today. It’s a model that worked reasonably well before. It’s not as if this has always overestimated the number of jobs in the economy. The problem is that the underlying assumptions behind that statistical model don’t represent reality in today’s economy, and the BLS still hasn’t corrected for that. Mr. Jekielek: Hopefully, they will watch this episode. Mr. Antoni: Doing it quickly is key, because you have major decision makers who rely on this data, whether they should or not. It is everyone from the Federal Reserve to the major investment houses. They’re all trying to use this data that is supposed to be reasonably accurate and available in a timely manner. The problem is that accuracy just doesn’t exist anymore today. We’re having to rely on much more accurate quarterly census data in order to look back months after the fact and realize, “We were way off.” Let me first say I have absolutely no evidence that anyone is cooking the books at BLS or doing anything untoward there. In fact, I actually know some BLS folks and have no indication from them that anything nefarious is going on. Where I think this becomes scandalous is the fact that these statistical problems first became evident in the spring of 2022, more than two years ago, and nothing has been done to correct them. We need to have some kind of mechanism to correct them in a timely manner. The problems have been evident to those of us outside of BLS. I have to assume they have also been evident to the folks who are hip deep in the data. Mr. Jekielek: With the advent of AI and the automation of data gathering, we are spitting out results based on the models that we input into these systems. As our society has become more dependent on this type of process, it becomes even more important to make sure that the underlying assumptions of the models are correct. Mr. Antoni: Absolutely. It’s important to understand these models are extremely consistent, but that doesn’t mean they’re accurate. Those are two very different things. They’re extremely consistent over time, but what would be accurate in one instance can be terribly inaccurate in another. We sometimes have to sacrifice that consistency in order to make them more accurate. In other words, we have to be able to change the models and methodologies over time in order to try to be as reflective of reality as possible, because that’s the goal. You talked earlier about proxies. We want these things to be proxies for reality. We wish we could observe reality in its entirety, but obviously we can’t. We don’t know precisely how many jobs exist in an economy every second throughout the year. But we want to get some feel and some estimate for that and we want that estimate to be as close to reality as possible. Mr. Jekielek: In one of your posts, you were concerned that recent economic growth is in reality a debt bomb. Please explain that for us. Mr. Antoni: Looking at federal finance and the economy as a whole can be confusing. If we look at it in terms of family finance, it can make a lot more sense, so let’s do it from that route. You have a family who is not making enough money to buy everything they want, and so they get a bunch of credit cards and start racking up credit card debt in order to increase their spending today. What they’re essentially doing is pulling future income into today to increase today’s consumption. The problem is that you can only do that for so long and eventually that debt starts to catch up with you. You have the cost of servicing that debt, and eventually that debt needs to be repaid, so you end up having to sacrifice future consumption in order to pay down that debt. Your future income now needs to be used to not only provide for that future consumption but pay yesterday’s consumption as well. Now, in some cases, this is highly desirable. There are plenty of instances where we go into debt, like to buy a home, in order to increase our consumption today, particularly when we can anticipate in the future having a higher income than we do today. Unfortunately, what we’re doing right now at the government level is the equivalent of that family going into much more credit card debt than they even have in terms of annual income, to the point where just the cost to service that debt, in other words, the interest on those credit cards, is starting to eat into their budget. They are spending so much just in monthly finance charges that now they’re having trouble paying their rent, paying for groceries, and putting gas in the tank of the car. That’s where we are today. Eventually, all of that debt has to get paid back. The fact that it’s already starting to bite means that the debt bomb is already starting to go off. It is now at a point where the family is paying so much in interest on the credit cards that they have to do a balance transfer to a new card. They keep having to move the debt around and do the same thing month after month. They are going into more debt just to pay the interest. It’s a big downward spiral. Eventually, when the debt collector comes knocking, you have to drastically cut back your consumption, even of necessities. You have to cut back in order to pay down some of this debt and it’s going to be really, really painful. Now, where the analogy breaks down is the fact that the family can’t run a counterfeit operation in their basement and just print pieces of paper and call it money. But the federal government can do this and we call that inflation. What the Federal Reserve has essentially been doing to help finance this runaway debt for the federal government, is to create out of nothing money for the Treasury Department to spend. When they do that, they devalue the dollar. They are essentially siphoning off a small portion of the value of all the dollars that are in existence and putting it into the new dollars that they create for the Treasury to spend. But it does provide Congress with the money that they wanted. Mr. Jekielek: In these situations with shifting debt to new credit cards, eventually, there’s a company that comes along and says, “I can help you write off some of this debt. We’re going to charge a small fee and take care of it for you.” But there’s no such external mechanism with the Federal government and they have to deal with it. Is that correct? Mr. Antoni: This is where we go back to the Federal Reserve, which is the external mechanism that the federal government uses to pay down its debt. Now, to be clear, it’s not paying down the number of dollars. This goes back to that question we were talking about earlier with inventories. The dollar amount of the inventories may stay the same, but there’s less physical stuff there. In this case, with things like the federal debt, we can go back to the 1970s, even into the early 80s, when the federal debt was exploding, but the actual value of the debt was going down, not up. The reason for that is because the rate of inflation, the devaluing of the dollar, exceeded the rate of increase in the debt. Now, we had very painfully high inflation back then, but we’re seeing something similar today, where you are seeing the value of the dollar go down so quickly that it’s eclipsing the increase in the actual debt. The official numbers which grossly understate inflation show the dollar has lost about a fifth of its value in less than four years. That’s horrific. But it also means that all of the debt that existed before that time has now decreased in real value by about a fifth as well. Mr. Jekielek: There are also all these holders of this debt. Communist China holds a lot of U.S. Treasury bills, although they’re selling them off pretty quickly. Mr. Antoni: By the way, this is actually a big reason behind Russia’s timing in terms of the war with Ukraine right now, the fact that they sold off all of their U.S. Treasury debt. Because if you do have a lot of U.S. Treasury debt, to a certain extent, you’re beholden to the Treasury. You may think, “Shouldn’t it be the other way around? No, the Treasury can say at any moment, “We’re not paying that debt back. Those bonds that you hold are now worthless.” I would not be surprised if China, in their race to get rid of all their U.S. Treasury holdings, is waiting until that process is complete before they do something like move against Taiwan. Because if they do that right now, the U.S. government can say, “Those hundreds of billions of dollars in U.S. debt that you have, we’re not paying it back. We’re writing it off. We’re canceling it.” Mr. Jekielek: Right. It is because we don’t like their foreign policy. Mr. Antoni: Exactly. But it’s part of the politicization of the dollar, which is threatening the dollar’s reserve currency status. Unfortunately, you have a lot of Americans that have been holding U.S. Treasury debt as well, and those folks have gotten absolutely crushed. Countless Americans in retirement had U.S. Treasury bonds paying very low rates of interest with very low yields. When you have a bond that is only paying you two or three percent, and inflation, even just the official numbers, is five to eight percent, you’re actually losing money on that deal. You’re essentially paying the government for the privilege to lend them money. It’s ridiculous, but that’s what has happened. All those poor folks who thought they had enough money saved for retirement are now finding out the hard way that they don’t. They may have had enough money, but not enough value. Mr. Jekielek: There has been a lot of discussion about the debt being too large. There doesn’t seem to be much effort being made to deal with that. How do you view it? Mr. Antoni: There is not much appetite on either side of the aisle to really deal with the debt. Part of that is because it’s just too politically easy to let the Federal Reserve deal with it. If you’re in Congress, it’s a lot easier to let the Federal Reserve deal with the problem than for you to have to deal with it. Because if the Fed deals with it, they create inflation. Now, everyone is trying to figure out, “Why the heck is my cost of living going up so much?” They have a very difficult time following the path all the way back to the Fed and to Congress that’s spending too much money. Conversely, if Congress is going to deal with it, then how do they deal with it? It’s by reducing spending. That’s very tough to do in an age when politicians typically get elected by playing Santa Claus and promising to give their constituents all these different goodies, never mind the fact that you’re the one paying for everyone else’s goodies, so it’s a net wash. But if Congress is going to cut back spending and really deal with the problem, they have to go to their constituents and say, “You’re not going to get as much federal largesse as you used to.” That’s very, very tough for elected officials to do. The American people have suffered for many, many years under a dumbed-down education establishment that has really robbed a lot of our fellow Americans of critical thinking skills. At this point it’s very hard for them to realize what is the impact of federal spending, and what is the impact of the federal debt. I recently had a conversation with some folks that said, “The federal debt is over $35 trillion. It’s going to hit $36 trillion before the end of the year, and we’re all still here. What’s the problem?” I said, “Are you paying more for groceries or for gas in your car? Is your rent exploding right now? Are you in a cost of living crisis?” One person said, “Absolutely. I have four roommates. I used to have my own apartment. Now, we all have to rent this four bedroom together.” I said, “Do you know why that is? It’s because of the federal debt that you don’t care about. That’s why.” These things have real impacts on people’s lives. The problem is just that we don’t connect them and see how you get from A to Z. Mr. Jekielek: We have to rein in spending. That’s my conclusion from our discussion today. Mr. Antoni: On a personal level, it’s not so much that I am spending too much, because I can only spend as much as I take in. I don’t have the option that Congress does, where I can go to the Fed and say, “Hey, Jerome Powell, Mr. Chairman, please print me off a few trillion dollars because I have this massive hole in my budget.” If I’m going to go into debt, I eventually have to pay that debt off. Otherwise, that debt collector is going to come knocking and I'll be in a world of hurt. I’m not so much worried about the consumer as I am worried about Congress, because Congress has that option of the Federal Reserve. If we didn’t have that, then Congress would eventually bump up against these hard stops where they have no other option but cut spending, raise taxes, or some combination of the two. Unfortunately, today they can always pick door number three, and that’s inflation. Inflation is fundamentally a tax. It’s a hidden tax because Congress didn’t vote on it and the president didn’t sign a bill, but it is still a tax because it’s a transfer of wealth from the people to the government. I don’t know a better definition of a tax than that. That’s why we need Congress to cut the spending. All government spending is paid for. It’s just a question of how do you want to pay for it? You can raise taxes now, or you can sell bonds now and raise taxes in the future, or you can just inflate everything away. Sadly, they keep choosing the third option. At least that’s what they’ve done the last four years or so. Mr. Jekielek: You don’t sound very hopeful here. Mr. Antoni: Hope may not be warranted right now. But we’ve been in some really tough scrapes as a nation. Somehow or other, America has survived and I’m hoping that’s the case right now. I don’t know for sure. The numbers do not look good, I can tell you that. And every day that goes by where we kick the can down the road, we’re actually rolling the snowball down the mountain. Every inch it goes, the more it’s accumulating, the bigger it’s getting, and the harder it’s going to be to eventually stop it. Now, is it impossible? No, it’s not. Is it painful? Yes. But again, we’ve been through this before. The 70s were terrible. It took three pretty lousy presidents to give us Ronald Reagan and the tremendous economic expansion that followed. To get inflation under control, Paul Volcker had to deliver back-to-back recessions and 20 percent interest rates on mortgages. It got pretty painful, but we did get through it. Mr. Jekielek: You’re saying there is no way around significant austerity. Mr. Antoni: It will be painful. Every single dime of spending has to eventually be paid for. It might not be today, and it might not be tomorrow. The laws of supply and demand are no different than the laws of physics. We somehow think that society has advanced to a point where we can get around these laws or they don’t apply to us anymore. We somehow think we can outsmart them, as if jumping off the roof of this building means we can defy the laws of gravity. Again, it may not be today, it may not be tomorrow, but these immutable laws of the universe always catch up to you. Mr. Jekielek: With this runaway federal debt and the snowball effect you described, there’s a cliff down the road at some point. But what does that actually look like? Mr. Antoni: It looks like the Weimar Republic in Germany, where initially everything seemed great. People forget that before the hyperinflation in Germany in the early 1920s, they had the greatest stock market boom in the history of the world and all of that inflation caused a massive bubble in asset prices. We’re seeing that today with equities, stocks, and real estate. We have all kinds of bubbles throughout the real economy courtesy of inflation. It’s very common that those things happen before the inflation trickles down into consumer prices. It’s not as if those things move in lockstep together. They don’t. You typically get the asset bubbles before you get the consumer price inflation. Looking at today, how does this all unravel? Unfortunately, if we continue down this road where we just let the spending snowball and let the debt snowball, the interest payments will also snowball. Today, you mentioned the $35 trillion debt. The cost to service that is about $1.2 trillion a year. That’s just the interest, not even a dime towards principal, just paying the interest on the debt. It’s consuming more and more of the tax revenue, and leaving less and less for the actual government spending. Therefore, more and more of that government spending needs to be paid for with more and more inflation. Again, that’s where you get into that downward death spiral of finance, similar to what the family faces with all the credit card debt. You have to go into more and more credit card debt every month just to finance your existing credit card debt. That’s how you get to a scenario like they had in the Weimar Republic, where Germany essentially had to run the printing presses harder and harder every month, to the point where they were creating paper shortages in order to create enough money, with nothing to back it. They were just creating enough money to pay the government’s bills. In that case, it was war reparations. In the case today, it’s largely nonsense, but it’s still government spending, regardless of how they are wasting it. Mr. Jekielek: Is there a hopeful note at all in all of this? Mr. Antoni: The hopeful note is the ingenuity of the American spirit and the fact that we have been through some very dark days. We’ve been through a civil war and have been able to overcome that. Sometimes it takes us a while to get there, right? Winston Churchill said, “You can always count on America to do the right thing after she has tried everything else first.” Sometimes it’s really painful to make those mistakes. But somehow or other, at the last minute, we’ve always been able to course correct, so fingers crossed we can do that again. Mr. Jekielek: EJ Antoni, such a pleasure to have you on the show. Mr. Antoni: My pleasure. Thank you for having me. This interview was edited for clarity and brevity.