Hugely detrimental Trump hits the brakes on A I security executive order

Time for Money Power Politics. We're tracking a very big story tonight. You may have missed it. It's about big tobacco. According to the New York Times, new campaign finance filings reveal that tobacco giant Reynolds American donated $5 million to a Trump-backed super PAC last month. The Times reports, just two days later, a top executive at Reynolds and two lobbyists who represent the company had lunch with Donald Trump at his golf club in Florida. According to three people briefed on the meeting who were not authorized to discuss it. And less than one week after that, the Trump administration rolled out a new policy the company had been hoping for that could allow major tobacco companies to sell flavored vapes. The Times points out there is no definitive evidence linking the new guidance to the lunch, the donation, or any specific lobbying. A spokesperson for the White House told the Times the following. The only guiding factor behind the Trump administration's health policymaking is gold standard science. A spokesperson for MAGA Inc. said the super PAC is, quote, pleased to accept legal contributions from those who agree with President Trump's America First agenda. Reynolds did not respond to requests for comment from the Times. Still, the situation has us asking the question again and again and again. Is the White House for sale? Joining me now, Natasha Stern, former Treasury official and Yale law professor and Brookmasters U.S. managing editor for the Financial Times. What is your reaction to this? You know, if flavored vape pens, you know, as a mother of young children, I have to say it's a little bit like tales old as time, kind of money and politics and lobbying. But this combined with your last segment step in talking about the nature of the tax system being used to reward the president's political allies. And now we're talking about the idea that we're going to put flavored vapes in the hands of kids in a way that we know is detrimental to them and highly addictive. I don't know. It feels quite, quite concerning. You're not the only one who thinks that way, because just four days after the new guidance was announced, the FDA commissioner resigned, reportedly telling associates he could not in good conscience remain the head of an agency that backed such a policy. What does that tell you? Well, it tells you that he, McCary is the FDA commissioner who resigned, was in trouble for lots of other things and did not exactly have particularly high standards. But even for him, flavored vapes were too much. It's worth remembering that those vapes have been banned because of the Trump administration. They did the rule in 2019 that said you couldn't addict kids after there was incredible evidence that kids were getting sucked into vaping. No pun intended. Natasha, there's a new topic here. The president today delayed signing an executive order on artificial intelligence that would have allowed the U.S. government to pre-evaluate the security of AI models. The Washington Post reports tonight that phone calls came in from AI leaders like Elon Musk and Mark Zuckerberg. These phone calls helped persuade Trump not to sign it. Their words to him. They warned him it could hurt AI development, which is at the heart of the U.S. economy right now. So let's just take a minute. Just a week ago, when we started to see the Trump administration push back on AI and data centers a little bit, it was like, oh, maybe they're starting to listen to the American people. But boom. As soon as he gets close to signing executive order that would slightly slow things, these guys get on the horn and say, it's us versus China. Who do you want to win? And he presses pause. And you know, what I find is so striking about this stuff, and I'm sure you've been reading the same reporting that I have, is kind of the volatility and chaos associated with this postponement. It wasn't that this is like a very measured and thoughtful set of policies that the administration considered. It was literally that you had executives midair flying to Washington today for the release of an executive order and then realizing that that wasn't going to be happening. And so I think in and apart from exactly the nature of the importance of safeguards and guardrails around artificial intelligence, which are so first order, there is just this like uncertainty, chaos in the economy that's coming at each and every turn that I think has hugely detrimental consequences. Brooke, we are on the cusp of multiple block, like I need a bigger word than blockbuster public offerings, SpaceX, OpenAI, Anthropic. How much could this transform our economy, especially with so few guardrails and so much mega wealth in a tiny group of very, very powerful hands? I think obviously if these models turn out to be as useful in displacing people, we could end up with a couple of trillionaires who have absolutely no controls on them. Because what's interesting, at least about SpaceX- Trillionaires. Trillionaires, first of all. But SpaceX's IPO's filing, the S1, says basically if you buy a SpaceX stock, you have no rights whatsoever. Elon Musk controls it. You can't sue. You can't complain. He's got no fiduciary duty towards you. Basically, it's his company and you're along for the ride. Isn't that stunning? Because that's the one hiccup, right? For companies, when they have to go public, knowing they have to answer to shareholders, right? They have to act as a fiduciary. Shareholder lawsuits come up every day. This is all that CEOs deal with. And in the case of SpaceX, it's like, it's truly, this is the house of Elon. You get what you get and you don't get upset. And he's going to get it. And by the way, to this point, it's not just that he's going to get it. And again, this is a trend that's moving, but it's moving so far in the direction that unprecedented almost doesn't feel like a word big enough. But we're also in a situation where I think it's important for your viewers to understand the world's first trillionaire is something that is highly consequential, not just because of the concentration of wealth that that entails, but also because of what it means for political power in our system. And a system that is so ill-equipped, by the way, from I'm a tax professor, from a tax perspective to ever be able to meaningfully capture or have the FISC have any say with respect to the dollars that Elon Musk is going to make relative to the tax collections that we do for regular people. And you heard kind of Jeff Bezos say a version of this in his interview with Andrew Ross Dworkin this week. He thinks that billionaires are already paying their fair share with respect to taxes. I think that as you're in a situation where you're seeing more billionaires and trillionaires, we really need a tax system that's fit for purpose. Damn. All right. One more topic. The bond market. The bond market is starting to flash warning signals. Why should Americans pay attention to this? Because most people don't even lots of people that are invested in the markets don't pay attention to this. The bond market's predicting inflation basically is what it's saying is that there is no way we can keep going at this rate of inflation. And what that means is higher interest rates, higher costs. So your mortgage is going to go up probably, you know, maybe your wages will go up, but more likely, given AI, everything you have to buy will go up. And so it is an absolute warning sign that governments are spending beyond their means and the bond market, which is the thing that ultimately funds the U.S. government, because, of course, we have a deficit. If if bonds become more and more expensive for the government to issue, we're going to spend more of our tax dollars just paying interest on those bonds and there will be nothing left to cover the things we want to do. Already among the fastest growing parts of the federal budget is the interest that we pay on our outstanding debt. And by the way, the bond market might not be something that people pay that much attention to, but it really should be because there's a sort of famous saying, you know, you want to come back to life, James Carville said, as the bond market, because of its massive disciplining device. It's something that when at this time last year, which feels like now eons ago, you saw bond markets flaring signals around Liberation Day in those tariffs. That was something that the Trump administration felt that they had to respond to. That's Trump's daddy. The only real guardrail. Trump's daddy is the bond market, bond investors. So I hope he's paying attention because they're really signaling some deep warning concerns. What about the concerns of the divide that's only getting worse? Like we talk about the political divide in this country. This economic divide is reaching almost panic status. Right. We all just said it. You've got people that are going to make millions off Elon Musk's IPO. He's a trillionaire. Other potential trillionaires, while millions of Americans are locked out of homeownership with mortgage rates hitting a nine month high. Can the United States sustain an economic divide like this for so much longer? I mean, in that same interview, Jeff Bezos was sort of blaming politicians for the American people being angry about the economic divide. That anger could topple us. And just to be clear, I think that anger comes from the nature of the lives that the American people are living today, in that if you look at 93 percent of U.S. counties have seen housing costs outpace earnings over the course of the last 15 years. Housing is prohibitively expensive for people. It is like people don't even aspire anymore to ever be homeowners. People in my generation don't think that that's an attainable part of the American dream for them. The cost of child care, health care, all of it is kind of faded away. So, of course, people are rightfully frustrated by an economy that doesn't feel like it's working for them. A core piece of the American dream, owning a home, is now considered a luxury at a time of trillionaires. This is America.