211. AOC Is Breaking With The Democratic Socialists — Here’s Why

0:00Anthony Scaramucci:Democratic Socialists of America are having a national moment. They're racking up electoral wins across the country. Zora Mandani, of course, famously in New York, Katie Wilson in Seattle. They're also setting a policy agenda in Democratic primaries across the country. So it's time we asked, do they really have what it takes to change American politics? I have some pretty strong views on this and we will get to that. Meanwhile, prices are rising. Unemployment is climbing. is Trump's working class base starting to crack? This episode is brought to you by eToro. A tariff, a spending plan, a regulatory change.

0:38Anthony Scaramucci:It can all start just as the first line of a speech, but it sets in motion things that can reach far beyond Washington and unfold for years to come. That's right, Katty. Markets move on expectations, not just events. Investors are constantly weighing what a decision could mean for company sectors and the wider economy. So eToro is an investing platform where you can access a wide range of markets and explore how political and economic developments could affect them. You could also learn from the global community of investors and see how people around the world are interpreting the same news. As with all investing, your capital is at risk.

1:21Anthony Scaramucci:See eToro.com forward slash TripUS for full terms.

1:35Anthony Scaramucci:Welcome to The Rest is Politics US. I'm Katty Kaye. And today I'm joined by my friend, the co-host of the Prof G Markets podcast, Ed Elson. Ed, thank you very much for joining us. Thank you for having me. Very excited to be here. I will not reveal to the audience that the last time you and I spoke, it was about pornography for another podcast. Don't tell them. Don't tell them that sex always sells. Thank you. Anthony is away today. He's on a Disney cruise, which is okay. I'm going to be honest. I could not do a cruise with a whole load of screaming children, but he's having a great time. So good for him.

2:12Incredible.

2:12Anthony Scaramucci:Okay, let's talk about the DSA. And Ed, I want to get your take on their economic position in a second. But let's start by looking at the amount of attention that the Democratic Socialists of America seem to be getting at the moment. Obviously, we've had over the weekend Congresswoman Alexandra Ocasio-Cortez of New York, who has distanced herself from some of the more radical positions of the Democratic Socialists of America, but said she was a member of her local DSA chapter. And she was being asked about other DSA candidates, and she seemed to be distancing herself from them. I also heard Abdul El-Sayed, who won the Michigan primary, of course, last week, distancing himself a little bit from some of the DSA positions.

2:59Anthony Scaramucci:He says he's not DSA, but he has campaigned with them six or seven times. And I'm wondering if you're now getting a kind of pushback from some leading figures on the left, on the progressive left saying, okay, we actually are now heading past the primary season into the November election. We do want to take power. And the way to take power in America is by moving away from some of these, particularly the cultural issues that are more on the left. And are you hearing that too? I just thought AOC's interview was fascinating over the course of Sunday and what she had to say about woke one being crazy, as she described it, which could be the new bumper stipper, by the way, for the Democratic Party.

3:42Anthony Scaramucci:That could be what they run on in November. Woke one was crazy, was how she described it. And I'm just wondering if you're kind of getting that sense, too, that there's a little bit of disquiet about some of the DSA positions. Yeah, I am getting that sense. And I think it's honestly a really smart and savvy move from AOC. I mean, first, we should just kind of recognize how we got here, how we got to this moment of democratic socialism and why this is so popular among people. I mean, it all goes back to the economics. It all goes back to the affordability crisis, which is getting worse and worse.

4:16We're seeing that with the inflation numbers, which we will get into later. But I mean, a big piece of it is also just the rampant inequality that has emerged in America, where the top 19 households today now control 2 % of all of the household wealth in America. It was 0.1 % just 40 years ago. So we've seen this massive widening between the upper classes and the lower and middle classes. The top 1 % now controls more wealth than the entire middle class. You have Elon Musk becoming a trillionaire. He's worth 3 % of US GDP. He's the richest American in the history of this country on a relative basis.

4:54I mean, the inequality is getting out of control and we can get into that further. But that's sort of the basis.

5:03Anthony Scaramucci:And young people are particularly pissed off about it. I mean, they are really. My kids always point to the DSA platform and they say, OK, we might not like some of the individuals and we can get into some of the policies. But there is an appeal there just because they're so fed up with old people hanging on to power and this income inequality, like you say. Exactly. And it's clear from the democratic socialists that that is one of their key issues that they want to target and they want to get serious about. We've had decades of politicians kind of signaling that they're interested in addressing affordability, that they're interested in addressing inequality.

5:37See, Trump, by the way, would be a perfect example, who said that one of his main agendas was to get prices down and also to reduce the cost of housing. And then he doesn't tacitly admit, he openly admits that actually he wants the price of housing to go up because he wants to reward older, wealthier Americans whose net words are tied to the value of their homes. And so he's saying it outright. I don't care about the fact that young people have basically no pathway towards achieving home ownership. I don't care about that because what I really care about is the demographic group that matters most in elections, which is the older demographics in America.

6:16And so that's the group to whom I'm going to throw these bones. So I think young people are correctly very, very upset about this. They're upset about the way that housing prices have risen faster than wages over the past 40 years. Same is true of economic productivity and GDP. same is true of the cost of college, by the way, which has tripled since 1980. Stocks are very expensive right now. That's more expensive than it's ever been in the past 20 years. So they're upset about all this stuff. Enter a platform where they say, we are going to change the course of this nation. We're going to change the trajectory dramatically.

6:58There is a world where there's capitalism, and that's what America has been all about. and we have something different that's called socialism. Now the question is, what does socialism actually mean?

7:11Anthony Scaramucci:So shall I run through? Here's what the DSA's national program calls for. I'm going to just tick off a few of things. Public ownership of the largest corporations, abolishing the US Senate, replacing the president and the Supreme Court with bodies answerable to Congress, actually probably not a bad idea, fully abolishing police and prisons, drafting a new constitution. So those are some of the things that they want. And various members of them have talked also about abolishing ICE in the light of all of the immigration crackdowns. And it's interesting to see how you've got these progressive candidates juggling two things, right?

7:50Anthony Scaramucci:Juggling the anger and the energy that you're talking about, both on economic issues, but I think also on cultural issues and realizing that some of those things like fully abolishing police and prisons is just never going to get you elected in America. I mean, it's like a non-starter, which is why you've got AOC slightly dancing around this and asked to endorse because tomorrow, Tuesday, there's another big primary in Wisconsin, another purple state just like Michigan. And the woman who is running for the Democratic nomination for governor, Francesca Hong, is a DSA candidate who has also called for abolishing Thanksgiving as well as abolishing police and prisons.

8:36Anthony Scaramucci:I don't know why. I mean, I don't like Turkey, fine, abolish Thanksgiving. But I can see another reason probably you're not going to get. And she's having to do this kind of, well, I've said these things and now I'm not saying them. El-Sayed is in the same position of, well, you know, I campaigned with Hassan Paikah, very far left, on some of these issues. Now he's having to distance himself from him in an interview over the weekend saying, no, I mean, that was a dumb thing he said when he blamed America for 9-11. Now he's saying it's a dumb thing. Four months ago, by the way, El-Sayed didn't disavow Hassan Paikah.

9:08Anthony Scaramucci:He stood next to him at a rally in Michigan. So I just think it's I get where the anger comes from. But I think some of the ways that these candidates are talking about it risk doing for the Democratic Party in November what refusing to back away from some of the transgender issues did to the Democratic Party in 2024. And I think there is a concern there. A hundred percent. And I think what they're realizing is that a lot of the people in the DSA and a lot of the people that run the DSA are not very bright people. And in some cases, they're kind of just basket cases. Did you hear that interview, by the way, with the co-chair of the DSA, Megan Romer?

9:53You pointed it out to me. I went and I found it, and I couldn't believe it.

9:57Anthony Scaramucci:Give our nice dear listeners a quick description. Well, she was asked the very important question, which is, what does taxing the hell out of the millionaires actually mean? Because that's what she kept on saying. We need to talk the hell out of the millionaires. And it's like, okay, so she's talking about the inequality problem. She's talking about what we need to do about it. And then the interviewer says, what do you mean by that? And she actually couldn't answer the question. She said, I don't really know. And then she stumbled a little bit and then she redirected. And he said, shouldn't you know your co-chair of the DSA?

10:26Anthony Scaramucci:And she says, oh, yes, I should. I mean, effectively kind of says, yes, I should have an answer. I should have an answer. I felt it was amateur hour. It was amateur hour. And I think what we're seeing is that there are some people who have aligned themselves with the DSA who are not amateurs whatsoever. AOC is an expert. She is a world-class politician. No question about it. There is another individual who I think is also a world-class politician and who I actually think has been a lot less extreme than a lot of people have thought. And that is Zoran Mamdani. I mean, if you look at the way that he was talked about and with fair reason, because he seemed very extreme.

11:02It seemed as though we were going to see a New York City that was going to go fully socialist, that was going to meet some of the definitions of the democratic socialist platform that you described earlier. But actually, that's not really what we've seen here in New York. I live in New York under Mamdani. What we've seen actually is that there are some pretty out there pilot programs like the rent freeze, which I personally don't agree with, like the city-owned grocery stores. Again, pilot program. I don't agree with it, but he isn't saying that this is the way that we're going to be forever. But then there's also been a lot of very reasonable and some would say more right-leaning decisions, such as he decided to continue the tough on crime agenda that we're seeing in New York.

11:45And we have seen the lowest number of murders in NYPD history. He decided to deregulate small businesses. He eliminated all the permits and the paperwork for thousands of small businesses because he wants to jumpstart entrepreneurship. He wants to increase housing supply. He wants to reduce permits to build more housing. He's taking balancing the budget quite seriously. He's appointed a chief savings officer to figure out how to eliminate wasteful spending in every agency of the New York government.

12:13Anthony Scaramucci:He could call up J.D. Vance, who's targeted with addressing fraud, right? Or maybe give Elon a quick call. Yes, exactly. Which is not something that you would have necessarily expected out of this guy who is, I guess, a socialist. But again, you have to ask yourself, what does socialism actually mean? Because what he's doing here, it seems, is he's pursuing a system which is more like capitalism, but with a significantly expanded social safety net, something similar to what we see in the Scandinavian nations. And that's a very, very different vision of America that does not fit the DSA. Some of this is structural, right?

12:51Anthony Scaramucci:Mamdani, to some extent, as all democratic socialists would be, and all mayors are, are limited by state law. So he needs Albany, the capital of New York state, to help him if he's going to do something like free buses or a rent freeze. And he hasn't got Albany sign-off so far, my understanding is, on those things. He has had Albany sign-off and cooperation on expanding childcare, access to childcare for New Yorkers. And so he can do that. So there are checks and balances built into the system for all of these candidates, which makes me also wonder how much could they actually do? I mean, Elside was on TV everywhere at the weekend being pushed on Medicare for All, which is his bumper sticker, right?

13:41Anthony Scaramucci:Free healthcare for all Americans. What we have, you and I have always known as the NHS effectively, the National Health Service in the UK. And he was pushed on this and he said, well, yes, people, even people making less than a million dollars will have to pay a little bit more in taxes in order to get this free health care. But at the moment, I thought he made a very coherent argument, which is that at the moment, the second biggest thing that comes out of your paycheck after your taxes is money to a health insurance company whose CEO is making multiple millions. He said 20 million. I'm going to be honest.

14:19Anthony Scaramucci:I have not fact checked that, but is making 20 million. And most Americans would prefer the guarantee of health care if you move a job, if you get over the age of 26, if you have a pre-existing condition, etc. They'd like the guarantee of health care provided by the government and they'd be prepared to pay a little bit more for that. The polls are a bit fuzzy on this, depending on how you were the question. People like the idea of free health care. They don't love the idea of paying more taxes for it. What did you think of his answer? And do you think that is something that these candidates have a chance of getting through, given that any big change in American politics takes 60 senators?

14:53Anthony Scaramucci:You just have to have 60 senators voting yes on something. So is this pie in the sky when he goes around saying Medicare for all? Or is it kind of progressive economic policy that could actually happen and change the country? Personally, I think that universal healthcare is a good idea. And I am for expanding some of these social safety nets in America. But I think that what you're getting at is an arguably more important question, which is there's being right and then there's being effective. There's actually getting things done. And if you want to get things done, you do need to build a coalition.

15:25You do need to establish a sense of community in Congress. You need to build up a group and a team and you need to get everyone behind you. I think right now he's in election mode. He's trying to win an election. He's trying to come out with very bold and progressive ideas that are going to sort of inspire the populace right now, which I think is the right strategy. Because I think something that we have learned over the past few years, especially with the emergence of some of the hottest names in politics right now, is that if young people especially see you as maintaining the status quo, if you're someone who's trying to sort of be on the back foot and say, you know, we're going to continue things the way they are, that's something that young people hate right now.

16:13What they want, given what we've seen from this administration, is this idea that we are going to re-steer the nation into a different direction. We're going to do something bold, something new, something exciting. I really think that that matters in politics right now because what we've seen from Trump is such a level of corruption and such a level of mismanagement that it would be almost unreasonable to not have an outsized reaction in response. That doesn't mean that you have to come up with ridiculous policies and cancel prisons and defund the police and abolish Thanksgiving, if that's actually what the Wisconsin gubernatorial candidate actually wants to do.

16:54But it does mean having a sense of anger, having a sense of defiance and expressing that in as strong a way as you can do. And I do think that that is what he is doing right now. And I think that eventually he seems to me to be quite a smart and measured person.

17:11Anthony Scaramucci:I think he's very smart. And I think we're going to hear a lot more Obama and a lot less Hassan Piker. Exactly. Between now and November. And this guy, he understands that he only won the Michigan primary by one percentage point. That is not a ringing endorsement. He lost more voters in the primary than he won. If he'd won by 60%, I would have said, this is the new Democratic Party wave. This is the Democrats Tea Party. The fact that he only won by 1 % in a purple state gives me pause on that. And I think it needs to give his campaign pause if they want to win in November, because he's going to have to do a whole load of outreach and unity and moderation.

17:53Anthony Scaramucci:One of the things he said, Ed, over the weekend, and I'm sure you have smart thoughts on this from your world in finance. He was asked, are you a capitalist? And Abdul El-Sayed said, yes, I'm a capitalist. I'm not a socialist. I believe in the free movement of capital. But what's happened in America is not capitalism. It's corporatism, what is happening in this country right now. I thought it was a very interesting phrase. It really struck me in the course of his interview on Meet the Press. It's the idea that big corporations, Anthony talks about this a lot and he's written a book the way he talks about this that's coming out in September, big corporations buying American politicians off by donating to their campaigns in order to get the policies that make those big corporations even more profitable.

18:45Anthony Scaramucci:And what strikes me about what El-Sayed is saying is that I'm hearing this from people on the populist right as well. And I don't know that the Medicare for All gets anywhere. I think they're going to have to moderate the Gaza policies. And we can talk about that just in a second about what this lady from the DSA said about Gaza, which was also pretty shocking. I think that this idea of corporatism ruining America's politics has a lot of traction from people on both sides of the political spectrum at the moment. I think that's exactly right. And my personal opinion is the reason it has so much traction is because it's true.

19:26And I think this is something that Anthony, I think he agrees with. And I know that one of his largest criticisms of our government and our policy over the last several years, and it's one of mine too, was the enactment or the decision on Citizens United, which essentially made it legal for billionaires to basically buy elections. And that is essentially what happened. Billionaire political spending went from$16 million in 2008 to$2.6 billion in 2024. And what we have is a system that has become taken over by the richest in our society. we're seeing it play out every day we're seeing it in the deregulatory campaigns that we're seeing from the white house which in my view does amount to defund the police it's just defunding the police when it comes to uh white collar crime and that's what we've seen with the insider trading and the crypto corruption which i'm sure we'll get to in a moment and so this idea that our politics has been hijacked by a small handful of whatever you want to call them corporatists the richest, the oligarchy.

20:34I don't really mind what your label is, but when I look at what's happening in our country, I'm like, yeah, that's true. And so you're seeing a reaction on the left, you're seeing a reaction on the right. Sometimes you should get wary when the far left and the far right agree with each other. Sometimes it means something bad. In this case, I think both sides have it right. And I think it would be, I think we owe it to ourselves to be upset about this and to want to do something substantial about it. And the fact that it has become so normalized by this administration and by this president, to me, that is a real problem.

21:13And the question then becomes, okay, what do we want to do about that? Do we want to just tax billionaires? Okay, maybe it's kind of seems a little bit crude. Is there anything else that we can do? The biggest mistake that these candidates like El Saeed could do is to go so extreme that they are immediately labeled as communists and people actually believe that label. And that's what we're seeing from Fox News. Basically, the attack is these people are communists. They want to ruin America. they uh support 9-11 i saw that from mike rogers's uh press release that that that outside um believes yeah he had a meeting because of what it was it was like he had a meeting with hassan

21:56Anthony Scaramucci:piker hassan piker is this controversial streamer and he has said that america at one point he said america deserved 9-11 right he has since modified that abu side didn't disavow him and then this weekend did disavow him. I think he's getting the message on that one. Right. And that's the accusation. And so, I mean, there are some simple things that you got to do here. You need to, that's an easy one. And so that's what they have to do at this point. If they want to actually build a coalition and build a substantial base here is they need to communicate to the public that we're not, yes, we're bold.

22:35Yes, we want to change things, but we're not completely off our rockers. And there are people in the DSA who are unquestionably, undeniably off of their rockers. And so the more that they can distance themselves from that label, I think that's honestly the right move. And I think it's going to be important for these candidates that actually want to change things.

22:55Anthony Scaramucci:Listen to it, everybody, to the Megan Romer interview that David Remnick of the New Yorker did. This is the New Yorker. We're not talking, you know, some right-wing publication, But it was a really good interview in which he pushes her. I know there is so much anger in the Democratic Party, understandably, and about what has happened in Gaza and Israel and the government of Netanyahu's response to that and the genocide that is being committed there. But I don't think that her answer is helpful to other candidates who really want to focus on what working class Americans care about, which is, according to a new study from the Center for Working Class Polities, almost uniquely economic issues, except for defeating crime and bringing crime down.