--:-- [Upbeat music fades out]
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--:-- John Bickley: Americans are racking up record levels of credit card debt. What items are leading consumers to swipe their way into the red?
--:-- Georgia Howe: I'm Georgia Howe with Daily Wire editor-in-chief John Bickley. It's August 13th, and this is your Saturday edition of Morning Wire. College athletics are undergoing massive changes that have sweeping financial implications. What this legislation means in these states and what the NCAA's policy means is that student athletes can sign endorsement deals. And California's electric vehicle rebate programs were designed to help low-income people have access to electric cars. But the initiatives are facing significant setbacks.
--:-- Colton: Hey everyone, producer Colton here. Back to school season is upon us. And while many kids are excited to get back into the classroom, many may not be able to access and afford nutritious meals to fuel their growing minds. That's why Good Ranchers has made it their mission to donate 100,000 high-quality meals this month to children in need. You can help them reach their goal by ordering your next box at goodranchers.com slash wire. Help them donate 100,000 meals and get $30 off plus free shipping at goodranchers.com slash wire.
--:-- John Bickley: A new report from the Federal Reserve shows that Americans are more in debt now than at any other point on record, as the cost of essential goods and services continue to skyrocket. Here with the latest on this grim milestone and what's driving the debt is Daily Wire senior editor Cabot Phillips.
--:-- Cabot Phillips: So, not the kind of record that we want to break. What kinds of numbers are we looking at here?
--:-- Cabot Phillips: So on Friday, the Federal Reserve announced that in the month of June, Americans racked up $40 billion worth of debt, nearly double the amount we saw the month before. So things are getting worse very quickly. In total, U.S. household debt for the first time ever surpassed $16 trillion last month. For context, that's larger than the GDP of every country in the European Union combined. It's a lot of money, and it's credit card debt leading the way right now. Last month saw a 16% increase in that department, and that's following a 7% increase the month before. In total, Americans now hold about $890 billion in credit card debt. That's more debt than we saw at any point during the 08 financial crisis. So after a period where we saw fairly steady debt accumulation over the last few years, things have really picked up, accelerating faster this year than at any point in the last two decades.
--:-- Cabot Phillips: So what's causing debt to accelerate? Is it just inflation?
--:-- Cabot Phillips: Yeah, that's the number one factor, especially with regard to credit card debt. The hot housing market that we saw during the spring and summer also played a role in overall debt as record home prices led to increased mortgage debt. But it's no coincidence that we're seeing record inflation and record debt at the same time. According to the New York Federal Reserve, quote, Americans are borrowing more, but a big part of the increased borrowing is attributable to higher prices. So the higher prices are catching up to people at this point.
--:-- Cabot Phillips: Exactly. And what especially concerning is not just how much debt is being amassed but what people are going into debt to pay for. Not all debt is the same. It be one thing if this was happening just because people were going into debt for housing or education. But this year people started increasingly going into debt just to pay for essential goods like groceries and gas.
--:-- Cabot Phillips: In total, non-housing-related debt went up $103 billion last quarter. That is the largest quarterly increase since 2016. And again, it's also worth noting how people are amassing that debt.
--:-- Cabot Phillips: Well, we now know that a record number of Americans are opening new lines of credit to try and get by. Between April and June, Americans opened 233 million new credit card accounts. That is the most for any three-month period since 2008, which is obviously a time when the economy was in a free fall. So not a good precedent there. And while delinquency rates are thankfully lower than what we saw during the 08 crash, they're still on the rise, especially among young people and lower- and middle-class households. They're really being hit hard. And remember, a number of COVID era moratoriums that prevented repossessions and foreclosures during the pandemic are expiring or have already expired. So that could start a chain reaction as people inevitably start defaulting on their payments.
--:-- John Bickley: Cabot, thanks so much for reporting.
--:-- Cabot Phillips: Anytime.
--:-- John Bickley: That's Daily Wire senior editor Cabot Phillips. Coming up, college athletics undergo sweeping changes.
--:-- John Bickley: Do you like to be the first to know about trendy news and current events? If so, you got to get the Daily Wire Plus app. Not only will you receive mobile notifications whenever something's happening, but you'll also have access to the best commentary to break it all down. Download the Daily Wire Plus app and keep up with the facts no matter where your day takes you.
--:-- John Bickley: College football, which contains some of the most lucrative franchises in all of sports, is gearing up for a new season. But it looks very different than it has in the past. There have been several significant developments since last season, including conference realignment and name, image, and likeness deals that have completely transformed the sport. Here to discuss the changes is sports writer, Crane & Company co-host, and former University of Michigan quarterback David Cohn.
--:-- David Cohn: Thanks for joining us, David.
--:-- David Cohn: So should college football fans be concerned this season with how much the sports landscape is changing?
--:-- David Cohn: This upcoming season, no, there shouldn't be much concern. Well, I guess that largely depends on which teams you pull for. We are set for another great college football season with many of the traditions we've come to know and love. Moving forward, however, college athletics is going to look different for better or worse.
--:-- David Cohn: The most popular topic over the past year has been name, image, and likeness, or NIL as it's often called, which allows college athletes to be compensated for their likeness. Now, many people, myself included, have been in favor of NIL for some time. The problem now is player compensation has essentially become pay for play, in which recruits are paid to sign with schools. This is entirely different than signing a deal to appear in an advertisement, for example.
--:-- David Cohn: Yeah, I think a lot of people have been caught off guard by how this is actually operated, how it's played out. It really has been a sudden rush to lucrative deals for these students. There have been no guardrails and no leadership. And no guardrails.
--:-- David Cohn: Another issue, which just is problematic, is the state of the transfer portal. When I played college football, the rule was you had to sit out a season after transferring to a different Division I conference or sit out two seasons if you transferred within the same conference. Well, last summer, the NCAA passed a ruling which allowed players to transfer one time penalty free. But now John there are considerations by the powers that be to allow unlimited transfers with immediate eligibility Now nothing is final on that front as of yet but an unchecked transfer portal combined with the ability of schools to offer large sums of money in exchange for commitments, opens the door for collusion we don't even see at the professional level.
--:-- David Cohn: Right. It really sounds like a disaster waiting to happen. No doubt. It also sounds like lawsuits are coming. Do we expect legal action in response to these changes?
--:-- David Cohn: It would be surprising if there are not any lawsuits filed in the coming years, especially if certain schools aren't able to live up to these commitments they're making to recruits. That would certainly be a breaking point. But hopefully any situation like that can be avoided.
--:-- John Bickley: We had Representative Jim Jordan on our show, Craning Company, recently, and we asked him about these changes. He was hopeful that college athletics could solve these issues without government involvement.
--:-- David Cohn: Yeah, there's already been some talk about whether Congress should get involved. Exactly.
--:-- John Bickley: Now, conference realignment has also been a hot topic this summer. Should we expect any more major moves before the season starts?
--:-- David Cohn: I doubt we will see further developments now that we are this close to the season. Remember, Texas and Oklahoma announced a year ago they would join the Southeastern Conference by the year 2025. That was followed with big news this summer that Southern California and UCLA will be joining the Big Ten Conference by the year 2024. Those are four marquee programs that will soon compete in new conferences. And really, the reasoning all comes down to TV revenue. ESPN and Fox are the two frontrunners as it relates to college football. And clearly, those networks want to grow their offerings as best they can. And what that means for the future of the Power Five conferences or college athletics writ large remains to be seen.
--:-- John Bickley: Yeah, well, a lot of people, I think, are a little uneasy about all these changes. But regardless, I think most college football fans just want the season to get started.
--:-- David Cohn: No doubt.
--:-- John Bickley: David, thanks for coming on.
--:-- David Cohn: Thank you.
--:-- John Bickley: That was sports writer and co-host of Crane & Company, David Cohn.
--:-- John Bickley: The Biden administration is pushing hard for Americans to transition away from gas-powered vehicles to electric, and California is attempting to lead the way on the issue, creating incentives for citizens to make the jump to electric cars. But the state's program is proving more difficult to implement than lawmakers expected. Californians are struggling to take advantage of the state's electric car rebate programs, as some of the initiatives face problems with funding and pileups. Here to discuss is Daily Wire's Charlotte Pence Bond.
--:-- Charlotte Pence Bond: So California is pushing to ban new sales of gas-powered vehicles by 2035, but there are a few really big challenges to that goal. The biggest challenge is the cost of electric vehicles. The state has implemented a variety of rebate programs for electric vehicles, but even with the programs, electric vehicles are still prohibitively expensive for a lot of residents.
--:-- Charlotte Pence Bond: Another issue is that some of the rebates only apply to residents below certain income levels, and they're targeting income levels that are often too low to realistically purchase a new electric vehicle as costs rise, even with a rebate. The average price of an electric car is $66,000, and new ones can range anywhere from $25,000 to $180,000. Even at the low end, that's a pricey vehicle for a lot of the lower-income families.
--:-- Charlotte Pence Bond: Another issue is funding for these programs. Some of that funding dried up in April and wait lists have been stopped because of backlogs. For example, the Clean Vehicle Assistance Program is one of them. It closed its doors to new applications because of its pileup. The Clean Cars for All programs also closed down in a few regions because they didn't have the funding but have reopened in other areas for applicants
--:-- Charlotte Pence Bond: So have these programs had success in getting middle and lower income people into electric cars? It's been mixed. Eric Mulliger an associate professor of economics at UC Davis, told CalMatters that the programs were kind of useful in helping get people to buy electric cars prior to COVID, but with the spike in cost, the initiatives are really facing problems.
--:-- Charlotte Pence Bond: One Air Resources board official said that higher income groups have been more successful making use of these programs, but the money dried up before really serving many of the lower-income groups.
--:-- Charlotte Pence Bond: Now, what about infrastructure? Is California ready for everyone to be driving electric cars? Not yet, although coastal cities are farther along than rural cities in terms of charging stations. CalMatters reports that around 1.2 million chargers will be necessary by 2030, since around 8 million clean cars are expected to be on the streets. But California state data reveals that only a little over 200,000 are currently available or coming soon. So they still have a lot of work to do. That also doesn't take into account the electric grid, which would be much more heavily taxed by all those cars.
--:-- Charlotte Pence Bond: Last year, the California Independent System Operator asked people to conserve energy during certain times and not charge during peak periods. The reliability of the grid hasn't been strong in recent years, and it could get even worse if more stress is placed on it.
--:-- John Bickley: Now, thus far, we've only discussed California, but the Biden administration has also pushed for some similar green goals. Are we seeing similar incentives at a federal level?
--:-- Charlotte Pence Bond: We're starting to. With the new Inflation Reduction Act that the Senate passed, tax credits will go towards certain electric cars, but a lot of cars won't qualify. Ford Motor said this week that it is hiking its prices of one of its electric cars, mostly due to the price of batteries. The cars will cost $6,000 to $8,500 more now, which basically cancels out the savings that consumers would get from the rebate.
--:-- Charlotte Pence Bond: The Biden administration has really pushed for electric cars to become the norm, and some have suggested that high gas prices are an argument for people to go out and buy electric cars. Here's Transportation Secretary Pete Buttigieg just last week. The best thing we can do for the medium and long term is make sure Americans have more options through greater fuel efficiency and greater access to vehicles that don't require gasoline at all so that Americans don't have to worry about what's happening in some Middle Eastern capital or foreign war zone.
--:-- John Bickley: While a lot of people might like to have an electric car these days with the national average of gas just under $4, the reality is a lot of people can't afford it. And it remains to be seen whether these rebate programs will move the needle.
--:-- Charlotte Pence Bond: Interesting. Well, 2035 is not that far off. We'll see if they reach that goal.
--:-- John Bickley: Charlotte, thanks for reporting.
--:-- Charlotte Pence Bond: Thanks for having me on.
--:-- John Bickley: That was Daily Wire's Charlotte Pence Bond.
--:-- John Bickley: Other stories we're tracking this week. A South Florida court has released the search warrant and the list of items removed from President Trump's Mar-a-Lago home. He is being investigated for potential violations of the Espionage Act and obstruction of justice.
--:-- John Bickley: Author Salman Rushdie was attacked in western New York as he was about to give a speech on Friday. His 1988 book, The Satanic Verses, was considered blasphemous to the Muslim religion and led the Iranian leader, Ayatollah Khomeini, to put a $3 million bounty on his head.
--:-- John Bickley: A small plane with engine failure crash-landed Wednesday onto a busy California freeway between two cars. There were no injuries.
--:-- John Bickley: Hey, thanks for listening to Morning Wire. We created this show to bring more balance to the national conversation. If you love our show and you stand with our mission, consider subscribing, leaving us a five-star rating, and most importantly, sharing our podcast with a friend.
--:-- John Bickley: That's all the time we've got this morning. Thanks for waking up with us. We'll be back tomorrow with the news you need to know.
