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Well because on the latter with our next guest he's the best selling author. A New York Times columnist Andrew Ross Sorkin.
He discovered how credit cards are effectively being used to finance mass shootings.
And he told our Walter Isaacson that monitoring that financial activity should become a law enforcement priority.
Andrew welcome to the show.
Thank you for having me.
Yeah you're just an amazing series on guns and credit cards in the New York Times deep reporting.
Tell me what motivated you to do that.
So after the Parkland's shooting I really started to think hard about what what if you follow the money and you start to think about the role of business.
Business has been talking up their role in society over the past year or two it's something you keep hearing this narrative.
We want to we want to benefit society we want to have a purpose.
And so I started asking myself well how does business work in the context of guns and the gun problem in our society and our culture.
And one of the things you realized very quickly is that one of the fascinating choke points in the whole system is the credit card business.
And given all the information that's collected about us on a daily basis whether it's from Facebook or Google or this or that.
What are the credit card companies.
And given that the banking system for many years actually since 1970 but even more so after 9/11 has been involved in trying to protect people in terms of antiterrorism money laundering we've used the banking system for so long to protect us actually.
And I'm not sure most Americans even realize that and so then I started to think OK.
Is there a way to use the credit card system actually to help end this problem and one of the things you find out when you go look at every major mass shooting in America really since 2007 is that credit cards are how these murderers are buying these guns.
Is not just credit cards because they do what they need to stockpile a whole lot of guns.
They need a large mess and you knew it you need credit.
You need money. Because this you know each gun an air 15 is a fifteen hundred dollar project could be a 3000 dollar project.
Some of these people spent 10 20 30 thousand dollars or are planning on Armageddon.
They're buying ammunition they're buying body armor.
They're buying all of this stuff.
And so they're effectively getting the loan from the bank.
That's what's really happening.
And I'm not sure the banks really ever realized they were loaning money to people who were pursuing these types of mass shootings.
And so that was really the focal point of these stories to try to look at that and try to not only prove the connection but say OK there's a way potentially to fix this.
Right after I started writing about this after parkland the good news was a number of banks actually did take a step back.
Bank of America Citigroup said you know what we're no longer going to finance gun manufacturers.
So the next question is do you want to finance effectively the shooters and you had a way out of the 13 of the last mass killers had all gotten guns and stockpiled them by taking large amounts of credit on card.
Give me an example I think there was I mean one of the most remarkable was the Orlando pulse shooting the murder in that case spent twenty six thousand dollars on six credit cards all within a very short period of time and so had the banks been looking and had the systems been in place.
You would have seen it.
And interestingly when investigators begin trying to unravel these things after the fact the first thing they do is they go get the credit card receipts.
So if you could have actually looked at that in real time and by the way they could if they wanted to.
And that's a question whether they want to.
It is very possible that that fellow would have had a knock at his door by the police to say this is a little strange you've taken out six credit cards.
You've just spent all of this money.
What are you doing.
And that's what you that's what you need and that's what prosecutors law enforcement wish they had.
And then we have it for antiterrorism.
So we do take that.
And now the catch is that's the idea.
So right now.
Legally you decide you're going to send ten thousand dollars anywhere that gets reported to the government instantly instantly already does.
So we could instantly have reported this person just stockpiled.
Forty thousand dollars worth of weapons.
Absolutely. And by the way the credit card industry has on its own volition decided that there are certain things they don't want to find out. So if you want to buy bitcoin you can't.
Marijuana in many states is legal.
MasterCard interestingly recently went to a Web site that had some hate speech on it and said we're no longer going to allow you to use credit card transactions using MasterCard because of this hate speech. So there are companies that are taken positions if you will on some of these things and the question is how that can work in relation to guns.
Apple Apple Pay Pay Pal Stripe Square. These are all payment systems there to have policies that say we're not actually going to transact on guns.
I'm going to sincerely suggesting there be no transactions on guns at all.
But if the credit cards and the banks understood what was being bought they could make some decisions they could maybe say OK you know what.
You're under 21 years old.
We want to look at this in a different way.
I mean how many times have you stopped at a gas station somewhere and your credit card hasn't worked because they need to make sure it's you right.
Nobody's doing anything like that when it comes to the sale of guns and you could have a system where somebody is stockpiling huge amount huge and nobody would know.
Yeah we have laws in this country already that they're really old laws that say if you buy more than two guns from one store it gets reported to the ATF.
That never really took into account that if you were to go buy 20 guns online from 20 different stores or if you would go from this Wal-Mart over here 10 miles to this Wal-Mart doesn't get reported.
The only people who actually have the data are the credit card companies.
And so the question is sort of how you can mobilize them. Having said that I should say there's been a lot of great feedback from the series of articles.
Number states are now looking into this to see what they can do federally.
Very difficult. But also lots of pushback people say anger.
If you're going to if you're going to start pushing on guns what about alcohol what about a young person who's under 21 years old.
You would the credit card company should know that they're at a bar when they're 18 years old maybe they shouldn't allow that transaction.
All sorts of things where they say there's a slippery slope.
My view is at this point in the ballgame adding any kind of friction to the system to try to prevent these kinds of things is valuable.
So I would do it.
You know the slippery slope argument doesn't work for me because all slopes are slippery.
Yes. The question is What do you draw the line.
Wouldn't this be an invasion of privacy though.
And look there are libertarians who make that argument.
There are people from the ACLU who would make that argument and then of course people who are the NRA and others who would say this this is an invasion of privacy I would suggest to you that your privacy has been invaded a long time ago.
And the question is for certain types of products and certain types certain types of things in this country even legal products.
We've decided that we want to keep track of them. And the question is do we want to keep track of guns.
Obviously there's been a huge movement to try to prevent keeping track of guns and this would do do that to some degree. But I don't think this is about creating some kind of master list.
I think this is about trying to look at trends using machine learning and algorithms to say OK this individual just bought 10 guns.
And by the way if you're a hobbyist or an enthusiast you just bought 10 guns.
I think it's fine if you get a phone call and I think you should be able to say I'm a hobbyist and you can explain it.
And by the way the bad news is there probably would be some very clever murderer who will talk their way out of a conversation with the FBI or something. But I think at least you want to have the information up front.
If you could this get into a larger theme that you write about quite often which is the social responsibility of corporations and business.
In the age of Trump in particular Larry Fink has been writing about it and yet there's a lot of talk about corporations should have a mission more than just serving their shareholders a you know should help society their communities their stakeholders.
Where do you come down on that and how would you push corporations to be more responsible.
Well look this is this is the ultimate sort of Milton Friedman question about profits and what the goal of capitalism is supposed to be and what's happened to our culture and our society over the last three or four maybe even five decades now and even what's happened to the American dream and what the role of the company used to be in a community whether it be charity whether it be your retirement and a pension that you actually thought you were going to get all of the anxiety that we have today I think has risen it stems in large part from a break down in all those things.
And so the question is What can companies do. What are their responsibilities.
And in an environment where Washington appears I hate to say leaderless on so many issues whether it's CEOs going to that conference in Saudi Arabia I ended up stepping back from another of a lot of CEOs had to step back from that and make that decision on their own.
Used to be in the old days the president or his or government would say you know we have a problem with what's going on in Saudi Arabia.
We don't want our business leaders going there.
And so you wouldn't have to take.
But but but I think we're in a moment now where CEOs are having to step out after Charlottesville.
You saw Ken Frazier who ran Merck get off the President's Council and then this barrage of CEOs just all all leave and also speak out.
So I think you're sort of getting to this point where a how did they interrelate with the political world.
But also this other issue which is whether it's retirement whether it's.
How they deal with their employees the power of employees somehow you know even though we don't have unions the unions don't have the same kind of power they used to in Silicon Valley employees are running these companies. I mean think about Google the Google employees effectively press the company to no longer do business for certain kinds of things with the Pentagon.
That's fascinating and sort of how companies and leaders are trying to map that out.
And lots of hard decisions by the way.
You mentioned a moment ago.
MILTON FRIEDMAN Yeah and Milton Friedman many decades ago started the shift in the US role of what a corporation should be.
When he wrote that they shouldn't be valved and worrying about communities and corporate responsibility or even employees.
And there are other stakeholders.
They have simply one mission and that mission is to do a return on investment for shareholders and that sort of got incorporated into everything.
But I think what you're seeing is the backlash and you're seeing it. And the reason why Larry Fink who runs BlackRock largest investor in the world six trillion dollars they effectively oversee through four Wednesday plans and everything else.
He's he's seeing the problem and he's seeing it directly in his own investments which is if you're Facebook.
All of a sudden you haven't been spending enough time thinking about some of these other stakeholders customers being one of them.
And privacy issues.
And Washington and regulators Well if you don't think about those things all of us and that's actually going to come back and impact your stock price your earnings whether advertisers want that.
So it is interrelated and I think that's I think the piece on what Larry Fink and others are saying is all of the stakeholders actually do matter and they matter to profits.
Profits for profits sake if you just go down that line you're missing it because at some point you're going to run up against a wall of these other constituents and if you haven't figured that piece of it out it's actually going to impact the profit piece.
This gets back to your book Too Big To Fail you're talking about the 2008 crash.
To what extent do you think that crash and American peoples view of corporations has led to this populist backlash we feel now.
You know I think there's a straight line between the 2008 crisis and the election of President Trump.
To me it's it's obvious.
The financial crisis was a moment at which all of a sudden we questioned as a society.
Institutions companies government the idea of experts the idea that there are people who we think are supposed to be expert and yet all of them.
By default let us down a path that didn't work and because of that there was this huge rise in populism and divisiveness in this country a real sort of cleaving of America and you know a lot of people look at whether it's the Tea Party or Occupy Wall Street as part of that. But I think that you know after every financial crisis in the University of Chicago Booth School did a great study on this.
The electorate gets radicalized and I think that's where we are right now.
And then the overlay on top of all of this is what effectively it's not really about the finish the financial crisis itself.
I almost think that that's become a symbol of something that's almost misunderstood which is that really what's happened is debt that the debt and leverage that led to the financial crisis for so long papered over the much larger problems which we still haven't dealt with at all which really is about you know wage stagflation and really is about the lack of mobility in this country and really is about the true underlying American Dream and whether that's challenged what can we do about wage stagnation.
Well that's a I wish I had a great answer for you.
You know is that really about the minimum wage is that really about trying to somehow drive additional growth from companies that about unions.
Is it about offshoring jobs or is it about biology.
I think it's I have a view which is and I it's fatalistic.
I have a view unfortunately that the quote unquote American dream that we all talk about which is really the Leave It to Beaver American dream of the 1950s and 60s which by the way was a very white dream.
It did not incorporate minorities in the same way that it might have actually been an aberration that if you really think about what happened to our economy after World War II we were the only game in town.
We had a monopoly on the world for years and it wasn't really till 1980 that the rest of the world all of a sudden was competing against us.
And so during this period we were able to charge monopoly rates.
It was great for the labor movement.
We were able to do all sorts of fabulous things.
If you graduated from school you would get a job you would get a spouse a house a dog enough pick an advance and a pension plan health.
Then it all made sense.
But the speculation began in 1980.
By the way that's the same time period when the rest of the world all of a sudden started competing against us and now we're competing against people in India and China and Germany and everywhere else.
And that I think is a I mean that that that competition I think has actually created a real challenge for us.
And part of it part of that competition came from people like you and me who believed in globalization and believe that trade was great.
We believe that the free flow of people in immigration was great.
And now there's a huge backlash from Budapest to Britain to the United States.
Against that will we were wrong to think that free trade would benefit everybody.
I think we will.
I don't think that globalization.
In the whole is a bad idea.
I think that we misunderstood its benefits and misunderstood than the allocation of how those benefits would get allocated and therefore then you have to rethink a little bit of the system and then that goes to taxes and goes to where people are domiciled. I mean there's lots of ways to get at this.
To quote fix it.
The scary part is I don't think there's a fix a true fix that gets you back to this 19 50s 60s American dream.
Leave it to Beaver idea anytime soon.
That's Andrew Ross Sorkin from The New York Times. They're weighing in on the globalization
About This Episode EXPAND
Christiane Amanpour talks with Ali Soufan & Lawrence Wright about the Middle East; & director Spike Lee about his film “BlacKkKlansman.” Walter Isaacson speaks with Andrew Ross Sorkin about how credit cards are being used to finance mass shootings. *A bill discussed on this program as having passed through the House of Representatives ended up being delayed in Congress. We apologize for the error.LEARN MORE