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U.S. Fighter Jets Shoot Down "High-Altitude Object" Over Alaska; Is America Sleepwalking Into WWIII?; "PredictIt" Battling Regulators To Allow Political Betting Site; Mahomes, Hurts Are First Two Black Quarterbacks To Face Off At Super Bowl; FTC Seeks To Ban Non-Compete Clauses, Which Affect 30 Million Americans. Aired 3-4p ET

Aired February 11, 2023 - 15:00   ET



MICHAEL SMERCONISH, CNN ANCHOR: I'm Michael Smerconish in Philadelphia. For the second time in less than a week, U.S. fighter jets have shot down an object in U.S. airspace. On Friday, President Biden gave the order to shoot down a, quote, high-altitude object hovering 10 miles off the coast of Alaska. Of course, last Saturday fighter jets shot down a suspected Chinese spy balloon in the Atlantic Ocean after flying across the entire country.

Joining me now to discuss is Retired Air Force Lieutenant General David Deptula. He was the Air Force's first Chief of Intelligence Surveillance and Reconnaissance. He's a fighter pilot with more than 3,000 flying hours. He was the principal attack planner for the Operation Desert Storm Air Campaign, Commander of no-fly operations over Iraq in the 90s and served on two congressional commission's focused on America's future defense strategy.

These days, he's the dean of the Mitchell Institute for Aerospace Studies. General, thanks so much for coming back to the program. So what is NORAD responsibility? And what's the framework through which it determines a course of action?

LT. GEN. DAVID DEPTULA, U.S. AIR FORCE (RET.); DEAN, MITCHELL INST. FOR AEROSPACE STUDIES: Well, Michael, it's good to see you again. It's been quite a week for the commander of North American Air Defense Command. Essentially, their responsibility is to provide aerospace warning, ensure air sovereignty, and then protect the Canadian airspace as well as the continental United States. So they've certainly had their hands full in these past two weeks.

SMERCONISH: Of what significance in this instance is the altitude?

DEPTULA: It's a great question. And that's what the differentiator was between the Chinese spy balloon in this particular undesignated flying object so far. And that this object that was shot down yesterday was about 25,000 feet lower than the Chinese balloon that entered U.S. airspace about two weeks ago. So that puts it at about 40,000 feet. And that makes it a possible collision hazard for commercial airliners. So that was the logic for shooting it down once it was identified as being uninhabited. SMERCONISH: Are there other civilian objects, other meaning beyond aircraft, commercial aircraft at that level? I'm trying to ask and not be so naive, but how much stuff is floating around at that height?

DEPTULA: Well, not a lot. I mean, but 40,000 feet is particularly over Alaska. One might think, well, geez, Alaska is way out of way of everything. But when you think about it, airliners fly, what are known as great circle routes. So when you have airline traffic going from the East Coast of the United States, say over to anywhere in Asia, Japan, China, Australia, Thailand, India, they head over Alaska.

So it is a concern that any object flying in that airspace, particularly if it's not controlled, like it appears this one wasn't. Quite frankly, the classification of this object is pretty quizzical. Because first there has been no indication of its origin. Second, it was described in the short news conference that the Pentagon had is not resembling an aircraft.

But then again, they didn't confirm that it was a balloon. So it will remain an unidentified flying object until we get further verification of what it might have been.

SMERCONISH: Still more unknown than known. General Deptula, thank you so much for coming back. I'm not sure if I'll see you next week at this time, but keep your schedule clear if you can.

DEPTULA: Yes, sir. You have a great day.

SMERCONISH: Now is America sleepwalking into World War III? A Ukrainian Security Official is warning Russia is preparing for, quote, maximum escalation in the war. And just yesterday, Russia launched a massive attack on Ukraine's already damaged infrastructure temporarily knocking out a third of its heat and power plants.

The Washington Post reporting the Pentagon is urging Congress to resume funding to top secret programs in Ukraine that were suspended ahead of Russia's invasion. That report adds this, quote, "Critics, including some on Capitol Hill, say such activities risk drawing the United States into a more direct role in in the Ukraine war."


Is that a valid worry or are we in denial about how involved America already is in the war? We're coming up on the one-year anniversary of Russia invasion of Ukraine, which President Biden will mark with a trip to Poland. All along, the U.S. has been helping out with financial aid and weaponry, doling it out, however, in increments, while always drawing a line, and then usually crossing that line.

As Ukraine's defense minister has remarked, all types of assistance at the beginning went through the no stage, which means no as of today. Last February 25, the day after the invasion, President Biden authorized 350 million in security assistance for Ukraine. This included anti-armor, small armors and various munitions body armor, as well as Stinger anti-aircraft missiles. Then in early March, Poland, offered to give its MIG jets to the United States to transfer to Ukraine, but the U.S. declined. Instead, the U.S. approved another $200 million in arms and equipment reported to include the javelin and Stinger missiles. Then on March 16, after Ukrainian President Zelenskyy addressed Congress, the Biden administration announced $800 million in additional weapons including helicopters, switchblade drones and 70 multipurpose vehicles. Then came laser guided rocket missile systems. And by the middle of April, the total U.S. commitment of security aid was around $3.5 billion since the start of the war.

Ukraine repeatedly asked for Patriot missiles and after 10 months of not fulfilling the request, the U.S. announced in December that it will now be sending them. But the Pentagon said that it would not be sending Ukraine Abrams tanks because they're complicated, expensive and hard to train on.

Then in January, the Pentagon confirmed it would provide Ukraine with 31 M1 Abrams tanks, meaning Germany would also send tanks. Within weeks, more billions, Bradley infantry fighting vehicles, air defense systems and Stryker armored personnel carriers. February 3rd's package included ground launched, small diameter bombs.

All told since the invasion, the United States has invested nearly $30 billion in Ukraine. So when does all of this add up to actually being at war with Russia? Will the Pentagon again reverse itself and send F- 16 fighter jets? Are we just for stalling the inevitable and what's the best path forward?

I asked that a former NATO Supreme Allied Commander, the Retired Admiral James Stavridis on my Sirius XM radio program this week.


SMERCONISH: Final question for Admiral Stavridis, should we continue to roll out our aid incrementally, or do it more swiftly?

UNIDENTIFIED MALE: Yes, that would be a good question for the Smerconish question of the day.

SMERCONISH: Wouldn't it? Thank you.

UNIDENTIFIED MALE: Yes. Jim Stavridis votes for throw the kitchen sink at it now.


UNIDENTIFIED MALE: And we have been to incremental, too timid, today. And it -- all it has produced is more aggressive activity on the part of Russia. Now is the time to really hit the has.


SMERCONISH: OK, I want to know what you think, go to That is the poll question of the week, "Should U.S. military aid to Ukraine continue to grow incrementally, swiftly, or not at all? Joining me now to discuss is Jon Sweet, a Retired Army Colonel. He served 30 years as a military intelligence officer, lead the U.S. European Command Intelligence Engagement Division from 2012 to 2014. And recently co-wrote this piece that caught my eye in the hill with economist Mark Toth.

Is the Biden administration late to World War III? Colonel thanks for being here. You've written that a dystopian form of World War III is already upon us. What exactly does that mean?

COL. JON SWEET, U.S. ARMY (RET.): Well, thank you, first of all, Michael, for having me on the show this morning. You know, Mark Toth and I appreciate the opportunity to come on in talk about Ukraine.

Look from my perspective, as somebody other guests have said, we're already decisively engaged in this war. We don't have boots on the ground, obviously. But we are committed, we're committed in resources, we're committed in humanitarian assistance. We're committed and intelligence and we're committed in logistics.

So we're all in. But it's not just us that are all in, it's NATO, it's the European Union. In on the Russian side, it's Belarus, it's China, it's Iran and it's North Korea. So it is a world war that's contained to within the borders of Ukraine. The combatants, of course, are Russia and Ukraine, with a mixture of mercenaries from the Wagner group have also seen forces from Chechnya and in volunteer fighters that are coming in on our own to support either side.

So it is a world war. We are engaged. But unfortunately, as you also said previously, it's a defensive war and its big hold that from the first day.


It's defend. It's unite, its deterred aggression, it stand beside Ukraine to the end is protected the sovereign territory. It's all those things. But until it becomes when, until it becomes when this war and those words are just uttered on 8th February by the French President, nothing's going to change.

It has to be when, it has to be in a was admirals and you have to enable with offensive capability to reach out and strike targets that are striking Ukraine, those missiles that you talked about the cruise missiles and the drones are not being fired from within Ukraine or being fired from Belarus, the black sea, the Sea Azof and being fired from Russia. So until you can affect the battle that's affecting you, you're playing whack a mole on the battlefield.

SMERCONISH: It didn't feel all in to me the other night watching the State of the Union address. I mean, from my perspective, the State of the Union address was largely about domestic issues, the interplay with Republicans in the House about entitlements. That was the headline.

The first reference to Ukraine, as best I recall, didn't come until pretty late. In the speech, the President said it's a battle for the ages or words to that effect, Colonel. What's your thought? I mean, if we're all in, does the White House need to be telling the American people like, hey, this is real, and we are all in?

SWEET: Well, we have to prepare the American people for a long-term conflict, because defensive battle is perpetual battle that just goes on. It goes on until it stops. And (INAUDIBLE) -- I mean, Putin has already acknowledged. He's going to immobilize another 500,000. He wants to expand his military to 1.5 million, and he wants to win the war in Ukraine. So he's going to continue to commit forces in Ukraine.

And we're going to continue to commit, you know, weapons and ammunition intelligence to Ukraine to defend themselves. And it's worth out in. It's exactly what the President told us a year ago that he no longer want to give it the United States to war survive in, a grant. We're not boots on the ground. We're not losing Americans. But we are invested in financial issue said millions of dollars, billions of dollars.

And where does that end? If we don't have a strategy in end state. Right now, we don't have a clear end state. The end state just to survive. It has to be to win, that we didn't hear that in the speech last night or on Tuesday.

SMERCONISH: What's your answer to my poll question of the week? This incremental approach is a time for instead, as Admiral Stavridis says, to throw in the kitchen sink?

SWEET: I agree. It's time to enable them with with every system that we can. Look, they can't sit back and continue to absorb. They have to be able to get out and maneuver and dictate and shape conditions on the battlefield. They have to be able to hit those troop formations before they arrive on the battlefield, not wait for them to come and they have to do that with ATACMS, with what we talked about the ground launch -- small diameter bombs, harpoon missiles to reach the Russian ships that are firing from the Black Sea.

But they need to be that full suite. And if we're not going to give F- 16, let's take Poland up on the MiG-29. Let Poland get the MiG 29 Ukraine. Let's back (INAUDIBLE) with the F-16.

SMERCONISH: President's headed there this month to mark the one-year anniversary. Colonel, thank you so much. I appreciate it the piece you wrote in The Hill, and thank you for being here to discuss it.

SWEET: Thank you very much, sir. Appreciate the time.

SMERCONISH: Make sure you hit me up on social media. Now tell me what you're thinking as the program progresses. I'll read some throughout the course of the program. This comes from the world of YouTube, I think. "My fear is that the more we support Ukraine, the more desperate Putin becomes the greater the risk of Putin using nuclear weapons."

Joseph Abrams, I don't have an informed opinion on this, I don't know. But from the sidelines, just speculating. It seems as if this incremental approach is predicated on a belief initially that we're going to give Ukraine what they needed to resist. And then because of the strength of the Ukrainian fighters, more of a mindset has become, hey, they can win this thing. Although we have to define what winning is.

And along the way, it seems that the concern over Putin going nuclear has diminished. It's what it seems like to me for many thousands of miles away.

I want to know what everybody thinks. Please vote on this week's poll question at Every time we've asked about Ukraine in the past, I just want to note this, like the most militaristic hawkish response has carried the day. But I like to continually ask these questions to take everybody's pulse.

Let's see where it goes today. Should U.S. military aid to Ukraine continue to grow incrementally, swiftly or you might say not at all?

Up ahead, it's the biggest weekend for sports gambling. But what if instead of betting on the Eagles taking homes to the Super Bowl, and overtime, hypothetically, you can bet on whether the GOP will retake the Senate in 2024. It's technically illegal, but my next guest found a workaround. Now the government is trying to shut his website down.

And the free freedom to change jobs.


Why the Federal Trade Commission wants to ban non-compete clauses saying they harm the U.S. labor market.


SMERCONISH: It's the biggest betting weekend of the year. Gamblers in the U.S. expected to better record $16 billion on Super Bowl 57. That's more than last year's record. But should Americans also be allowed to bet on political outcomes?

Commercial political gambling is illegal in the U.S. but the popular betting site predicted found a workaround. And now the government is trying to shut it down. The legal battle is currently playing itself out in federal court. The U.S. Court of Appeals for the Fifth Circuit heard arguments this week on whether predicted can keep operating.

Think of it like sports gambling but on political outcomes. Joe Biden, for example, currently trading at 60 cents a share to be the 2024 Democratic nominee. If that happens, people who bought a stake in him can sell each share for the full dollar. Donald Trump currently trading at 37 cents per share to be the GOP nominee tied with Florida Governor Ron DeSantis.

My next guest John Aristotle Phillips created PredictIt in conjunction with Victoria University of Wellington, New Zealand.


The federal agency that regulates the markets, the Commodity Futures Trading Commission or CFTC allowed the market originally with a no action letter, meaning it could run as an academic exercise.

So predicted has been operating under restrictions, bets are capped at $850 limits, no more than 5,000 people can be in any given market at a time. No contracts are allowed on sports or if somebody's going to die or get kidnapped. But now the CFTC wants to shut the market down saying that it's expanded beyond its educational roots.

Phillips is fighting back. And by the way, he has a most unusual backstory. He first became famous in 1976 as the a-bomb kid, when as a Princeton undergraduate, he created a 34-page how to guide for building a nuclear weapon using publicly available information. In 1978, he co-authored a book about his exploits called "Mushroom" The Story Of The A-Bomb Kid."

John Aristotle Phillips joins me now. John, good to see you. So why is this legal where in the United States generally we prohibit wagering on elections?

JOHN ARISTOTLE PHILLIPS, FOUNDER & CEO, "PREDICTIT": Well, first of all, Michael, thanks for having me on. It's good to be back on actually. So this is specifically permitted under no action relief granted by the agency eight and a half years ago to Victoria University, and to predict it to enable small dollar wagers on future political events. So it's specifically permitted.

The question is why is the government trying to take away that permission at this time? We've got 80,000 traders in the overall and all the markets. And as you say, there are specific limits. These are small dollar forecasts, and it is a collection of educators and traders and others who are suing the government to prevent the revocation of that permission. There is no reason that is --

SMERCONISH: Is the concern that this could corrupt the process if it were made more widespread?

PHILLIPS: Well, we don't know the reason because the CFTC has never specified a reason for revocation and that is illegal. You know, government agencies under the administrative procedures that need to specify they need to give an opportunity for whoever they are trying to shut down or interfere with, to correct whatever the alleged problem is.

None of that was offered in the case of PredictIt, it was abrupt, it was capricious and arbitrary. So whether there's a concern about the impact on elections or not, it's hard to see how in a democracy like the United States, we get billions and billions and billions of dollars being spent on political campaigns, with hundreds of millions of people participating at the polling place, how a small dollar wager or forecast would negatively affect.

In fact, I would say, Michael, that it's a positive impact. Because the studies show that these people who have a little bit of skin in the game, whether it's a sporting event or a political event, they pay more attention to the political news. And they are more likely to be able to filter out fake news, which is a much bigger threat to our democratic process than tiny predicted. SMERCONISH: John, is there anything to be learned from these markets? I want to put a couple of things up on the screen. First of all, let's talk about the GOP 2024 nomination fight. Like the polls that I've seen say that right now, in a multi-candidate field, it's like Trump at about 50 and DeSantis at 25 to 30. But in your market, it's 37 cents and they're deadlocked.

Now I'm going to put up another one. Which party wins the presidency in 2024? Democrats, 51 cents, Republicans 50. And finally, 2024 presidential election winner Joe Biden, 34 cent. Now look, DeSantis ahead of Trump, 29 cent versus 26 cent.

The pollsters, you know, do modeling, right? The pollsters want to make sure that they've got demographic balance, geographical balance, gender balance, I don't know who's betting on this site. But do you think that these folks who are wagering know a little something?

PHILLIPS: Oh, I think that the -- I mean, look, markets are very predictive of future events, whether it's the price of oil a year from now, or, you know, what the, you know, how many hurricanes are going to be? Markets are very effective. That's why the stock market is so accurate.

It's not -- markets aren't perfect and PredictIt is not perfect and forecast in the future but vastly outperforms public opinion polling. Polling is great if you want to understand why people feel the way they do. But they're not -- it's not so good in terms of forecasting future events. Markets, they generally beat polling for accuracy consistently.


And that's why there are more than 100 universities that are using the anonymized trading data to understand what makes for a super forecaster. Why are markets so predictive? What -- sometimes markets aren't predicted? And why is that? So there's a lot of research being done.

And there are a lot of -- I mean, that, you know, in terms of the recipients of the anonymized data, it's these 100 plus universities, but it's also organizations like the Federal Reserve, get anonymized trading data, to understand how markets are forecasting future events. So it's crazy that one branch of government is trying to shut it down, after 8.5 years of seamless operation and highly accurate forecasts.

SMERCONISH: John, thank you. Be interesting to see how this all plays itself out. Beat with your head, nod over it, I think is what they say. Thank you, John Aristotle Phillips.

PHILLIPS: Thank you, Michael.

SMERCONISH: From the world of social media, what are people saying about this issue? I think betting on elections will only draw the group that bets on anything rather than election fanatics. Won't be anything like sports betting. I'm not so sure. I mean, I hear his point that people have skin in the game and they want to be participating in the process. If they've got something riding on it. I guess I could also say, we all already have a lot riding on elections, but I happen to enjoy it.

I want to remind you, go to my website at Make sure you're voting on this week's poll question. "Should U.S. military aid to Ukraine continue to grow incrementally, swiftly or not at all?"

Up ahead, yes, it's true here in Philadelphia. They're already greasing the poles ahead of the Superbowl tomorrow. Eagles and Kansas City Chiefs. The man, the legend Bob Costas is here on the rowdy Eagle fans, and the history making quarterback squaring off in Super Bowl 57.



SMERCONISH: Super Bowl LVII tomorrow with my hometown upstart Philadelphia Eagles taking on the Kansas City Chiefs in Glendale, Arizona. That will be the first Super Bowl where two Black starting quarterbacks square off, the Eagles' Jalen Hurts, the Chiefs' Patrick Mahomes. In addition to the talent on the field, the infamous Philadelphia Eagles fan base will be out in full force. NFL commissioner Roger Goodell gave the ruckus fans a shout out when he was asked about get booed every year at the NFL draft.


ROGER GOODELL, NFL COMMISSIONER: I actually love it personally because, you know, it's a way for fans to interact. It's a way for them to be part of it. Philadelphia fans are pretty good at booing. Let me just tell you.


SMERCONISH: Joining me now to discuss the big game CNN contributor and sports broadcasting legend Bob Costas, who was NBC's host for seven Super Bowls. So, Bob, great to see you. Let's talk Philly fans. Put aside the throwing snowballs at Santa or the Buddy Ryan bounty bowl which I remember well. The schools here already have announced they are going to open two hours late on Monday. Is there any other city as emotional about its teams?

BOB COSTAS, CNN CONTRIBUTOR: Well, if we just confine it to the NFL, if Buffalo were to win the Super Bowl, they have been to four Super Bowls historically, four in a row back in the early '90s and lost them all. Though they were admirable team I think Buffalo would have a certain kind of reaction. If the Cleveland Browns ever did it, you think of Cleveland overall, there's definitely a sense of resentment there.

Going into next season, it will have been 75 years since the once Cleveland Indians now Cleveland Guardians won the World Series with the Red Sox, the White Sox and the Cubs breaking though in the 21st century. That's the longest drought in all of American team sports, if my calculations are correct, certainly in baseball.

LeBron James helped the Cavaliers win one title, but the Browns haven't won one since 1964. And we know that, you know, in Cleveland, there's a lot of pent up emotion. So, maybe Cleveland, maybe Buffalo, but I get your point about Philadelphia.

SMERCONISH: This quarterback matchup, the first that it represents, Mahomes and Jalen Hurts, talk to me about that rivalry and whether if you have seen anything like it.

COSTAS: Well, in terms of anticipation of a quarterback matchup, I think we have seen things to equal or even exceed it. When the Dolphins played the Niners in the mid-'80s, you had a Dan Marino and Joe Montana matchup. Marino had thrown 48 touchdown passes. It was a different era in the NFL. That didn't just break the record it shattered it by like a dozen touchdown passes for a season.

And Montana had already won one Super Bowl. That proved to be the second of four that he would win. So Montana, Marino was a hall of fame matchup. If you go back to the seminal Super Bowl III, when the AFL broke through, you had young Joe Namath against the Baltimore Colts who were heavily favored. Earl Morrall started the game but Johnny Unitas came off the bench so a matchup of --


SMERCONISH: Johnny Unitas.

COSTAS: -- the new age -- the new age and the old. Every Starbuck versus Bradshaw matchup in the Super Bowls of the 70s Cowboys and Steelers, you know, so I get your point. This one is significant. Not just because both are good quarterbacks, Mahomes is a great quarterback, that's already been established, but it's the first time, as you say, that by happenstance it's two Black quarterbacks, starting quarterbacks in the Super Bowl.

But there have been many Black quarterbacks already in the Super Bowl. It is no longer headline news when a Black quarterback happens to start a game in the NFL. The big problem now is better representation among Black head coaches.


Although it's interesting to note that we go back, what, 17 years or whatever it is, my math may be bad, 16 years, I guess, to 2007 when the Colts played the Bears in the Super Bowl and you had two Black head coaches in a league that still has not come close to resolving the problem with inclusion for Black head coaches. But Tony Dungy coached the Colts to victory over Lovie Smith and the Chicago Bears. So, I think it's more coincidental that consequential that there happen to be two Black quarterbacks in this particular game because Black quarterbacks are now common place around the NFL and many Black quarterbacks have played in the Super Bowl already.

SMERCONISH: You know that concerns about the safety of the sport persist. I'm sure you saw this week that there was litigation commenced by some NFL veterans who say that they weren't provided the full disability benefits. And you, Bob, you know, laid down a marker on this issue long before anybody else. I guess the question that I want to ask is, does any of it matter to the fans? Because, you know, the thirst for this game tomorrow and to watch the NFL generally seems unabated.

COSTAS: Yes, the Super Bowl has long been a national holiday. Football has advantages, especially the NFL, over other sports. Each team plays only once a week, generally at a time of the year when people are at home in the fall and in the winter. Every playoff game is the equivalent of a 7th game in baseball, basketball or hockey. So you have all that going for it.

It televises well. And speaking of television, this is important, most other sports have sold a good part of their inventory to cable. There's nothing wrong with that. Most of the cable presentations are excellent. But it takes it away, even as the landscape changes, it still matters that virtually every NFL game and every one of importance is on broadcast television. It's more broadly accessible.

For some people it's an obsession. For others it's a passing interest. There are some who have turned away of the game because of its undeniable brutality. And there's a larger number that recognize it, but somehow they make their peace with it. And that includes many people who cover the game.

They can't help but know the reality of what it does to a very large percentage of its long-term participants but there's a draw to it. The generational connections, the strategy, the drama, the excitement of it, that's all undeniable. So, too, is the toll that it takes on too many of its players.

SMERCONISH: Very quickly. You referenced LeBron. It's not football related. I saw something on YouTube that I have to show. It's LeBron James about to enter, from high school, the NBA. Can we quickly roll that clip and ask for Bob's quick updated reaction. Play it.


COSTAS: How does it feel to know that if you're not eventually a hall of fame caliber player, it's not good enough to be good or an all- star. It you're not eventually a first rank hall of famer, a lot of people will say you're a bust or overhyped.

LEBRON JAMES, NBA'S ALL-TIME TOP SCORER: How does that make me feel?


JAMES: Well, I don't look at it as looking into the future. I always go by, I take every of moment at a time because you're not promised tomorrow. And that's what my mom brought me up on. And I always say that I just try to get better every day on what I do.


SMERCONISH: So, Bob Costas, bust or overhyped, you would not attach to LeBron James today?

COSTAS: No. Not only did he meet every expectation, he exceeded them. And I wasn't putting those expectations on him. I was summarizing what was already out there. That was the feeling that was out there. This guy has got to be an all-time great.

And I was very impressed, at age 18 how well he handled all of that, how levelheaded he was. And for the most part, he has gone on to be not just a great, great player, but an admirable person as well.

SMERCONISH: Thank you so much for being here. You know I love having you on the program. Thank you, Bob.

COSTAS: You got it, Michael. Good luck to the birds tomorrow but to the Chiefs as well so I can remain neutral.

SMERCONISH: Amen. OK. I want to remind everybody, answer this week's poll question at It's the question retired Navy Admiral James Stavridis, former supreme allied commander of NATO put on my radar. Should U.S. military aid to Ukraine continue to grow incrementally, swiftly or not at all?

Still to come, I once agreed to a non-compete clause preventing me from leaving and working for a rival. I thought it was the stuff of, you know, media personalities. It turns out such restrictions affect more than 30 million Americans from cooks to CEOs. Now the Biden administration is pushing to end the practice. Will that happen?



SMERCONISH: Are non-compete contract clauses about to be nixed? President Biden said as much in his State of the Union address this week. Let me read to you some legally. Here it is.

"It is therefore agreed that after this agreement expires or is otherwise terminated, for a period of six months, contractor shall not allow, and artist shall not appear, perform or allow artist's voice or picture to be heard or transmitted live or by recording on any radio station within a 50-mile radius of station."

That is a non-compete pulled from an old radio contract of mine. It would have kept me unemployed for six months. And I agreed to it. I thought I had to. I also thought it was the cost of being a radio host or a television personality. But like the president, I have since come to realize that non-competes are much more pervasive than just among media folk.

Those 30 million Americans that the president referenced in his State of the Union, they included CEOs and construction workers, hospitality employees, chefs. I even had a guy call my SiriusXM radio program this week and tell me he was subject to one as a New Jersey gas station attendant.

[15:45:02] But as the president also said, the Federal Trade Commission is now proposing banning all non-compete clauses and rescinding all existing ones saying they hurt workers and competing businesses. The proposal is currently in the public comment stage.

So joining me now to discuss is Elizabeth Wilkins, director of the FTC's Office of Policy Planning. Elizabeth, nice to see you. In what profession have you been most surprised to find there are non- competes?

ELIZABETH WILKINS, DIRECTOR, OFFICE OF POLICY PLANNING, FEDERAL TRADE COMMISSION: Well, as you say, there are a lot of people who are subject to these clauses. Folks -- think about, you know, people in the board room, folks who might have access to confidential information. But honestly, to my mind, hairstylists, as you say, construction workers, security guards.

We had a case about security guards who are subject to a non-compete not to work within 100 miles of their job site with a penalty of $100,000. These are minimum wage security guards, if they did so. So there's really kind of a wide swath of people who are subject to these. And the penalties can be severe.

And as you said, you know, folks think, oh, man, if I leave this job, I'm going to have to move or change professions to be able to work again. I can't afford that. And so people feel really trapped.

SMERCONISH: I know that the U.S. Chamber of Commerce has come out against the position taken by the Biden administration and the FTC. I guess the question I want to ask is, why can't the market sort this out? If you go to an employer and they are going to impose upon you a non-compete, then go to a different employer.

WILKINS: Michael, I think you said it the best yourself. Folks think they have to sign these. They don't think they have a choice. And that's even if they realize they are signing one.

I mean, I don't know what you thought the last time you started a job, but I know when I did, I had already quit my old job. I already accepted a new one. Somebody handed me a stack of HR paperwork, which I signed. If there was a non-compete in there, and I'm a lawyer, I might not even know. And so sometimes folks don't know that they are trapped until they try and leave.

SMERCONISH: Is it best handled by the federal government through what the FTC is seeking to do? I know that some states, California comes to mind, finds them unenforceable. Is this an area where you have to have federal action?

WILKINS: So one of the most disturbing things that we find in evidence is that in states like California, where non-competes are unenforceable, they are in just as many contracts as where they are enforceable. And if you're a worker, you know, you probably don't know what the state law is on your non-compete clause and your employment contract. And that means is that those clauses, even though they're unenforceable, can have the same effect of chilling workers from looking for new jobs, looking for better pay, looking for better working conditions, and ultimately be productive workers for our economy. So we do think a federal rule that's very clear will have a major impact for workers.

There was a recent Ipsos poll that said that two in five Americans who were polled would be more likely to switch jobs if this rule were enacted. That's a huge, huge impact. The other thing that's important to know is, you know, labor markets aren't confined to one state or the other.

So if we really want to see the important impacts, and I should say they are important, we estimate that wages could increase by $250 to $300 billion if non-compete clauses were banned. If we want to see those kinds of impacts for workers, we have got to ban them.

SMERCONISH: Elizabeth, this is -- this is -- this is a complicated aspect, but I have to get it in. Intellectual property rights. Isn't that a justification for maintaining non-compete agreements? We don't want you to go across town and take our proprietary information.

WILKINS: That is a justification that we hear from employers. Employers have other options. Ninety-seven percent of workers who are subject to a non-compete are also subject to something like a non- disclosure agreement or other protections that employers can have to protect their confidential information. There's also trade secret law. All of these other alternatives don't have the severe consequences for workers.

SMERCONISH: I never -- as I said at the outset, I never knew. I just figured it out. You know, I'm a radio guy. This was 10 -- 15 years ago. And I guess this comes with the territory. I didn't realize that one in five Americans are treated the same way.

Thank you so much for being here. Appreciate your time.

WILKINS: Thanks for having me.

SMERCONISH: Let's check in on social media. Reaction to this issue. We're in the midst of the -- I guess it's a 60-day comment period. It will be interesting to see what happens.

There are reasonable non-competes and there are oppressive versions, says Michael. Let's not throw the baby out with the bath water.

Yes, I think I just brought one up at the end, right? The whole intellectual property argument to me seems like a valid justification. And with no disrespect to hairdressers, a subject I know very little about, I can't imagine that there's proprietary information that goes with that turf.


So I think, you know, as it's usually the case, in certain circumstances, it's warranted. The extreme cases of all or nothing probably doesn't make sense.

Still to come, more of your best -- have you voted yet? More to come of social media and the result of this week's poll question. Please go vote at Perhaps you will register for the daily newsletter while you're there. Should U.S. military aid to Ukraine continue to grow incrementally, swiftly or not at all?



SMERCONISH: So there's the result. Or I should say, there's the results so far, because I leave the poll questions up every day all day. Thirty-five thousand votes, and again, the most militaristic response wins, Admiral Stavridis' perspective carries the day, 75 percent says throw in the kitchen sink.

Limited time for social media, but what do we have? Here are some of what came in during the course of the program. Real quick.

Need to work for a negotiated conclusion. Yes, I wonder, Ken, how much conversation is taking place on that front. I hope so. How do you define victory for Ukraine is also the big, you know, x, the unknown.

Thank you for watching. Enjoy the game.