this is an incredible fashion disaster we have today david sachs is dressed like where's waldo okay uh freeburg freeburg is dressed like driving a [ __ ] uh subaru outback oh god unbelievable i mean this is ridiculous hey everybody everybody it's another episode of the all in podcast episode 31 with us today
from well i was just rolled out of bed the queen of quinoa himself david friedberg is here let me just hopefully get that hair it's not going to help have you been studying the homeless problem by by yourself going out on the streets minutes up we have to keep the freedberg release the ratio up i had somebody stop me in miami and
say keep the friedberg ratio high also with us chiming in is where's waldo himself the skipper the david is here don't change my nickname don't change my nickname i'm comfortable with rain man don't throw me off yeah definitely i'm definitely okay with rain man of course not the skipper not
the skipper n the dictator himself got a full night's sleep i hope this time i did i really really really really really and of course i'm j cal the baby seal here in miami look at the view how beautiful it's been an incredible incredible week the tiger has been unleashed i went to austin now i'm in miami jake kelly you're more like you're more you're more like a pudgy hyena
i don't know you're not really a the quarantine 15 big announcement 10 pounds are gone five to go i'm lifting weights outside in miami it's been amazing field report i get to austin i kid you not i got my mask on 10 people first of all 10 people say i love the all in podcast every like 15 feet walking in austin and in miami
but somebody looks at me with my mask and says are you okay son and i was like what i kid you not and i he said are you vaccinated and i said yeah he's like why are you earning a mask and i realized it's time for independent critical thinking saks i gotta give it to you another great
great tweet for me to copy and adapt to steal your deal but i love this tweet that you had where you said early in the pandemic explain the tweet or maybe read the tweet this is which one i've been about one group of people who wouldn't wear masks oh yeah yeah well at the beginning that's right i mean the the the dysfunction of our politics is that half the
country wouldn't wear a mask at the beginning of the pandemic and and and now the other half of the country won't take them off at its end this is the problem is that the mask has become um it's the equivalent of the red maga hat for team blue this has become some sort of uh virtue signaling
even when it's not necessary but it's actually destructive because it's performatively sending the signal to people that the vaccines don't work and we have a third of the country today is still vaccine hesitant and this is not helping what we need to be sending the message to them is look
get vaccinated so life can get back to normal so you don't have to wear a mask and you know we still have the cdc putting out this ridiculously conservative and timid guidance saying that well if you get vaccinated you can take off your mass outdoors as long as you're not with too many people well like what no i mean look once you get vaccinated you should need to wear a mask
outdoors or indoors and you know we had the state this uh sort of mini state of the union this past week with biden and it was this really like image no it was like an empty room because of social distancing and they were all wearing masks even though you know every single
one of them is vaccinated and so i think bi didn't really miss an opportunity in that speech yes he said that everyone should get vaccinated but show not tell i mean you know he walks up to the microphone in a mass saying that we should all get vaccinated well what is the mass for why don't you tell people that if you get vaccinated you don't need a mask anymore and so
you know that we have this sort of um contrast it's actually really it's it's really incredible because your point he was trying to make some very important points in that speech david and when the camera would actually pan from behind him so instead of looking at him and kamala and nancy pelosi it would look there was nine people and you thought another sold that crowd
no no no because typically when when you give these sort of state of the union or you know these kind of like 100-day addresses it is packed because you have everybody in congress you have everybody in the senate you know you have you have typically like a bunch of other officials you have
the supreme court like in a state of the union address and there was nobody and it felt really striking to watch that if trump's mistake was not wearing a mask in april of 2020 i think bind's mistake is not taking it off in april of 2021. why can't we get a political leader who is willing to
put on mass at the right time and take him off at the right time we need a political leader who's reasonably scientific and will actually say here's the intersection of science and common sense that everybody can map to and and copy me because it is to your point david you know the leader of
the free world is given that title for a reason it's not it's not completely completely ignore what i say i've been put in this position because i am you know on some dimension expected to be the most thoughtful person in the room and set the example for everybody else let's just talk like the important consequence of this and i agree with sex the important consequence
of this however is the economic effect it has so for example in san francisco restaurants are only allowed to be at a quarter capacity so there are restaurant owners that want to get back to business that want to generate income again that want to get off of the ppp loan program and all
of the government support and they should be able to because most people in san francisco at this point the vast majority in fact are vaccinated and the restaurants for no scientific reason are shut down or limited to a quarter capacity and this is the case across a lot of cities and a lot of states in the country right now where the conservatism with respect to coming out
of the um you know the major part of this kind of pandemic is what's now keeping the economy or not just keeping the economy because we're fueling the economy with stimulus but is keeping business owners and keeping um people that want to participate actively uh in in building and running
their businesses from getting back to work because we're so conservative about this and you know what saks is totally right yeah like take the masks off let people go into restaurants and let people go have dinner in san francisco let these places get back to work by the way we have a we have an a b
test that's actually nobody is talking about which is that the more conservative version of america's posture right america is sort of like half we don't care and half we care too much but in europe you could see a more you know homogeneous approach to the problem and we printed a negative 0.6 gdp
growth in europe so to your point with all the vaccines that are out there with all of the logic and all of the science not being able to just take the mask off and get back to life as normal was negative 0.6 gdp growth in a quarter where they also printed hundreds of billions of dollars
and now you come into the united states last year i don't know if you guys remember this but every forecast i saw had gd from the smartest folks saying q1 gdp would be on a run rate to be around 10 it would be one of the best in history it was only 1.6 so we're on a 6.4 gdp growth run rate guys that's not 10 now it's still a lot but the point is we got to get back to life as normal
we have to show that these vaccines work we have to tell people that you can have a normal life you should be going out spending money going back to the office live normally yeah and and we should we should we should just cover the data i mean we should i mean it'd be great to put up the latest cdc data on the screen yeah if you use the cdc as a source for the data
as opposed to listening to their interpretations of it their policy interpretation it's actually pretty illuminating so out of 87 million people who've been vaccinated there have only been 408 serious cases which would be you count as hospitalization or death related to covet so those
are odds of one in 213 000. the odds of being hit by lightning are one in 180 000 so your odds of being struck by lightning are greater than your risk of getting seriously sick it's a royal flush i need this in poker terms i think that sounds like hitting a royal flesh twice yeah exactly it's crazy how many royal flushes have we each had i'll put it i'll put this article up and you guys
can share it in the um show notes the technology review one yeah yeah and i think it it does a good job of speaking to sax's statistic now uh yeah so i think uh sax i think this represents the cdc data in the first paragraph uh in this article but it goes on to kind of speak about the statistics
likelihood of these events so you know basically uh you know it opens up by saying you know as of april 20th 87 million people in the united states have been vaccinated and only 7157 or 0.008 went on to become infected with sars cov2 um 330 of whom were hospitalized and 77 of whom died from
the disease and i would guess that that of those people there is likely some immune dysfunction which is a you know a likely reason why it doesn't mean that every individual has that risk it means that there are certain people out there that are going to have immune dysfunction and won't react
well to to to won't develop the appropriate kind of protection from the vaccine um and that's you know that small small small small small percent of people are where we're kind of seeing you know um actual risk like that's where i get the 408 number is it's the number of hospitalizations plus deaths
minus the ones that they say in the footnote we're not related to covid right so there's some other like cause so 408 out of 87 million and by the way i think it's worth just highlighting you know just think about the rationale for why there is conservatism here still right so um if there are still pockets where people have not been vaccinated in the country and there are still
areas where people are hesitant to get vaccinated and there's a large unvaccinated population the official guidance the official kind of reasoning i believe is that we need to be conservative to get all of those people to behave in a conservative enough way to keep a you know a surge from occurring regionally around the country and the loss the downside is very negligible
uh where people still have to wear masks what i don't think that that calculus accounts for is that the loss is actually not negligible the loss of telling people broadly to keep wearing masks is a hesitancy to go back to work a hesitancy and a conservancy to engage in normal economic activity
and so you know i think that we're kind of missing that point in the kind of officiating of this uh of this exit strategy here um and it's uh it's certainly uh i i'm aligned with sax on this i certainly think it's uh it's biting us more than it's helping us to give you an idea just like experience wise when i was in austin every restaurant is at 110 capacity the locals
they were like i can't get a reservation for a week or two the town is packed everybody in the country is going to austin and miami because they've just learned that austin and miami have officially declared if you have the vaccine you can go have your life but there is still a little
bit of theater on the margins when you go into a restaurant i went in to to get a meal and i didn't have my mask on i kid you not 110 capacity 100 people sitting at the bar 200 people at tables she hands me a mask and i said i have one i put it on i say can i ask you a question and she the hostess says uh why should you wear a mask when there's 300 people in here without a mask
and the doors are closed i was like that's the exact question she goes it makes no sense the governor wants no mess the mayor wants masks and so they're having their own little version of the national conversation in austin which is locally scared or at least the politicians are and then
reasonable otherwise um so you literally put your little mask on you walk 10 feet to your table and then take it off for the rest of the time in miami it's a true story i go to miami i walk into i i ha you know it was i i haven't been out in 14 months so i decided i would check out a club
and i went to a nightlife club um and people were dancing and having a great time people were also popping bottles and i was like oh my god it's over like a nightlife club it was a nightlife club no it was not a yes anyway it was a legitimate club you know here in south beach um and so
i took a little insta and i share i fed the insta and immediately i got three comments from friends who are like what are you doing in that club and i wrote back to all three i'm vaccinated and they were like okay i was like it's not but i guess but i think this was the point i made a few months ago which is i do think that the the subconscious training the fear factor
that's been kind of you know built into us over the last year year and a half um is gonna take a while to kind of train our way out of you know people aren't going to be that rational and that conscious about oh i've been vaccinated people are basically the default is fear the what-ifs
the butts but oh my god people are still getting coveted even though they're vaccinated but there's there's variance but and everyone looks for a conscious or you know a kind of conscious reason why they're rationalizing their subconscious fear and everyone's got this fear to go and do things
in this fear to go back in the world because we've literally been trained and beaten into a corner for the last year now the conscious reality is you don't need to be fearful but i'm fearful therefore i'm looking for reasons to maintain my fear and i think this this this is like what again i say that
i said it like four times before but this is what happened after 9 11 and it lasted for years and you know we still have ridiculous tsa processes we need our leaders to take their masks off get tell everybody they're vaccinated take their masks off go back to normal life so that everybody else will feel that it's okay too because even if you're even if you're if you're not fearful david
the other thing that you are is just guilty and right right totally and you gotta you gotta get rid of that as well and the only way you'll do it is if highly visible people are now actually going back to life as normal yeah like the peer pressure element of it it's like i feel bad i feel bad
going into a store when everyone else is wearing a mask and like i'm just crazy this crazy msnbc uh moment one of the hosts of one of their shows said i've been fully vaccinated but i went running in central park so i double masked and i'm like the virtue signaling was so insane and i'm like wait
a second you're outdoors insane this is the this is the joyride thing yeah i don't want to see the person's name because then if you mention who it is then you might be attacking a person of color or a woman host so i just said now you're avoiding it which makes you think that you are so who is
it how am i supposed to say it without being does anybody what i mean nobody watches msnbc trump derangement syndrome therapy was msnbc the ratings i wanna i have a question for the three of you knowing what we've seen here between the logic of both sides and the media and the insanity what
do you take away from the year of the pandemic as it comes to a close in how you personally look at the world sacks you want to start like yeah i'll tell you i feel like the american people are constantly being propagandized and there's almost like an information war being perpetrated on the american people where we cannot get the data the facts and the truth i think it's true now
in terms of people not taking off their mass even though we have the cdc data that basically shows the lightning strike probability of getting covet but we saw at the very beginning of the pandemic remember i have all these people on twitter telling me every time i tweet about this why don't
you just listen to the experts right they want me to shut off my brain and just do whatever the cdc says and i'm like well do you realize the cdc was against mass at the beginning of the pandemic back in march of 2000 last year when i was saying we need to wear masks because looking at the success
of the asian countries and some of the data coming out of that the cdc was very very slow in adopting mass they were against it they were telling us we didn't need to do it and that was the historical cdc like right they've been around for a long time and then also trump was anti-mask and so you had
trump was slow to dot mass 2 and yeah and absolutely and so yes i mean i've said that there's like a venn diagram of american politics where that you know one circle is favored mass wearing one year ago and then once to get rid of mass mandates today the venn diagram of overlap between those two groups is very small i'm in that overlap i feel like i'm in like a very
lonely part of the the political graph um yeah chamath how has your thinking you know now that we've had to process this event in our lifetime that is probably the most consequential uh you know moment yeah i have i have i i've thought about this a lot jason you ask a really important question and i think everybody should probably try to take five minutes and actually
write this down um because i think i'll tell you what i learned i learned i learned three things um the first thing i learned is intellectual and it's exactly the same thing that david sacks said it is completely shocking to me how much disinformation there is and also how we are so prone to turning
off our brains and not thinking for ourselves so it's really shocking and i think 2020 was the year that that was laid bare that the institutions that feed you information can't really be trusted that you can't really trust the interpretation of actual simple data that nobody wants to think
in first principle so that's the first one we have stopped thinking for ourselves and that's a recipe for disaster and so that's an intellectual thing that i've realized and i don't want to do it and so i'll think for myself and i'll take the consequences the second was economic which is wow we have really over rotated um to this crazy form of globalism that is going to get undone
over the next 30 years and that's going to have a lot of implications and it can be done in a way that can rejuvenate the united states which i think can fix a lot of the stuff that was created and we should talk about that later uh today and then the third is physiological which is if you
didn't know before i'm gonna tell you now and it's this three-letter word that we make into a four-letter word in america which is the letters f-a-t we have a fat epidemic in the united states almost 80 percent of every single person that was hospitalized because of covid was clinically obese
and you can't say it and you're not allowed to say it if you say that somebody is fat or if you say that somebody is obese it's all of a sudden like you know you're gonna get virtue signal cancelled and instead what we're doing is we're leaving an entire generation of people completely abandoning them because we're not confronting the problem that by a combination
of food and a lack of movement we are setting them up to either die acutely of something like covid or chronically by heart disease and diabetes and that it was like it is now so obvious and by the way that's the other thing where these healthy fit people were running around double
vaxing and or double masking in central park and they don't even know the basic data like even if you thought you were going to go to the hospital the 80 percent of all of those millions and millions of hospitalizations were from people that were obese they had physiologically completely taken their body to a place that it wasn't able to fight right so those are my three
takeaways intellectual economic and physiologists insert one thing on that is because i agree with with everything chamath just said is this this idea of laying bear that laying bare the the sort of corruption of these like institutions that are supposed to be coming with good policies
and educating us and it turns out they you know keep giving us this foolish guidance but there's also another institution i think that was laid bare which are these education unions right we had school closures for a year the the learning loss and the isolation that kids are
have experienced we don't even know what the results of this are going to be this could be a generational consequence and what do we see from the education unions they didn't want to go back to school they fought it you know we had the whole oakley school board resign because they just said well they want us to go back to work to be babysitters for their kids
so we could smoke pot these are people who don't care about the kids and after this year i don't know how anyone can be against school choice or charter schools or giving parents more involvement in their kids educations 100 freeberg coming out of the pandemic and looking at your own psychology
and your own life what um have you learned and what do you take forward in terms of lessons and how you're going to approach post-pandemic life i'll kind of flip it a little bit one of the first experiences i had with how broadly people could be influenced in a way that doesn't have grounding or rooting in facts and reality is when i sold my company to monsanto
in 2013. and j-cal i think you came with me on one of these trips that i took uh yeah i visited monsanto with you yeah and um you know there was an incredible bias by my team and by me personally prior to even engaging in conversations with monsanto against that company because they were
deemed to be evil and as i as i spent a lot of time personally kind of digging into the the facts and the history of the business and kind of how we got here it was surprising to me like how much of the bias against monsanto was not rooted in fact and was in fact um you know a series of claims
that then became truth and reality because of the perception and it just became it things got stuck that way gmos are bad gmos are evil that the science of how they work what they do why they're useful was never contemplated never became part of the dialogue it was just this assumed fact
that this is an evil company that this stuff is bad and um you know this is a long long topic we could talk about this i'm sure for an entire hour and a half about the science and technology behind gmos and how we make food and all that sort of stuff and i'll be happy to do that another time but like for me i was just so surprised when i engaged with thoughtful
friends of mine who were scientists even and they had this bias and then when you engage them in a dialogue about like why where does that come from what's the rooting it just wasn't there and i got and i mentioned this to you guys when i was an executive at the management team in monsanto we had a who ruling where a guy got himself elected to the iarc
the um this is the cancer research group within wh he was this liberal guy who was very anti-technology who got himself elected to the iarc board and um got a ruling made that uh roundup is a possible carcinogen and that ruling led to a 10 billion dollar lawsuit that
monsanto or now bayer is settling um which wasn't rooted in the science or the fact that the other scientists on the committee had kind of previously kind of proved uh previewed and gone through and said this isn't cancerous and it's incredible the implications it's had and so i've always you know
for several years now i've had this kind of belief that like people can be led to believe things that aren't necessarily rooted in objective truth uh or in fact or have empirical evidence to behind them and this is this this goes back to the origins of religion and monarchies and like you know these myths and these these these these tales we tell ourselves uh where we all end up
believing something and there's some influencing factor that that drives that i think this has just been an incredible manifestation of that um the the the misinformation on both sides from the beginning to the end of the pandemic and it's just been extraordinary to watch i don't think
you change it i think social networks amplify it um you know i think that the the rate at which information or misinformation flows back and forth is making it easier and quicker to kind of adopt this you know systemic inaccurate belief system that people might adopt and so um you know it's a it's a big question mark for me i i don't know you know how we as a
people kind of move forward with like objective fact-based decision-making and belief systems um and i don't know if we ever will uh but um well yeah it's just how humans are wired maybe you know i haven't given it a lot of thought and i really like all of your answers because mine is very
similar number one i i feel like i was always an independent critical thinker in my life and that i think i kind of started to pick sides because of trump that like i just found him so offensive and i realized i have to go back to being just an independent critical thinker i fill out with no party i assume all news stories are fake news i assume all date is being manipulated
i assume everybody's got an agenda i believe everybody's virtue signaling now and i'm making the decisions for myself and i in the one of the things dove tells exactly what you said chimoff which is this was a disease of a of you know old people and fat people obese people of which i
have been one for far too long and this is my commitment is just i i got to take my health 100 seriously now that i'm 50 years old i got a trainer i got a masseuse i'm working out i'm doing weights i'm doing everything i change my diet i'm taking supplements the the stuff we talked about here i went right to my doctor after that episode we did chem off
i'm getting that body scan for four [ __ ] grand or whatever it costs and i'm just doing it all are you saying masseuse is going to help you lose weight no but i've had a i've had shoulders maybe no i just realized i don't stretch i don't stretch and my shoulders were getting very tight and being
on the computer and everything so i'm just what a man of the people what a man of the people oh look at you which one are you wearing i got a masseuse sucked every week i got a figure i got a person i gotta afford that the third thing and this is heartfelt and sincere is that friendship and our loved ones are really with along with health is so important
and i am cherishing every moment every experience with every friend knowing that the world can shut down and whatever and we have to take advantage of every moment and that for me is that the takeaways the can just to build on something i'm really proud of what you're trying to do um
jason for your health when i i remember i you know you know how you all have these high grade school pictures yep right like you go to like picture day or whatever yeah and there was this crazy contrast that i had in my grade school pictures there was like two of them when i was in sri lanka so i was like you know five and six and then great you know then
i was seven or eight and then all of a sudden this crazy hey hey what's up antonio is here mucho calientes does antonio realize he's on an international nobody even knows who he is don't worry he's like one of the most powerful guys in our industry what i was gonna say is like uh by like i think when i was like nine or ten i had gotten really fat um
because because when we moved to canada it was a very different food supply and then economically we were in a different place we ate what we could afford and i put on a lot of weight and that weight carried with me until uh college and then after college and that's when i said i
got to get in shape exactly for the same reason jason because like my dad was getting dialyzed he was constantly you know dealing with these health issues and i said i don't deal with this um but that's a rare thing that happens if you think about the number of people that are put in this predicament of like not even forget you you're able to get a trainer or whatever but
there are a ton of people that can only eat what they can afford yeah right and the reality is it is just meaningfully cheaper to eat at mcdonald's than it is to go to whole foods and be able to buy organic food and so it's just not even on the agenda for people so this is what i mean by
you we have to be able to say that it's not that people are fat because they choose to be that there are these systemic imbalances that make people sick you know what i mean education and health these are the education that we need to work on in america like saks you said at the
uh i was at last week's actually said you know the i think this is a great bargain that could happen in america with all this polarization if even a republican conservative like sax can say everybody should get a great education and everybody should be healthy right like and sax isn't a socialist but this this is important and it's so easy to just get a happy meal
then to to eat a salad you know or whatever i was in washington dc this week and um i met with this organization which um uh anybody who is interested in this should check out called third way and what third way is is a centrist organization right so they they largely work with dems to try
to pull them here um and i think the republican version is called the niskansen i guess center but the idea is i sat with these guys and i was like just teach me something and they taught me the most incredible thing you guys know who pew is pew goes out and does all these research they've been
doing it for decades they're the most respected i think in surveys pew does this incredible thing where they go to like a whole bunch of countries in the world and they ask this basically very simple question i'm going to ask you guys what you think the answer is on a 0 to 10 scale where 10 is important what do you think americans think to the following question
how important is hard work to get ahead in life meaning right so it's a proxy for how americans think about hard work how important is hard work to get ahead in life freedberg what percentage of americans do you think that say that hard work is important to get ahead in life and i'll give
you a couple of data points i would say 80 yeah but the setup is indonesia 28 india 38 germany 50 go ahead what do you think the answer is well it should be a hundred percent but what do i think it is in the u.s um i i'm hoping it's above 60. i agree with you saks 100 is the right answer and i believe americans don't believe it i'm
going to put americans at 35 because we've seen so many people get lucky and get rich or just people think the system's rigged or the victim culture where people tell everybody don't bother trying because it's rigged and you just it's i think the argument sorry jamal
i'll let you give us the answer in a second but i think the argument is that like entrepreneurism fuels these moments of extraordinary success but the perception creates the opposite effect which is someone can get rich very quickly and therefore there's this luck factor or this unfairness factor
that is um you know that is inherent in the system right and so while it does enable hard work to drive you know tremendous outcomes the perception is that holy crap in three years you know kylie jenner went on instagram and became a billionaire or whatever right and people get really kind of blown away by that and i think it's discouraging or one person's success makes
it such that other people can't that it's zero sum when in fact a company what's your what's your number for america 80 the number is 73 and we are the third highest ranking country in the survey that's great so it's amazing now if you if you ask then americans who better represents the
interests of hard-working people among republicans and democrats the overwhelming answer is now republicans which is really interesting democrats even in exit polling basically voted uh for biden because they just really found trump distasteful and a lot of the people that um you know basically said you know he's an ass and so they voted him out but it was not because they believed
that democrats could do the job of actually reinforcing the values of hard work and this goes back to they don't want handouts people don't want handouts people people people want a fair shot they want an even starting line they don't want an even finishing line yeah they don't they
don't no one wants paternalism and uh everyone wants opportunity um you know but you take what you're given when it's available to you no one says no you know i spent a lot of time with farmers in the midwest in the united states very diehard conservative generally right and and farmers benefit greatly from significant government federal government support programs
um primarily a crop insurance program and some commodity price support programs but but they are very anti-government and there's this tremendous irony there right because they don't want to hand out they they want to kind of be left alone they want to be able to run their business they want
and i'm generalizing right but i'm just speaking broadly to kind of the theme of things i hear when i when i meet with farmers um but when the crop insurance program shows up and direct support payments show up you're like okay i'll take the check um you know and so it's hard to say no but i think the motivation for everyone is universally the same which is right i want to have
the opportunity to be successful independently are we creating policies that reinforce this and are we creating the condition that makes people feel less like a victim less looking for handouts and let's reduce i i have a concern about the stimulus checks i i do think it was a smart thing to do to get us out of this but do you guys wonder if this
generation which is not going back to work we have a shortage of uber drivers we have a shortage of bartenders waiters nobody was a lot of people are just choosing not to go to work because they have their stimis america is a place where you come to because you want to grind
you want to find your own little engine room and you want to be in there and you want to put in the hours and the people that it attracts from around the world speak to that you know the way that you can explain you know why indonesia and india are so far to the left on that same question
is because it's an extremely homogeneous population with zero immigration no immigration yeah i actually think the reason why america's so far to the right is it itself selects not by you know some kind of gender age or religion or color of skin by motivation it's motivation yeah and it's like if you're motivated to crush you come to the united states yeah we we've all
we're all what are we like you know one generation away except jason you're two-generation american my irish side is sixth generation we're all fighting we're first generation except for jason right we all moved here uh to the united states as immigrants as immigrants motivated family yeah
i think that's why i'm the least successful of the group is that what you're saying yeah you're the you're the lazy complacent american whereas we're the hungry immigrants i'm trying i'm trying hey listen you're the daniel day lewis you're the daniel day lewis character in gangs in new york you know you hate the
immigrants you sit at the boats you throw eggs at everyone it's interesting you bring that up yeah do you know where my irish uh poor bearers came from and when they immigrated to the five points we were in the five points it's exactly accurate yeah of course i was it makes
sense you're not daniel day lewis you're the the heavier shorter guy though that was kind of nice yeah i dropped 10 on my quarantine 15 and i gave it to sax yeah you did you're looking good jacob you look good you look good in miami miami suits you in a weird way i gotta give i gotta give jay cal as much credit for where he came from
as chamath because i don't know those parts of brooklyn are maybe as tough as sri lanka kids with guns kids with guns yeah you know child warriors always row with a posse by the way you know on immigration i don't know if you guys saw this you know george um w bush uh is a
paints now and he paints uh immigrants yes so um i bought his book i bought a signed copy of it i should have brought it to the podcast today but it's a great book i highly recommend it trigger no but he actually has some writings in there that talks about the power of immigration and how immigration is so core to the success of the united states just to our point so
um this cup this conversation made me think of the book that i just bought this week uh really cool book by the way george w bush uh amazingly great artist really captures the personality of immigrants in his in his work uh i think the thing the thing is um like everybody wants to come here
to work hard everybody that's here is willing to work hard right whether you're first generation or not and then the question is can government create policies that allow us to do that and actually just create a safety net to catch us if we fall because that's what we also all want so there are parts of biden's bill that i think made a ton of sense like you know making community
college free that's a really disruptive idea because it'll put a ton of pressure on for-profit colleges right to like get their act together or not that's a good idea the child tax credit so that you can actually have subsidized you know um child care for your kids that's a good idea
but then where you kind of go astray is then when you start to figure out you know the levels of taxation again we talked about this last time but you know i just think that that's where you can kind of demotivate people to not then put in the hours i think this is a good segue also into um immigration through our southern border and this incredibly polarizing issue
and how the media is polarizing it how the parties are polarizing it just to ask a question to see if we even understand the data how many people do you think are illegal immigrants in the united states right now 20 million okay free berkshires um that's a guess yeah i i guess i guess 18 million i'll take a slight under to chamoc but about the right that's about the right
magnitude the last number i heard was like 12 million but that was a few years ago and bingo it's 12. now how many people are apprehended at the southern border a year since 2010 every year half a million anybody else want to take a guess 50 000. all right it's uh 350 000. so we literally
are tearing the country and i know that because i watched the movie sicario and i'm estimating based on the scene where they round everyone up at the border and took him away so that that that's my terrifying film yeah and awesome like incredible film just like xanax because you might have a
panic attack my favorite modern director dennis villanuev he's unbelievable but uh yes we digress yes that scene when they're racing the cars into the border crossing go to checkpoint what it is so if you guys are into sci-fi that guy directed the arrival which is one of my favorite films um
yeah that's a fabulous beautiful yeah beautiful um so literally the country's being torn apart a country of 330 million over three million would be one percent point one percent coming into the border and we just said immigration is just all these amazing people coming here to who want to strive and who want great things why are we tearing the country up over this issue
this is a tough topic well i think i think jason i think your point of view on immigration really depends on where you're sitting in the economy so i think for all of us who are in silicon valley we know that something like half of startups have uh an immigrant co-founder totally so we've seen
you know like paypal i think you know there were like three or four immigrants on the founding team you know peter was born in germany elon was born in south africa max was born in russia um you know i was born in africa and then you go down the list um same thing with google you know
sergey bring came from russia and just on and on it goes so if you're sitting in silicon valley as a tech worker you see that these immigrants bring tremendous dynamism to the economy however if you're in a low-wage job maybe low-skill service uh then the you know a lot of this immigration is competition and it creates wage pressure for you so this is why historically
the unions have not been in favor of you know uh of of immigration uh you have you know a lot of service workers in the minority communities you know there's a lot of animosity towards immigrants because of that fundamentally it creates job competition and wage competition and i do think
well so so look it's easy for us to sit here in silicon valley where we sit in the economy and say oh well let's just have unlimited immigration it doesn't matter well yeah it doesn't matter to us but if you're in the low-skilled part of the economy it does matter a lot to let in a flood of immigrants who are in that low school category and by the way we're worried about these jobs
getting automated away as well so you know i think you have to have a sensible policy i mean yes to immigration but i think you have to think about how much sort of low-skill immigration can we assimilate and absorb right but are a lot of those people who are coming in also then taking lower
wages because they're off the books and they're illegal whereas if we had a more reasonable policy of letting whatever percentage in like we could just pick a number and if that actually worked and they were getting paid on the books then it would remove some of that downside pressure so
you're not paying somebody under the books to be a delivery person or a dishwasher or whatever the entry level job is they have to get paid that means jason i think this speaks to the broader kind of set of political topics which relates to the enablement of competition and it speaks to some of the trade policy points that i think the last
administration made which is to limit trade and to limit access to global markets uh to provide services and products to the united states and to tax them because the lower cost labor ultimately out competes with higher cost labor in the united states and so you know you get lower cost goods
but the balance is is it worth having lower cost goods and services where you could actually see too much of a decline in the employability or the wages of people that are currently producing those goods and services in the united states and that's the tricky balance right there's no
blue or red right way to do this we want to enable competition we want to enable progress we want to enable lower cost of production lower cost goods and services but we also don't want to have the economic impact and the social impact of people being underemployed and unemployed um and balancing those two one of the tricky pieces of that balancing puzzle is immigration
another one is trade another one is regulation etc etc right so a lot of these things kind of drive that that tricky balance i really bounce around on this i of all of the four of us i was the only one that immigrated myself so i didn't you know it's not my parents did it oh you did something yeah
yeah okay i did it myself i drove to the border i got a tn visa stamp you know i crossed the border into buffalo i stood in line i got my own social security number um and i started a life in america in in the year 2000. how old were you 22 i guess or 23. you had a job lined up already i had a job
i had a job offer i had my offer letter i did the whole thing then i transferred on to an h1b visa i had to go through all of that then i had to you know wait in line i got delayed i had to refile so as a person that went through the immigration system and finally got their green card in 2007 or
eight and then my my citizenship in 2011 or 2012 i bounce around on how i feel because i remember the insecurity i felt in not wanting to lose my visa and have to leave and go back to canada and so if somebody was in that situation i could see why you know they would get very agitated if they saw a lot of immigration being lumped in into one broad brush right and because if
you if you look at it actually there's a there's a really interesting conundrum because it's not like immigration is a thing where all immigrants are pro-immigration right that's right it's actually not that at all it tends to be sort of cultural elites are pro-immigration because it's a
it's a synthetic way of showing openness and open-mindedness um but then you know in inside no right i mean it's true it's because they don't know they don't get affected by it exactly if anything it makes it easier for them to maybe find people to hire well as someone that lived through it what i would say is it it you know if i was still waiting for my green card
and waiting in line and having the idea that there was some amnesty program would have made me feel very insecure i'm not sure how i would have reacted to it but in that moment i would have felt insecure so the the broad solution to immigration is you have to separate the two problems and say
this part of the problem can be solved almost like a professional sports team which is to say we have the ability to draft every year the smartest and most interesting capable people that want to come here and work hard that will probably you know it be a rising tide then there are these two other buckets bucket in the middle is just compassionate openness
you know family members and other people refugees you know because i was emigrated into canada not in the first bucket because we didn't have much to contribute economically but in the second bucket which is for social justice and refugees and then there is a third bucket which
is there are people that are not going to be in a position to wait in line they are going to come to the border and we have to have a mechanism of saying okay you shouldn't have done it but you did and now here's a pathway where you can earn the right to prove that you should be here and i think that there there there's a but we can't have that nuance because nobody wants to
hear it you want to lump it into one you know this is where for example like last year when trump you know decapitated the h-1b program i thought this is just so dumb yeah no nuance it's it's basically telling you know like uh it's forcing a star athlete you know to go and play a different sport why would you do that you know and it's so artificial it doesn't make any sense but
it's such a reasonable there's such a reasonable discussion to have here to be had here because other countries have solved this exact thing with the point based system australia canada new zealand and others have all worked on a system like this which is you get points for each of the
qualities that you bring and then you put some numbers on it but there is no yeah but jake out those countries are much much harder to get into than the united states getting into new zealand you better buy a property or something like that it might be that the point-based system is
letting in the people that make the society stronger no canada has a really progressive view on this i mean they have a point-based system but they do a lot they're really compassionate about you know the they'll take in a lot more refugees than than most other countries and i think that that they've never lost that spirit and i think that the point is i think i
agree with jason it's possible it's logical the problem is it's too logical and you know let's summarize it it's like i think freeburg made an interesting connection to the issue of free trade so you know look you know i majored in economics in college you know i i was like a believer in
free trade like sort of completely ardent free trade because why it creates economic efficiency and so you know it's logical it's logical and if people lose their jobs their factory closes because yeah we're not as good then yes you let the chips fall where they may i think what we've learned over the last 20 or 30 years is that we have to consider
the distributional consequences of a policy like free trade because it's about well who benefits and who loses and yes american consumers have benefited from the flow of cheap goods from china and other places but we've seen our manufacturing american producers have lost yeah and so throughout the the midwest and the rust belt you've got these empty factories they
just line up like like tombstones up in you know places like detroit and and you've got the you've got these towns that used to be factory towns that are now just kind of empty and the people are like hooked on fentanyl and it's a social disaster and so i think you know what i've kind
of learned about this is you have to take into account the consequences of these policies and i can't just do it you've evolved your position i have it can't just be about a darwinian economic efficiency anymore you have to think about who who wins and who loses and by the way everybody's got
a lot of the current globalization policy that the united states embraced over the last two or three decades um i think sacks correct me if i'm wrong but a lot of this originated during the clinton era which was uh you know a democratic president and then ironically the free trade republicans are
the ones who have flipped over the last couple of years to realize the economic consequence on the production side of the united states is so severe that we need to now limit free trade and if you remember paul ryan you know who was the house speaker a few years ago had this
six-point plan for the republicans going into the primaries and one of the key points was to you know enable the trans-pacific partnership they were trying to continue to push free trade and i think that the policy shift is ironic because it's always been kind of a red issue then it became a blue issue that became a red issue um and i think you know like
everything we are evolving our points of view as we experience and learn more things and get more data and perhaps pro the rate of progress isn't the thing to optimize for but the rate of progress balanced against the equality of progress seems to be where the united states is at right now
to respond to what what free book said about uh about how this happened so there's an old saying in washington that the best sorry that the worst ideas are bipartisan and the idea of bringing um china into the world trade organization and giving them sort of mfn trading status that happened under clinton but it was absolutely a bipartisan decision and part of the reason why
our our politics are so royal it was proposed it was proposed clinton it was past then bush right okay but they both supported it it was a bipartisan sort of disaster and i think one of the reasons why our politics are so royal today you've got this populism on the right and you've got a populism of the left and that where they both agree is in restraining is having
a more protectionist uh trade policy that's right so so i think i think a little bit of history here is important i think you got most of it right but if you go even one step back under clinton there was nothing that they actually did but it was something that deng xiaoping did
which was that you know for a large time i think until the mid 90s 94 the remin beg was firmly pegged to the u.s dollar and you know it was like you know 5.8 ramimbi to the u.s dollar and uh all of a sudden they basically said well look we have this hapless economy uh we have to do
something about it and we have this enormous bulge of young people and so they did this brilliant thing and china said you know we're going to basically devalue our currency and they're going to basically make it essentially float and instantly you re-rated the currency by 40 and over time it re-rated by almost 60 and what it did was all of a sudden it unleashed as you said
all of these subsidies into the united states why because now chinese goods became 30 cheaper right and then the thai goods became 30 cheaper indonesian goods became 80 cheaper right vietnamese goods became 50 cheaper that's that's that entire contagion in eastern asia that we went through in the late 90s so it's like china devalues their currency
all of a sudden you have all these young people in china who can make things for 30 cheaper you're able to flood the american market with goods we were like wow this is incredible my genes that cost ten dollars now cost seven dollars i'm just using it as a representative example
i'm just going to buy more genes and so you're consuming consuming consuming all of a sudden bush comes along and says well you know this seems to be working out well i want to go to war with iraq i need to basically get china to vote yes and the security council okay what's it going to take china's like admit me to the wto because even during all of this
they were still not part of the wto and to david's point and that's when the nuclear bomb went off in 2004 you know the minute that they were involved and they could actually have you know bilateral trade relationships and normalized trade relationships then all of a sudden the next wave happens because instead of just buying cheap chinese jeans
every american company was like wait a minute i can drive up earnings by just exporting this factory to china writ large and the chinese had all this capital that they had built up all these us dollars to then support it and subsidize it well it's a prisoner's dilemma right chemoth because if you don't do it as an american company and you don't
move your manufacturing there and everybody else does your shareholders your shareholders will decapitate your stock price you know as a ceo you get fired and so so then that's that's when david that what you said happened that's when you hollow out from 2014 to 2016 you hollow out the middle
class you hollowed out the inside the rust belt and then basically you de-industrialized the west you saw the rise of populism you saw the rise of opioids as essentially a coping mechanism for people's inability to even work hard right now that's americans are wired to work hard
right so they need to self-medicate if you can't let them work hard yeah they turn to fentanyl little opioids to do it and then all of a sudden donald trump gets elected in 2016. so what if we a man without hope is the man without fear you know you give people no job and no purpose in the morning what happens and the democratic parties turn to socialism i think that's like
part of it as well so this is really interesting because we're talking about second the sec i think everybody who was doing this was considering the second order problems and what we're experiencing now is the third order problem which is things that people couldn't predict like we now have a communist country that is not changing its human rights record and it's not changing
its uh behavior and might even be getting worse and we've enabled china but but jason china china will actually self-regulate i i actually think now the china issue is a little overblown the way we take it meaning i think china's central planners are frankly just much much smarter than ours right
they just are well they have central planning and they have better tools they don't they don't they don't have a domain communism limbic system that's just reactionary to their current or any legal system they have no legal system that should scare us that they're more effective planners than
than our our politicians but here's the thing here's the thing that smart policy can't outrun though it cannot outrun demographics and the most important takeaway that i learned over the last few weeks when i was studying this problem because i've been thinking a lot just currently like
okay inflation what's the 10-year view what's just gonna happen like what's my macro view of the world and i saw the most interesting stat which is the median age in china and the median age in south asia is greater now than the median age in america so it's in the mid 40s versus the mid 30s
and that's an enormously important thing because now you have an aging population in china you've had this one child policy that's really has worked against them for a very long time so they have they have an under representation of these young people and so you're flexing now into managing
a demographic shift where folks are older they're not going to work in a factory they're not making goods the same way they used to economic growth is tapering and so that whole china situation in fact demographically is going to solve itself but the implications for america are not good meaning
i think inflation goes up commodity prices go up prices of everything go up but it allows us to actually re-establish and rejuvenate the uh the industrialized rust belt of america we just have to spend the money and this is where i think like when you look at biden's plan this is where i wonder like didn't anybody do this simple macroeconomic you know trace route
to actually come up with this because it's pretty obvious what to do and then you wonder which is why i mean have have literally a trillion dollars allocated to reestablishing entire supply chains across critical industries that we want to own which i think friedberg you brought up what
15 episodes ago that this is an incredible opportunity for us to i think manufacturing here bring the next generation and reinvent manufacturing i still think biomanufacturing represents this um this complete a great domain where the united states could build and lead you know i'll just give you some statistics globally there's about 25 million liters
of fermentation capacity or biomanufacturing capacity of that about 20 million is used to make beer and wine and pharmaceutical drugs today in in an enclosed system five million is available for rent and of that four million is already rented out so there's only a million liters of
capacity really available for rent there's a hundred synthetic biology companies that are looking to produce fermentation based products from materials for clothing to food to animal protein to new drugs and they can't get the capacity to make this stuff and every one of them is scrambling around silicon valley looking to raise hundreds of millions of dollars of
venture funding to go build friggin manufacturing capacity for biomanufacturing this is where the united states can lead because we can make every material every drug and every consumable that the entire world would use using biomanufacturing and just to be clear by manufacturing that's effing go
so you edit the dna of an organism and it can be programmed to make a molecule for you and so we can use large fermenter tanks to make this stuff i did the math recently and you would need about 10 to 50 billion liters of capacity to make all the animal protein for the entire world and using 45 000 liter tanks which are three meters wide each it would take about 30 to
40 square miles of fermentation tanks to make all the protein for the whole world we could build that in the united states for about three to four for about three to four hundred billion dollars and we could build it in a couple of years i mean that is like a moonshot you could also make materials for clothing you could make detroit you you could make biopsy
put it there and and this is like this and because today the science exists as i go back to like the internet era we now have this ability to program organisms to make stuff for us this did not exist 10 years ago 15 years ago 20 years ago today is the moment it exists so if we don't capitalize
on this huge budget to build infrastructure to go after this massive opportunity to make everything that the world consumes we're going to miss out and free markets will compete us away this is the one time that big check can be written and that big check can enable this new industry and instead
of making cars and making you know all the stuff that maybe we don't need to be making you really think that all this uh trillions of infrastructure spending is going to what you just described that's my point it's not that's my point no it's not that's my point and i think that that
but that that's what i mean is we're missing this opportunity we're rebranding the same old social programs as infrastructure because the politicians know that's one of the last categories of spending that's still popular i mean it's not going to go to the right things it does it does those labels
those labels pull well when you say jobs like for example one of the things i learned which is insane is that for whatever reason people think fixing climate change is a net negative because it it will restrict one's way of life and destroy jobs whereas in fact it's the exact opposite right it should actually allow you to do more live healthier and there should be an entire
renaissance of industries and jobs and so it goes back to the disinformation just makes a rational conversation almost impossible speaking of politics we just shifted caitlyn jenner real quick before we rap because we're almost out of time caitlyn jenner is officially running for governor
and i guess people are making light of it but saks you you actually wrote a considered post on it so unpack it for us yeah i was defending caitlyn jenner i mean look i mean the the what caitlyn jenner came out and said is that gavin newsom's da's chase abudeen and george gasco in l.a are presiding i'm putting words in her mouth presiding over a crime wave
and she was calling him out on that and what you then immediately saw was all of gavin's people come out and criticize her for being stupid because supposedly she didn't know that da's were locally elected well i think a couple of points there first of all why hasn't gavin newsom come out and distance himself from chase abu dean and george gasco and what they're doing
in those cities he hasn't done that because he's been cozying up to their side that this sort of progressive extreme radical decarcerations wing of the party and the reason we know that is because he he recently had a job to fill the attorney general spot in california he could have chosen
anybody for that job and he chose um an east bay assemblyman named robonta for it who is an ally of chase abu dean and gascone and this progressive d.a alliance and so yeah it's true that newsom didn't appoint these da's but he's appointing their allies to posts that are even more important
that you know the attorney general of all of california and so i think it was a very legitimate issue for caitlyn jenner to come out and call out gavin newsom on and i think she's on to something here which is there's a lot of issues in california there's a lot of things that are wrong from homelessness to unemployment and these crazy coveted restrictions
but the number one issue i think has to be crime we are seeing an explosion of crime in our seat in our streets we all know there are large parts of la and san francisco that we do not feel comfortable walking around anymore oh my god you'd be crazy to walk down the street with a child the livable area where you can where you feel safe living or opening a business or walking
around has drastically shrunk in the last few years and if you do not feel safe in your city nothing else politically matters the government's first responsibility is to protect its people and i think if caitlyn jenner can keep speaking out on issues like this i think maybe she has a shot
yeah i think that she's got a credible shot if she has a reasonable economic policy behind it and you know this uh the school voucher thing on education those are the things that will carry uh california voters because i do think and by the way here's where i think we should take some credit
the best thing about this podcast other than the fact that we used ourselves to keep us sane it's it's made it it's made it fashionable fashionable to think independently again and eventually what becomes fashionable becomes the rigor and what that means is i think that there will be more and more people that will think for themselves and if she has reasonable policies
and a platform that's understandable she can win and that's an incredible testament i think to people making their own decisions and being able to have a reasonable conversation with people with different opinions i think is the other takeaway from the podcast that people always give me that
feedback when they uh see me on the street or whatever and talk to me about it and as a point uh going to austin they are now dealing with tent city problems like la and the same problems that they're dealing with we're dealing with in san francisco so i went for a walk around the lake a couple of times it was great and you know there were a lot of tents and
they're literally taking the most beautiful lake in the entire beautiful part of the city and it's becoming camp central they're basically ruining it for the the actual citizens who are not homeless austin lifted the tent ban they had uh in texas now texas is voting now
the entire conversation when i was in austin all conversations did not go to nfc's crypto the border or anything it went to tent city and people in austin who are very liberal were saying i'm voting to ban tent city i'm voting i'm voting against you know this insanity because it's we don't want to become san francisco we don't want to
become l.a so the and these are liberal people and the i the concept that a city would allow people to camp in the center of the city and ruin it for everybody else is insane portland's version of amsterdam is still up and running it's been a year i mean if people want to camp we have campgrounds for that send the campers to the campgrounds can i tell you the secret
origin story of miami and why miami is now a tech hub it's because of this issue it's because a tech entrepreneur got punched in the face by a homeless person in san francisco i don't know if he'd want me to tell the story i'll find out afterwards and you can beep out his name but basically
who is a prolific tech founder he's got i don't know if you'd want me to tell the story but he was out just you did two beeps fine we'll do two beeps anyway he was out walking around san francisco and a crazy homeless person just walk up and punch him in the face for no reason and this is something this homeless person's done many times the cops were there just kind of
shrugged didn't want to prosecute it didn't want to write up a ticket he's like no i really want to press charges so the cops like okay fine so then you know he presses charges nothing happens the da office basically keeps you know giving him the run around until he basically says fine forget it
he drops charges he just moves he just votes with his feet so he moves to miami he was the first one from that sort of like the sort of the core like silicon valley plugged in ecosystem to move out to miami he says he did the seed round then he talked to keith rabboy and he's
the one who convinced keith rabboy to move to miami so keith rabboy then he did the series a so was the seed investor of miami and he got rabbi do the series a and then rabboy you know he's very you know prominent and loud on social media he's been evangelizing the whole thing and then he got
delian and founders fund and their whole noise machine to move you know their circus to miami they've got a mayor of miami francis suarez who actually said we want tech here right you know and they don't they don't have a homeless problem the city has a lot of cops it's well managed so
look he's got the right environment and and most of all the city of miami is welcoming to the tech ecosystem where san francisco the politicians seem to can't wait to get rid of it but it's all comes back to this homeless issue i think if if and gotten punched in the face by the homeless person i think this all would have played out very differently it's very very true
let's wrap on a quick fang um i don't you must have seen every single major tech company had a massive blowout quarter and when i say massive i mean unbelievable and the five the five tech companies now collectively this year um will make more than 1.2 trillion dollars trillion with a t
of revenue if those five companies were a country it would be the 14th largest country in the world wow we're not talking market cap here folks we're talking cash in the bank account just revenue no no just revenue really right now which is which which i think is a good proxy for gdp and so the point is you know if these companies were countries collectively fang it would be um
a top 15 country and and if you and so i guess really what we've learned is what we've known which is okay these are monopolies they have pricing power you know unfortunately facebook had to actually even disclose that you know inventory only grew by 12 but prices grew by 35 percent um you know google basically showed the same thing and if you go back to
sort of like the pillar of andy truss law which is that 1970 odd supreme court case it defined what's called the consumer welfare test right so so you know the ftc and doj they're relatively toothless in the face of companies cutting prices but they can really act when companies raise prices
and here's where their definition of a monopoly which is brittle it doesn't account for 20 you know 2021 tech companies does come into play because now you can see that they're that they're winding up their pricing power if they can raise prices number one the second thing that i'll say is the apple facebook thing is a very important canary in the coal mine as well because it's not
as if the five of them can actually work together there's infighting right and so yeah it's game of thrones well with this new update to ios you know what those dialogues will essentially do in my opinion if i had to guess is limit inventory right so facebook and google will have fewer ads that
they can actually run in a targeted way and so the only way that they can keep them growing revenue with fewer impressions is by raising prices even more and then the last thing i'll say is uh you know this complicated dynamic between apple facebook and google is that google still pays apple almost 70 or 80 billion dollars for search whereas facebook pays them nothing so if you put
all these things in a box i think you're going to see the beginning of the end this is where now you can see the end game come into focus which is wedding well you don't need necessarily new laws in section 230 although we'll have that you now see fangm moving into the line of sight of the
traditional antitrust framework because now they can use very traditional you know anti-competitive pricing law to go after these guys i am going to i am going to strongly disagree with chamoth okay and i've not disagreed with chemotherapy strongly since we've done the podcast the the
reason i strongly disagree is because this is not inventory that is being sold at a fixed price where the price is set by the company facebook and google in particular run an auction model they are a marketplace business they have advertisers who show up and they bid on ads which is the inventory
that they're able to get based on the data that they're able to match to that particular ad slot if the advertisers can get more value by bidding a higher price because of the data that they're getting that shows that this customer is more likely to click on the ad and ultimately buy
something they will bid more for the ads what has been such an incredible juggernaut of a business for both google and then facebook which was effectively a mimic of google system was this auction model and the innovation has been in getting more data as you uh as you track consumers around the internet and secondly is in the smart ad targeting which is where the algorithm figures
out which ad to show the consumer based on whether that consumer is likely to click on the ad or not and the more consumers click on the ads the more advertisers are willing to pay for an impression because that ad is now going to con that ad is now going to convert to more revenue for them
that is why this is not a monopolistic approach it is an auction approach and i think and it's why they've won in the past over this argument but yeah go ahead i could go ahead at facebook my team was the one that built it um so i oversaw those guys back in 2008 and nine when we did the first
version of it obviously it's gotten much more sophisticated and you're right it's a vic reaction and literally my mandate to the team was i don't want your innovations copy google and give me a version of what google looks like and we're going to implement it there's a problem it's not exclusively that ads are not sold entirely based on that system ads
are sold direct via a team so for example when budweiser writes a hundred million dollar check or procter gamble they're not necessarily stepping in the auction the same way as a small and medium-sized business and if you look at how facebook and google have oriented their
policy they've only highlighted those people because david to those people you're absolutely right there's a very legitimate market clearing price argument for them but there are an entire class of advertisers that come in over the top i'm saying brand advertisers yeah that gets structured
deals that get structured apis they get structured access and facebook is and google is setting price and microsoft is setting price and so this is where that's the entry point because at the end of the day an impression to david friedberg whether it's seen by the local taco shop or procter gamble some of it will be a victory auction some of it will be structured inventory
it's a convoluted mess of the two you can't tease it out you're right at the end at the end it's about getting cpm higher right it's about cost per thousand impressions but it's a lot i think this is a good conversation this is episode 31 i would love to talk about some of my early days at
google and how how we made some of those decisions because i think it's it's instrument instrumental to how this is designed to be ultimately a system of commerce efficiency that's really important not just a system of selling ads but let's talk let's talk about it later yeah okay as we wrap most impressive um observation from these uh quarterly reports that just came out for me
amazon's ad business 24 billion growing at 77 year-over-year on top of their amazon web services business it'll be bigger than aws in three years at this rate yeah what's everyone else's uh what's everyone else's that to me was like whoa what was the most impressive thing for the rest of you guys on on there's a lot of impressive things here i have a second but go
ahead yeah it was unbelievably impressive but we have we have four enormous monopolies on our hands and if i was a betting man end of decade these four monopolies will not exist i'm not that bad oh broken up yeah by the end by the end of this decade so 20 30. yeah okay
log back that i'm willing to bet you dollars to donuts that what they they face breakup i'll bet a couple donuts you bet a couple dollars okay and we'll uh give the donuts to saks i'm off donuts zach what was your sacks what was your takeaway well i mean i would up level it
slightly in in antitrust there's historically two schools there's the bourke school and the brandeis school bork was narrowly focused just on consumer harm and would be closer to like the freeberg position the brandeis school is more about concentrations of power right and would be more concerned about you know not letting people get too powerful in this
american democracy and i think the interesting thing is now that there's folks on the right who definitely are buying into the brandeis school because of the restrictions on free speech and access to the marketplace of ideas that companies like amazon actually all of them at amazon google apple um facebook have all uh imposed they're limiting people's access to the
marketplace of ideas so i think now it's really interesting you're seeing a combination of both the right and the left get together saying these companies are too big they're too powerful i think the republicans are saying we'll let you keep the money we're not going to take your wealth the
democrats are saying we're going to take your your power and your wealth the republicans are saying we want to level your power a little bit but i think you know these forces are going to come together and i agree with chamoth i think i don't know exactly when but i think these companies are
going to get broken up and knocked down because they are too powerful oh it's a good it's a good it's a good counter argument sex i mean the other that that more important point of view of power uh versus uh you know economic harm to consumers is an important one clearly there's no accounting for
that quantitatively um and politics will drive it my i think like it's just incredible i mean if you guys think about it as a consumer i mean how incredible are the products that alphabet amazon and apple have made and free and all free they'll still exist if they get broken i mean even even the iphone like ordering stuff on android every day i'm amazed and i marvel at
the world we live in at the [ __ ] that we can do with the click of a button i mean it is such an incredible world we live in because of these businesses so as much as we can hound them for all the wealth here's the problem here's the problem is that apple and google in particular
have a monopoly on the applications that can exist on these these incredible phones yes and if you can't get access to the app store you you can't exist as an app and frankly you can't in the modern world if these guys cut you off and so we already saw a congressional hearing very recently in which um spotify and some other apps were testifying against google and apple because
the apple tax because yes because these platforms were discriminating against those applications in order to benefit themselves and i think that in particular has to be looked at and i think eventually stop two things two things apple just got sued by the eu today so they got slapped with
antitrust for their app store so that's gonna sort itself out as well so you have all this as jason said game of thrones i wanted to read to you guys something justin just put it in the chat this is something i said to brad gerstner in 2019 when we were he was interviewing me for something
and i think it's it's even more true today than it was in 2019. i said the following i said my perspective on facebook is the reason why the market gives it a small multiple because by the way you hear this all the time like my gosh these companies are so cheap why are they so cheap i said the reason why the market gives it such a small multiple is because
they don't believe the market the market doesn't believe that their earnings potential is durable because the market is sure that in the next 10 or so years governments will start to act because they care about their own self-preservation so if you get very reductionist at the end of the day
that's what governments care about and so they're going to legislate to protect their monopoly which is the ability to have power all right there it is folks a shout out from chamath to chamath in 2019 shout out i'd like to give a shout out to myself hold on jason no jason i would like to do this
don't hurt your arm patting yourself on the back you got to stretch that out with your functional stretching on sundays i get my functional stretch on love you besties can best when are you guys coming back please can we play poker now that we're all vaccinated i might have to i might have to go to new york next week to just round out my three can we book the uh can
we book the miami trip to moth let's let's go out there we're no we're doing a live show oh big news is coming everybody we are going to be putting up a voting mechanism you're going to be able to vote with your dollar with a tiny donation to see all in life whichever city gets the most donations
all right i'm just going to miami but where are we where are we going to donate the money to have we decided that or i mean i think it should be something relationally poker and the winner or you know do a single hand plow and the winner gets to decide the charity of their choice oh i like that
i like that that could be fun i mean i think something that we've already decided can we just decide to sell tickets in miami and new york and be done with the show miami i know i think miami and new york we could just do a one-two i mean it's a hot quick jump jamal you decide the date well the rest of us will make it work these guys are going to be there end of may we're going to
pick a date we're going to go to miami we're going to do the first taped live all-in and we're going to sell we're going to sell tickets for like 5 or 10 bucks all the proceeds go to charity it's got to be more like 50 or 25 because of the venue because we have to the venue's got to get there vig but anyway love you besties love you guys love you freeburg love you mom most of all
we'll see you all next time on the all in podcast bye bye let your winners ride rain man david and they've just gone crazy we should all just get a room and just have one big huge orgy because they're all just useless it's like this like sexual tension that they just need to release your feet