0:00
All right, his monthly burn rate would make even Bezos wince.
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0:01
He's living the life of a Sri Lankan prince.
0:04
He drinks nothing but the absolute highest top shelf.
0:08
He's lifting Italy's GDP by himself.
0:11
The dictator's back, Chamath Palihapitiya. And back to the program. Thank you, Jason. Okay.
0:17
When you mentioned that burn rate, I thought you could be talking about me.
0:19
I would buy THAT YOU WERE TALKING ABOUT IT.
0:20
SOMETIMES these intros, you're not sure which which way they're going to go. It's a misdirect. Comedy, a misdirect.
0:26
It is inconceivable that my burn is higher than David Sacks. I own one house. How is it possible?
0:34
And maybe one or two next week. You're such an ass.
0:39
He's analyzing macroeconomic charts and grids, while at the same time ignoring his kids. He's the sultan of sass. It's no surprise.
0:46
THE ONLY THING HEAVIER than his pockets, the bags under his eyes.
0:51
The rain man is back, David Sacks. It's not bad. Oh, here we go. Here we go.
0:58
The admiral of anxiety, he's rife with strife.
1:00
He plays a lot of his PS5, and he also plays one in real life. Meow.
1:05
The commander of the cat boys, David Friedberg.
1:07
I mean, I'm totally cool with that opening because you're going to look like an [ __ ] It's all good.
1:12
I mean, MORE OF AN [ __ ] I mean If you didn't ignore it every time Friedberg spoke, you would have heard that the guy from Annapurna Pictures reached out to him, gave him a link to download a free game about cats, which he downloaded and he's been playing.
1:26
It's now the most popular video game in the world.
1:28
You introduced the cat game. It's on you.
1:30
By the way, what shirt are you wearing?
1:31
It's looks like a carpet.
1:33
Yeah, you really do look like one of the characters from Goodfellas.
1:34
Like one of the older guys in the Kansas City Oh. Yeah.
1:38
I have my cigars right off screen here, and I got my nice coffee I got from Dunkin' Donuts.
1:43
You remind me of one of the guys in Kansas City from Casino.
1:45
You know, the guys sitting around the table in that restaurant.
1:49
It's like, "Should we whack him? Why take a chance? BOOM."
1:52
LISTEN, YOU YOU GET HIM YOU GOT MY STYLE ICON.
1:54
JOE PESCI'S my style icon. You look really bad. Thank you. Thank you.
2:10
And I said, we open sourced it to the fans and they've just gone crazy with it. GDP fell by 0.
2:19
9% in Q2 marking two straight quarters of negative growth.
2:26
In Q1 we all know GDP fell 1. 6%.
2:26
Here's the real GDP chart.
2:29
Current dollar GDP increased 7.
2:31
8% at annual rate or 465 billion in Q2 to a level of 24. 85 trillion.
2:40
Home construction down 14% ostensibly because of the interest rates increasing.
2:47
Inventories which helped boost GDP in 2021 21 dragged down growth in Q2.
2:49
So supply chains easing taking away two percentage points.
2:58
Uh Chamath, what's your take?
2:58
Do these year-over-year comparisons work?
2:59
Uh we were talking in the chat a little bit about the spike uh in 2021 versus the the dip in 2020.
3:08
What's your take on this?
3:08
I mean, I think you just summarized it.
3:09
People are really fixated on these numbers without understanding uh basic statistics.
3:17
So just taking a step back, if you go to the Bureau of Economic Analysis which is an official website of the government of the United States that posts GDP, the title makes it pretty self-obvious what we're dealing with here which it says, Nick, you can put it up there.
3:34
Real GDP, the percent change from the preceding quarter.
3:36
So things can still go up positively but still be negative if it doesn't go up by the same or more than the quarter before it.
3:46
The thing that we really have going on is that over the last eight quarters, we've had all kinds of very turbulent data that's made the trend line unpredictable.
3:55
And the most obvious way to see this is actually in one specific subsector, which we'll get to in a second, which is around US e-commerce adoption.
4:05
You see this one huge spike coming out of nowhere.
4:09
And then eventually everything has settled back to trend.
4:13
The same way, I think what we're waiting to figure out is how many quarters does it take for us to get back to on-trend growth in the economy.
4:21
We had a massive shortfall in Q2 of 2020.
4:25
We had a massive surplus in Q3 of 2020.
4:28
We've had a country that's been getting back to finding equilibrium over the last five quarters.
4:35
So, we don't really know what the steady state growth should be.
4:39
This is why I specifically had such an issue with the tone the White House took, which was trying to explain away this that this isn't a recession by trying to create doubt in the definition.
4:51
Instead, I think it would have been much better off just repeating what I just said and explaining basic statistics and actually showing that the country is headed in the right direction, largely speaking, from a really crazy one-time externality that nobody could have predicted.
5:08
That it's going to take some number of quarters, and so really what you should look at, and Jason, you've pointed to this, is employment and wages and try to be a little bit more circumspect in overreacting to any of data.
5:21
By the way, the Fed exactly just said the same thing yesterday when they raised 75 basis points.
5:28
They said, "We are not going to give guidance anymore because things are too turbulent.
5:33
We're going to remain vigilant on inflation, but mostly we're going to be very near-term data dependent."
5:40
So, I would boil all of this in saying, "Let's not overreact to a quarter's print here or there, and specifically the label.
5:47
I think the White House made a mistake in trying to basically think, you know, we all didn't understand what a technical recession was.
5:53
I think instead we should just focus on what we have to do to get back to solid state equilibrium.
5:57
Yeah, and just to put a pin in the definitions we all know the common definition two successive quarters of negative GDP.
6:08
However, people have said it's a a temporary economic decline during which trade and industry activity are reduced.
6:17
So, there's a sort of debate and splitting hairs going on Sachs, which was kind of stupid.
6:21
The big news this morning is that we no longer know what a recession is.
6:24
This is such a vast and complicated question.
6:30
You might as well be asking what is the meaning of life.
6:32
Now, I remember in the days of Republican presidents, we had a very simple definition of recession, which was two quarters of negative GDP growth, but now that we have a Democrat in the White House, we just can't know these things.
6:42
Why even ask such difficult questions, right?
6:44
I mean, that's basically the media coverage today and it's absurd.
6:47
I mean, and you saw for the last week the administration and spokespeople have been trying to muddy the waters on the definition of recession.
6:55
And it was laughable as they were doing it, but now you see the media coverage today and you realize like they've bought into this nonsense and they're carrying so much water for the administration.
7:04
Look, the headline should be the Biden recession has begun. That's it.
7:09
If you had 3 minutes and 45 seconds for your Biden over/under with Sachs, you took the under, you won. You're in a recession.
7:15
He's the president and if we had a Republican in the White House, it would be Republican president recession has begun. Yeah.
7:21
So, the media here is carrying so much water to try to avoid the obvious headline. I just explained it.
7:28
Instead of reporting the obvious headline, they're now saying that we're approaching a recession or we might be in a recession.
7:35
We have all these difficult technical issues.
7:36
Look, listen, we're in a a It started.
7:39
It might be a shallower recession. We don't know yet. Yeah.
7:43
Um the it's it's uh it's a recession in which the unemployment rate as of today is low, although the labor participation rate's also low.
7:50
So, listen, we're at the beginning of a recession.
7:55
It might turn out we might have a bounce in Q3.
7:56
This might be more of a double dip.
7:58
I suspect that's what it'll be.
8:00
But, we know the cause of this.
8:01
The cause of this recession is inflation.
8:03
If you look at the economy's growth on in nominal terms, it grew at 7.
8:08
something% but because inflation was at 9%, you have to subtract them in real terms, the economy is shrinking.
8:15
And who is at to blame for reces- for inflation?
8:19
Well, Jay Powell at the Fed cuz he reacted way too slowly, but also the Biden administration for all the spending they did.
8:24
How much sooner do you think they could have reacted? Two quarters?
8:27
No, like 9 months earlier. So, three quarters?
8:31
We got the We got that first surprise inflation print last summer.
8:32
It was May, I believe, that 5. 1% jump rate.
8:38
talk about 10-year break-evens, uh tips, in May of last year. Yeah.
8:40
So, they could have gone a quarter earlier. No, the 9 months.
8:45
And they continued Not only did they not raise rates, um or or signal any desire to raise rates for 6 months, they continued quantitative easing for 9 months, which just makes no sense.
8:56
What they should have taken their foot off the the accelerator right away. months.
8:59
They only start They only stopped in June of this past year.
9:00
So, we've only been quantitatively tightening for 2 months.
9:05
stopped the bond buying program in March. Maybe that's right. Yeah.
9:07
Yeah, but they they stopped quantitative easing in March, but you're right, the tightening is just something they're getting started with.
9:12
But, the point is they should have stopped easing, right?
9:16
Like, why would you need to keep intervening in in the in the markets to buy more to basically push out more money?
9:22
Is the reason for this that Powell and Yellen just haven't lived through highly inflationary times?
9:28
I just read They're older than I am.
9:30
They lived through the '70s.
9:32
they they haven't been in office and doing Fed policy like I I read Volcker's book.
9:37
If you haven't read it, it's pretty great, his biography.
9:38
I mean, what he had to do in '81, '82 was super severe.
9:43
Uh and but we just haven't lived through this in our lives, so I guess people are just not used to having to tap the brakes in our No. No.
9:49
Look, what happened is that the administration reacted in a political way to the inflation print.
9:56
They invented this word Well, the the the word transitory existed, but they applied it.
9:58
You heard this word used relentlessly for about 6 months.
10:03
So, the administration went into denial mode. Yeah.
10:06
And then by the end of the year, it became clear that it was persistent.
10:07
And I think the issue with Powell is that he is basically responding to headline risk. Right?
10:14
So, he didn't respond to, you know, the inflation problem last summer.
10:19
He waits until the in- the headlines tell him he has to react.
10:21
And so, now the the thing that he's worried about is is recession.
10:26
Obviously, he knew No, he's worried about inflation mostly, right?
10:31
He He wants to about inflation, but if you look at yesterday's Right, but if you look at his comments yesterday, he it was more dovish comments.
10:38
He did a 75-point rate hike, but the comments were more dovish, and I think it's because he knows that today we have this second consecutive quarter of negative GDP growth.
10:47
So, now he's trying to balance recession risk against inflation risk.
10:51
But, the point is that the Fed's been very slow to react, and the administration basically just tries to relabel and rebrand problems instead of confronting them head-on.
10:59
Hey Chamath, when we look at this chart you pulled up four, and we see this massive spike Q3, Q4, Q1, Q2, a little bit in Q3, and then Q4.
11:10
I mean, this massive uh 1 2 3 4 5 6 just extraordinary quarters, or five out of six in terms of GDP, that's all stimulus in your mind, right? This is the money drop.
11:22
No, there was lockdowns in Q2 2020, Jason.
11:24
They locked the economy down.
11:26
Yeah, but so people were spending online, and we'll get to the Chama- uh Chamath story about Spotify, but It's not all of it, but the the point is It's some combination of lockdown and state money, right?
11:35
Excess money because because of loose financial conditions distort what true supply and demand should be. Got it. Right?
11:43
And excess money can come from the government.
11:46
But in this case, excess government money went from the government into the hands of individuals who then participated in the public markets and they distorted what it what it all looked like.
11:55
And so, there was a lot of purchasing activity that was propped up by what seemed like an endless supply of free money. Right.
12:05
So, we look at Yeah, good.
12:05
And and so, now that that money is getting taken out we don't yet know what the real equilibrium economic growth rate should be because you have to remember we have not seen an era without federally introduced spending, without federally introduced forms of quantitative easing since the Great Financial Crisis.
12:24
So, we have been propping up our economy for 14 years straight now.
12:31
So, we have distorted the prices of bonds and fixed income.
12:33
We've distorted the prices of equities.
12:35
We've We've created an asset bubble in crypto out of nowhere.
12:42
And now we have to do the hard work of figuring out what the real supply demand is in the economy and we don't know.
12:49
six quarters here, there's six quarters of just massive GDP spike there from the preceding quarters and we have two down quarters.
12:55
Is it going to take six quarters to to wash this out or longer, I guess, is the question.
13:01
because what David said is now making the problem even worse.
13:03
So, because Powell was catering to whatever pressure he's been getting and he must be getting some severe pressure from the White House.
13:13
Those were really dovish comments, but what is the problem when he is dovish?
13:18
Well, the practical reality is a couple of things.
13:20
Number one is typically um the yields of long-dated bonds go down. Okay?
13:30
That essentially tells everybody else to reprice assets.
13:35
What does that practically do?
13:35
It makes the cost of borrowing roughly cheaper. Okay?
13:41
It makes the price of equities, particularly ones that are far out on the risk spectrum, so specifically let's focus on Nasdaq and crypto, right?
13:46
Tech stocks, biotech stocks and and crypto stocks go up much more aggressively.
13:53
So, what has Powell effectively done?
13:57
He has synthetically created a form of easing, again, right?
13:59
Like his job at the Federal Reserve, if you think about the money supply as a pipe, it's to shrink the pipe, to close off demand, to get things in equilibrium.
14:12
So, even though he's doing this, by the language that he's doing, he's effectively allowing market participants to basically guess that the worst is over and now we're going to start to expand the pipe again.
14:24
And so, they go to the end state.
14:24
So, what he effectively did in one speech is basically put a pin at the end of this year and is telling the markets I'm mostly going to be done and if anything, I'm probably going to be cutting in the back half of '23, go on your merry way.
14:42
And there is no CD Jason is it's now pushing the problem out another eight quarters.
14:49
Like we need to stop this nonsense.
14:49
He needs to be definitive and he needs to fundamentally break the back of inflation so that you find out what the true demand is in the economy. Yeah, and it we did 0. 75 yesterday.
15:01
The markets rallied on his sort of the assumption that he would do a couple of more of these rate hikes and then he'd be done at the second half of the year and then hey, maybe we can get back to growth or some normalcy.
15:16
In In related to all of this and by the way, there was an interesting story that Sachs would be interested in.
15:20
How did Did you read Paul Volcker's biography yet, Sachs? No, I've not read it.
15:26
Yeah, it's pretty I'm familiar with his record, but yeah.
15:30
Like at one point, Baker and Ray took Reagan and Volcker into a room off of the White House so it wasn't recorded and just said Volcker to Volcker, "The president does not want you to raise rates going into the '84 election. Full stop."
15:43
And Volcker's like, "Well, I wasn't planning on raising them."
15:45
So, there's a lot of politics in this even though people claim they'd already done enough.
15:49
I mean, Volcker raised rates all the way up to like 20%.
15:52
He broke the back of inflation.
15:53
It created a very severe recession in I think 1981-82, but by 1983, the economy was rocketing back Yeah.
16:01
with lower interest rates and and they basically solved the inflation problem.
16:06
Hopefully, we're not in that situation where Powell has to jack up rates so much to break the back of inflation cuz it means that we'd be in an even more serious recession.
16:13
So, I hope we're not in a Volcker-type situation.
16:20
about that spread, Sachs.
16:20
20% versus like 3 or 4% we're trying to get to.
16:25
We've never in the history of America ever had CPI print above 4 and 1/2 or 5% without inflation being brought down by having Fed funds not also be greater than 4 and 1/2 or 5%.
16:41
So, at some point inflation will turn over and will print 6 and 7% but that's still not below 4 and 1/2 or 5.
16:50
And right now, our target Fed funds rate is between 2. 25 and 2. 5%.
16:56
So, we could still be only 50% of the way there if inflation remains at 4 to 4 to 5%.
17:03
And this is what I think market participants don't want to hear.
17:08
They don't want to hear that there has to be a meaningful form of tightening.
17:12
And politicians don't want to hear that.
17:14
The White House for sure doesn't want to hear it.
17:16
The problem is that if Powell caters to too much of that feedback, he's not going to do what he's supposed to do and why he's put in that job.
17:24
His job is to get it to 2% and keep price stability and full employment. there is a balance here.
17:28
I mean, the reality is we do not want Powell tightening more than he should or more than is necessary to solve inflation cuz it will cause a serious recession.
17:38
So, I think we're we're caught between two pretty bad options here and it's because I think that what happened last year contributes to this.
17:45
I mean, look, if you go back to that chart that you just showed, what happened in Q2 of 2020?
17:47
We had a very healthy economy going into 2020 in 2019, right?
17:52
And then in Q2 of 2020, we had COVID, but we made the situation even worse with lockdowns and we should basically shut down the whole economy, brought it back at least in most states in Q3, and then the Fed started printing and Congress started printing $10 trillion.
18:09
Well, still by last year, the economy was back. We had something like 5. 7% annualized growth. This year it's negative. Why Why is that?
18:18
I mean, this may be the lingering effect of all that stimulus, but I think that Yeah, it is, but I do think that the administration made it worse by sending checks into an overheated economy.
18:30
They also created energy scarcity and they just kept, you know, spending more money.
18:36
So, not saying the White House isn't without fault, David, but I do think that if all of these geniuses could have actually just taken a simple econ and stats one on one class and explained how year-over-year measurements work to the American people, I think they're smart enough to understand it.
18:51
We didn't have to go down this convoluted route.
18:52
We could have just explained we put a lot of excess money in the economy.
18:56
We don't yet know what the full effect of that is.
18:58
We need to let that wash through.
19:02
In the meantime, you're going to see some crazy numbers from time to time and we just have to be patient.
19:05
And the other crazy things you're going to have looking at second and third-order effects is all these downstream effects.
19:14
People are making business decisions going into these economies.
19:15
Shopify just laid off 10% of its workforce, about a thousand people on Tuesday.
19:19
Their stock is down 10% past 5 days, overall 70% year-to-date.
19:25
Um and if you look at this chart and and Tobi took blame for this.
19:30
He basically said, "Listen, we thought that this was going to be a you know, fast forwarded to the future that people would adopt e-commerce in a major way and that would stick.
19:39
Here's US e-commerce adoption growth rate, massive spike when people were forced to buy all their goods online and now it is regressing to the mean."
19:52
I mean, mean reversion is a [ __ ] If you look at Shopify stock, if you look at Peloton stock, if you look at Affirm stock, if you look at Arc, you know, a lot of these things were trending in a great direction.
20:05
They had this short-term crazy behavior in the middle of all of this free money and now they've mean reverted.
20:11
And you know, we're in the midst of finding out what the real price is.
20:13
I got to give Tobi a huge um you know, round of applause because he is such a great CEO and I'll tell you why.
20:22
Last year in the middle of all of this wokeism, he wrote this incredible memo which was, you know, "We're not a family, we're a team."
20:32
Which I thought was exceptionally well written and really got the point across.
20:36
This time around, he just owned it.
20:36
He's like, you know, I made a huge bet that all of this behavior change was going to be discontinuous and permanent and it turned out I was wrong.
20:45
I'm sorry for that and here's how we're going to have to course correct.
20:48
In both cases, he kind of just put it all out there and he owned it and I think that that's all you can do when you make a bet and it's wrong.
20:56
And here's what he said, "It's now clear that bet didn't pay off.
20:59
Ultimately, placing this bet was my call to make and I got this wrong. Now we have to adjust.
21:03
As a consequence, we have to say goodbye to some of you today and I'm terribly sorry for that.
21:07
I mean everybody made that mistake, right?
21:08
So, you know, it is it's just you're right, Chamath. Just own it.
21:13
Everyone was thinking the same thing.
21:14
We all we're talking about how COVID was this acceleration this virus and it was going to accelerate all these trends.
21:21
And it the the acceleration rude awakening is going to be for all these people who made all these bets assuming that it's permanent and specifically I mean, you know, especially around real estate and work from home and all of this stuff benefits and it's all going to change now.
21:36
And the reason I say that is the combination of reversion to the mean will impact a company's bottom line and those boards of directors and CEOs will say, "Okay, we're just going to have to reset expectations."
21:48
And that's going to touch the employees.
21:50
I don't know if you saw this leaked transcript, but you know, Zuck was asked a question from this employee Oh god, that was a classic. That was unbelievable.
22:00
He was asking about his like emotional support days or something.
22:04
I mean in the in the middle of like Zuck having like a really serious, you know, heart-to-heart with the company about how we're going to have to buckle down and, you know, get this company back on the right track.
22:14
One dude one dude, you know, Schmengie from the back raised his hand and goes, "What about the COVID extra vacation days?
22:20
Will those get canceled?"
22:20
I mean, Zuckerberg almost like he literally his head almost exploded.
22:24
He's like, "Did you not just listen to what I said?
22:26
I just said if people are not performing at a high level, maybe they shouldn't be here and you're asking me about more days off?" that person.
22:34
To say like, "You obviously you don't get it.
22:37
You didn't listen to anything I said.
22:38
You're not right for this team at this time. Goodbye." a version of that.
22:42
He's like, "There's a lot of people here that may not be the right team."
22:45
Freeberg, when we look at these trends, okay, commerce seems like people are going back to shopping, but I want to ask you about two specific ones.
22:53
Healthcare, it does seem like telemedicine was one of those things that got got got during COVID.
23:02
Do you think that's going to revert to the mean or do you think that, you know, doing doctors visits over, you know, FaceTime and text and all these consultations going to stick with us?
23:10
And then what about work from home because that does not seem to be uh shifting all that much.
23:18
The work The work from home is not shifting?
23:21
Well, I mean, it's people are still staying home uh and, you know, uh Amazon just put a hold on six buildings where they said, "You can finish the outsides, but let's not do the insides because we don't even know what we're going to do with these buildings and what hybrid's going to look like."
23:33
And Zuckerberg hasn't been able to get people to come back to the office and Apple seems to be getting people two or three days a week.
23:38
So, it seems like it's still been a struggle and downtown San Francisco is empty.
23:44
So, we're we're getting mixed We're getting mixed results back now, I would say, is the best way to to describe it.
23:49
So, work from home and and telemedicine.
23:51
What do you think, Friedberg?
23:53
I mean, certainly the knowledge economy seems to prefer work from home.
23:55
I mean, if you're working on a computer and you don't need to interact with people, and you got kids or family, you're inclined to stay home.
24:05
So, that seems to be a sticking point.
24:07
Um you know, younger people probably have their own motivations, but there was a good stat on telehealth.
24:13
I'm just trying to find it.
24:15
And I think telehealth surged during COVID.
24:23
And 36% of patients used a telehealth service in 2021. 420% increase over 2019.
24:28
And so, despite some reversion post-COVID, post-lockdowns, um there's a significant sticking point that uh and I think 60% of telehealth patients are women.
24:43
So, there's particularly female services that are being rendered through telehealth at an increasing rate than pre-COVID.
24:51
And so, there's a lot of stuff.
24:51
I mean, you know, we've all had to go sit in the doctor's office for 2 hours to get some prescription or get a doctor to give us some advice on something they don't need to physically check us out for.
25:00
So, you know, it certainly seems to be a acceleration in that department. Offices.
25:06
What the Amazon like was working on 15 warehouses they shut down as well? Right?
25:10
I mean, if you guys remember at the start of COVID, when you'd place something on Amazon, it was like a 2-week delay because they didn't have enough capacity to fulfill the order volume.
25:18
You know, you looked at Toby's chart, it's nearly a doubling in e-commerce volume in a week.
25:24
When that happens, Amazon's, you know, plus or minus 5% supply chain has to revert to servicing twice as many customers.
25:30
It's just not going to happen.
25:31
So, they overbuilt, tried to get ahead of the curve.
25:33
Remember they hired like a, you know, 100,000 workers.
25:37
And, you know, they they they had to make a pipeline for quarters ahead to build warehouses.
25:41
Now they're realizing the demand's not going to be there and they're cutting back on 15 warehouses around the country and not going to build them.
25:47
They were buying up so many warehouses.
25:49
I had a couple of companies that were looking for warehouses in Los Angeles, Northern California, and Amazon just bought an option on every single warehouse they could find and now they're putting them back on the market.
25:59
So, they they definitely um went too heavy and then everybody started betting on Peloton and Teladoc.
26:04
And if you look at Teladoc, I mean, it's off 90% from the peak.
26:09
I I would I would show the um I would show the Peloton chart as well, but that would just be gratuitous.
26:15
Some some of the stuff to note is like at the end of the day, whatever product is better for the consumer, they're going to pick.
26:22
You know, what's the better way to buy shirts?
26:24
You know, what's the better way to get uh define better.
26:29
Yeah, I mean, for the consumer, it's like do you want to try them on or do you know what your size is, right?
26:32
Are you buying a brand that you know in a size you know, you're going to buy it online at this point?
26:35
I mean, the one thing COVID did is it basically created a trial by fire.
26:39
My parents never used DoorDash before COVID.
26:41
So, then they were forced to use DoorDash during COVID.
26:44
Now they know what it's like.
26:44
And so, you know, there are now people that never trialed a lot of these services that have trialed them and are now making decisions based on that experience.
26:54
But that's a beautiful example.
26:54
So just use your parents.
26:56
Why do you think let's assume they did.
26:58
Why do you think they mean reverted to now using DoorDash only in the same percentage as they would have otherwise X of a little bit of I think I think the quality of the food, the the time to wait, the experience of going out to dinner.
27:10
There's a lot of motivating factors that are different by different demos.
27:13
And so whatever the consumer wants, they're going to pick.
27:16
If I want to go have a dining experience in person with my friends, I'm going to go do that instead of sitting at home ordering DoorDash and having everyone come sit on the couch and eat dinner together.
27:24
So I think that there's this um you know, this call it mean reversion, but we have seen call it a broader exposure and we're really going to see the true market dynamics uh play out.
27:33
I don't think everyone wants to buy shoes online.
27:36
I don't think everyone wants to buy every piece of clothing online.
27:37
I think people want to go to the store and try stuff on.
27:40
I think it's that and I think that there's a lot of ancillary social benefits that come with a lot of these activities that you lose if you just optimize for efficiency.
27:49
So to your point like yeah, you can get a burrito, but even going to Chipotle with your friend is more fun.
27:58
Totally get out of the house.
27:59
Get out of the house, shooting the [ __ ] you know. Yeah. Yep.
28:02
Um it's just it's and the serendipity.
28:04
Yeah, you may run into somebody. Nothing beats that.
28:06
I will tell you by the way, I I I do believe that there is a counter narrative to the idea of work from home and e-commerce moving together.
28:15
I think as people work from home, they want to go be in person for other activities more. Yes.
28:21
So the the more you're working from home, the more you want to go to dinner with people or lunch with people, the more you want to go shop in person because you're stuck in the house all day and you want to go do other stuff.
28:30
And so if you're working in the office, you're going to do more e-commerce and if you're working at home, you're probably going to do less e-commerce.
28:35
So there's probably some net net balance.
28:38
We saw both of them rise together during COVID, but now there's more of a equilibrium being reached.
28:42
Well, I mean if you don't want to I think we're your behavior, you may stay home for 3 days straight and all of a sudden you're like, "Whoa."
28:48
and just remember 60% of the US population lives in urban areas where this is kind of an effective kind of conversation we're having.
28:54
I think outside of that it's a very different world.
28:57
And so for 40% of Americans this is not like the conversation that you know in in in deeply suburban and rural areas.
29:04
Do you guys know what shadow a ghost quitting is?
29:06
You know what ghost quitting is? Ghost quitting? Huh. I saw it on Tik Tok.
29:13
you stop working I saw it on Tik Tok. It's still getting paid.
29:16
It's when you decide to quit mentally but don't actually quit.
29:20
And so you basically get out get off the corporate rat race by doing the bare minimum to not get fired at a company.
29:28
Oh, like Sacks during the science segment.
29:29
And so I uh you know, I I think that there's all of these like invented things that people do that they think they can get away with which they generally can in a moment of prosperity where in a moment of actually like buckling down when earnings matter and profits matter and investor pressure matters.
29:48
All of this stuff I think is going to mean revert.
29:50
So this is sort of my my opinion on all of this which is I think that most of these behaviors will eventually take over.
29:59
But it's still many years away and right now we have to go through the process of just getting back to where we were meant to be in the first place.
30:05
I think one area with significant dis disequilibrium right now, I mean to your point, is is productivity.
30:10
I think it's very hard to assess and qualify productivity for knowledge workers in this environment.
30:19
And this is for employed base, right?
30:20
Remember we talked about last time like a large percentage of the US workforce has moved to more of an independent contractor sole service provider kind of model for how they're interacting and working in the world.
30:29
Um but I'm talking about knowledge workers in an employed environment.
30:36
And it is becoming difficult for managers and for companies to to you know, the the the quality and the level of work being produced relative to its potential.
30:43
It's not the same as it used to be when you'd be able to have in-person monitoring and interaction.
30:50
And so, you know, I saw a stat the other day where it was like most companies are asking workers to come home.
30:54
Most of the workers are to come to the office.
30:57
Most of the workers are saying no.
30:58
And then most of the bosses don't know what to say in response.
31:01
And they're still sitting on the sidelines like, "Okay.
31:05
Okay, don't come to work. Uh okay." Yeah.
31:08
Yeah. And so, there is this And by the way, this this may yield a competitive advantage for businesses um in the marketplace that figure out how to assess productivity and how to assess performance in their organization right
31:20
now in this rapidly shifted, totally different workforce um than what we had a few years ago because it's so easy to take 4 hours off in the afternoon, go to lunch, hang out, have beers, come back, get back online, get back on Slack, do stuff. And so, there's this real
31:32
And so, there's this real challenge um I think for organizations and and a real disequilibrium uh of productivity and output right now.
31:39
I've had to deal with this.
31:41
Have you guys looked at the TikToks of these people that are like day in the life of like a Google engineer or day in the life They don't work.
31:48
They're like 4 hours at the gym. They don't work. They don't work.
31:52
They're literally smoking weed and playing video games.
31:54
And everyone knows it, too. Managers know it.
31:56
Everybody's talking about it. Managers know it. Senior VPs know it. The CEOs know it. It's This is my point.
32:01
People just don't know how to manage it.
32:02
It's a real It's a It's a real disequilibrium in the workforce cuz the way you managed it before is everyone would show up to work or they wouldn't.
32:09
Someone was not in the office, they're not working, they get fired. Now what do you do?
32:11
You know, we And And no one wants to be monitored.
32:13
No one wants to manage keystrokes through a freaking remote computer and figure out how much you're typing.
32:18
Actually, uh it's interesting you mentioned that. you do, J Calton. You're employees. No, no, no, no, no, no.
32:22
There There are people doing that.
32:23
Call centers actually do that.
32:25
So, call centers and sales teams, they have monitoring software.
32:29
Customer service and call centers, totally.
32:30
Sales people, you can totally track productivity.
32:32
I'm talking about creators, producers, right? Like, yeah.
32:36
I actually have come up with some strategies for this.
32:37
So, we have a lot of writers uh doing newsletters and stuff like that.
32:40
And so, what we did was we created a block in the afternoon we've been testing where three writers will get together in a pod and they work on a newsletter together.
32:47
So, instead of three writers writing three different newsletters, you have three writers collaborate on three different newsletters.
32:54
They do one for 2 hours, one for 2 one for 90 minutes, one for 90 minutes, one for 90 minutes.
32:59
of three people read the newsletters?
33:01
Uh well, it's doing 4 or 5 million dollars a year in advertising.
33:03
It's hundreds of thousands of people a day. But, okay.
33:06
But anyway, the point is um I didn't mention the name of the company.
33:08
There's no plug in here, but Or don't this is your company. Yeah, no, no.
33:12
You put people in a Zoom or a huddle on Slack, which is like a an audio-only.
33:16
And then they have to deliver work to each other.
33:19
It's kind of how developers work or sales teams work with leads.
33:23
And then in things like coding Like pair programming.
33:26
pair programming, exactly.
33:26
And then with And it also makes people less lonely and it builds social fabric.
33:30
So, there are techniques that are emerging.
33:31
The other one I've looked at is I tell anybody, if you're doing any type of knowledge work, you need to create a Notion or a Coda page, depending on what you use, and update us on that, and then send it to the uh group chat, you know, to the general channel, "Hey, I was working on the strategy for this."
33:48
So, when people say they're working on strategy, I have them document it and I say share us share with us the Google Doc.
33:53
And I use the Amazon six-page you know, uh philosophy of a write-first culture.
33:58
And now people have to write it down.
34:00
So, I've been teaching people how to write, use Grammarly or Hemingway app to be better writers.
34:04
And then what you can do is as a manager, you can just look at your Notion or your Coda and see the change log.
34:11
And when I see people in a change log and I see they made no commits, I'm like, "What is this person doing?
34:15
They said they did all the strategy stuff. Where is it?
34:17
Where is the strategy stuff? Write it down."
34:19
So, if you switch to a write-first culture and then train people how to write and become more confident writers, all that knowledge gets captured on your knowledge base and you can actually see people getting done.
34:28
It's not perfect, but I think it's actually intellectually better than being in an office if you know how to do it because in an office people are also performative.
34:36
They're doing like [ __ ] meetings.
34:37
They're pretending they're working.
34:39
They they're they're actually reading the news or you know, or whatever.
34:43
So Sachs, what are you doing to monitor your employees covertly and keep them productive?
34:51
We don't need to monitor our employees that way because we're a small team of and they're highly motivated, you know, but look it it it is an issue.
34:57
I don't I I think where work from home is beneficial is on the hiring side, right?
35:04
It's so much easier to hire for a job when your potential pool is anyone in the world.
35:09
You're not just geographically limited to the city in which your office is.
35:12
So that was the temptation for all these companies to go remote is it made hiring so much easier.
35:19
But there's no question that it makes management much harder and scaling the company much harder and building culture much harder.
35:24
And so there's some real trade-offs there.
35:26
I don't think companies have totally wrapped their heads around it, but look, in addition to productivity, there's one other aspect of this economy that I think's really broken.
35:33
So the the Chamber of Commerce says that 3.
35:35
25 million fewer Americans are working today than they were in February of 2020.
35:41
So basically, if you go back to the month before COVID, we had over 3 million more Americans in jobs than we do today.
35:48
And yet the unemployment rate is still in the 3% range and the reason is because that if somebody drops out of the labor force and isn't looking for work, they don't get counted in the unemployment rate.
36:01
So we do have a if you define unemployment as a large number of people who aren't working, we have a huge unemployment problem.
36:07
But the problem is they're not they're not counted because they're supposedly not not looking for work.
36:13
So I don't think this economy is that healthy and and I think that there's a lot of distortions that have been created by government in the last couple is suspect is what you're saying, right?
36:24
Like labor participation is down.
36:26
that the data is suspect, the labels are suspect.
36:28
I mean, like we talked about, all of a sudden we can't know what a recession is.
36:32
And let's just bring up one other thing that just happened today.
36:35
So, Manchin cut a deal with Schumer to bring back to bring back a slimmed-down version of BBB.
36:41
Thankfully, it's not 4 trillion like Biden wanted, it's 750 trillion, okay?
36:45
But what do they call it? Billy billion, right?
36:50
Okay, so you know, thankfully it's it's a slimmed-down bill.
36:52
But what are they calling this?
36:53
They're all of a sudden calling it the Inflation Reduction Act Wait, what? of 2022. What what? are you kidding?
36:59
This doesn't pass the laugh test.
37:01
they Are they trolling us with the names of these bills?
37:03
The bills are never what's in the bill.
37:05
Why don't they just call it the green energy bill and the screw private equity bill?
37:08
I mean, that's basically what it is. Yeah.
37:13
Inflation Reduction sells to everyone, right?
37:14
But Jason, the the media the media is not holding the administration accountable.
37:18
If we had if we had an honest media, they the the headline today would be You can't get it from me.
37:25
That train's left the station, Sachs.
37:25
We you can only get it on this pod or other podcasts.
37:29
Yeah, I mean What did President Manchin get for this deal? He agreed to it.
37:33
What did What did President Manchin get?
37:34
Well, he he he secured some bag, right?
37:36
Did you see what I sent you in the group chat?
37:38
There are going to be huge Why did he agree?
37:41
He's like, I got a pipeline.
37:41
There's going to be huge uh handouts and pork for the state of West Virginia.
37:46
There's no question about it.
37:47
I mean, if you look at this bill, okay, they I mean, let me just We should just look at what's in it.
37:51
And more and more is going to come out over the next few weeks, right?
37:54
It's only one day old, so we're going to learn a lot more about what's in this.
37:58
But the largest thing The Republicans feel like Can you explain the dynamic as well after you get through this of why the Republicans felt like now that he double-crossed them?
38:07
Because the Democrats felt double-crossed by Manchin President Manchin, and now the Republicans are feeling double-crossed by President Manchin.
38:14
Well, I I don't know that you can use the word double-cross cuz he's not a Republican, and he had no obligation.
38:19
But look, but there's no question that Manchin went back on what he said.
38:23
Just a few weeks ago, he was saying that Build Back Better was unacceptable because it would contribute to the inflation problem.
38:28
In fact, he's been saying that since last summer.
38:31
He's been saying that we have a growing inflation problem.
38:33
We can't contribute to it with a lot more government spending.
38:36
Now, he's agreed to a $750 $750 billion, of of which something like 450 is new spending.
38:42
So, yeah, it's it's it's a smaller package than we had before, but if your concern was inflation a few weeks ago, you can't justify this.
38:54
You certainly can't call it an inflation reduction act.
38:55
I mean, that's just patently dishonest.
38:58
Well, how do they come up with it being inflation reduction?
39:03
Is it because the healthcare stuff is theoretically going to help consumers have more money to spend?
39:11
Look, I think it's a it's a ten it's a tenuous argument, but if you want to if you want to make the argument, there's some cap on what seniors pay for prescription drugs, and then there are subsidies for people who are in the market for an electric vehicle.
39:21
However, those are small adjustments.
39:24
It those are small rebates to a small segment of the population.
39:29
I don't think you can argue in good faith that this bill will reduce CPI.
39:32
It just doesn't you know, that's just not a plausible argument.
39:37
And the vast majority of the bill, like you said, are subsidies for clean energy, which are basically handouts to special interests in the donor class in the Democratic Party.
39:45
Just let me just itemize some of these things.
39:47
So, the largest single outlay, $60 billion, is for quote environmental justice initiatives to address the unequal effects of pollution on low-income communities and communities of color.
39:59
This includes $3 billion to invest in community-led projects in Hispanic communities, and another $3 billion to support neighborhood equity, safety, and affordable transportation access.
40:08
Another $30 billion shoveled to states in the form of grant and loan programs for states' electric utilities to advance the green energy transition.
40:14
$30 billion for additional production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries, and critical minerals processing.
40:22
So, it's basically going to companies, right?
40:24
20 billion in loans to build new clean vehicle manufacturing facilities across the US, and 2 billion to revamp existing auto plants to make clean vehicles.
40:32
20 billion for the agricultural sector to quote curb emissions.
40:36
3 billion to reduce air pollution at ports.
40:39
10 billion investment tax credit to manufacturing facilities for things like electric vehicles, wind turbines, and solar panels.
40:47
This seems redundant to the 30 billion dollar outlay I just mentioned, but it's another giveaway to Democratic donors and you know Wouldn't that be good for Chamath?
40:56
Wouldn't that spending be good for energy independence in addition to climate?
41:00
Because we've been talking about being energy independent.
41:01
If we have more EVs, more batteries, more solar, that's a good thing, right?
41:04
We want to be energy independent.
41:06
So, this seems like we get two wins, or possibly three.
41:10
One, we we get economic activity.
41:13
Two, we reduce our dependence on foreign oil.
41:15
And three, we stop burning a hole in the ozone and increasing the temperature of the planet.
41:20
It seems like three good things.
41:21
We have to I think we have to see the forest and the trees here.
41:27
And there's a there's one good part of this bill.
41:32
And then there's the kind of more ugly reality that it avoids.
41:36
The ugly reality is unfortunately or fortunately, or maybe without taking emotion out of it.
41:43
We are dependent on fossil fuels for a very long time.
41:49
It is a necessary bridge fuel.
41:52
And so, we need to if we're talking about energy independence, it can't happen without us frankly drilling more and subsidizing the capital incentives of private companies to go and do this exploration work, which they have stopped, Jason.
42:06
And the reason they've stopped is that they don't trust that these oil prices will stay this high.
42:11
And so, they don't want to make these outlays and investments for the next 5 to 10 years because they're worried that it's going to be a rug pull.
42:18
Which did happen to them in the back half of last decade and the early parts of this decade.
42:22
So, they're like once bitten twice shy.
42:25
They're not They're not going to touch this stuff.
42:27
Are you saying oil companies that would do some exploration, it would cost them whatever amount $2 to get the gasoline out of to get the gasoline out of the earth and then process it, but they're afraid it's going to be negative.
42:40
They're not going to be able to sell that gasoline or whatever.
42:41
I think they're afraid that you know, the United States government may impinge on their ability to actually process it.
42:47
That it may There may be tariffs and costs and taxes that they don't They'll be upside down. forecast. They'll be upside down.
42:52
So, they just don't want to be And right now, and you saw this I don't know if you guys saw it, but like Shell and Exxon and these guys are printing enormous record profits.
43:00
So, their incentives to change the status quo right now is zero.
43:05
They want less supply because then they can raise prices.
43:07
They have the perfect situation right now, which is it's an incredibly energy-intensive world we live in and we don't have nearly enough energy to do the work that needs to get done.
43:16
And And by the way, and you saw this this week already where you know, Putin cut Nord Stream by another 50%.
43:22
It was already running at 40% capacity.
43:24
He He cut it down to 20%. It's only getting worse. So, I don't know.
43:31
I mean, I think this bill could be good.
43:33
I haven't looked at the specifics to give you a very Well, the specifics aren't even out yet.
43:36
We're very very fine green green on it.
43:38
I did see the EV credits Friedberg and I thought that these were particularly well constructed.
43:45
7,500 bucks off of a new car, but you have to be in the 150k salary or less on your taxes.
43:53
So, rich people can't get these and it can only be for an $80,000 new car, a $50,000 or $25,000 used.
43:57
And so they they did seem to be staggered pretty well.
44:02
And I do know that those incentives did work in the early days of Tesla because when you went to the website, you would look at the price and you know, this would be 10% off of a of a new car and they they did drive sales and it it was pretty significant.
44:14
What are your thoughts on the EV tax credits?
44:18
That's something that's a wise thing and then what do you think overall about spending a couple of hundred billion dollars on reducing emissions and becoming more energy independent at the same time.
44:28
Seems like a laudable strategy to you?
44:31
Nope, seems like a total waste of money. Okay, unpack it, please.
44:35
The the EV tax credit is just giving away money to EV car manufacturers.
44:40
There's already enough demand, the prices are low enough.
44:43
There's enough consumer interest, there's enough consumer intent.
44:46
I don't think you need to put this money out there, distort the market that's already functioning well.
44:53
And this goes back to my point about the role of you know, government and how we create, you know, create incentives or spend money.
45:00
This is not a place we need to be spending money because there isn't an absolute need.
45:03
There's no data that indicates that this will accelerate a transition to a carbon-free economy or that it's even needed.
45:11
It really is a a point of view that people hold and they believe that EVs are good, they're good for climate change, we should accelerate it, therefore we should spend money on it without any accountability or proof that these tax credits will actually motivate a market to move faster or quicker than it is already moving.
45:29
And so it is just spending taxpayer dollars that could theoretically not be spent or be spent in a more effective way to improve the lives of people broadly in this country.
45:37
So, yeah, I don't I don't fully agree with that.
45:40
I haven't seen any data that tells me this makes sense.
45:44
Anecdotally, you can $7,500 off of $75,000 EV is attractive EVs are $75,000.
45:50
GM and others have great low-priced EVs and there's a ton of market demand and they can't keep up with production.
45:56
And you know, giving people $7,500 off a car that the manufacturers are still struggling to keep up with making because there's so much demand already, you don't need to do it.
46:04
It is so much cheaper to drive an electric vehicle now um by plugging this thing in than spending money on gas that people already want to buy these things.
46:10
They pay for themselves super fast.
46:11
Every consumer wants to save money on transportation and you will save money by buying an electric vehicle.
46:18
So, you will already buy an electric vehicle.
46:21
You don't need government money to get you to buy an electric vehicle.
46:23
To Freeberg's point, there is a lot of um analysis that's been done on consumer adoption patterns and typically for a new good or service, the tipping point is around 5% mass market adoption from when it goes from early adopters to the mass market. And EVs just crossed 5%.
46:42
So, to his point, the historical data would tell you that we're now past the critical point where it's no longer questionable and now it's just going to happen.
46:51
So, It's not early adopters.
46:52
We're getting to the the mass market. market.
46:55
I mean, I'll tell you like the best the best thing about EV adoption or for me for having an EV is never having to go to the gas station to pump gas. Amazing. Amazing, yeah.
47:04
I mean, just just that one thing is a game changer.
47:07
give you guys currently it's about um 34.
47:10
6 kilowatt per 100 miles.
47:14
Okay, I'll just get Let's just do some math together.
47:16
Let's say a kilowatt hour in the US costs about 10 cents. Okay? So, that's about $3.
47:20
50 to drive 100 miles in an electric car.
47:27
That's a lot cheaper than paying $15 for gas to drive the same distance in a gas car.
47:31
You don't need the tax credit to get people to buy these things.
47:34
These cars are financeable.
47:35
There's a very liquid, very active lending market.
47:37
You You get paid back on these cars within a few months if you're better off than you were if you were going to direct some stimulus to not stimulate anything right now.
47:48
We don't We just talked about how we don't need to stimulate the economy.
47:51
I would not do any know where the economy I'm not talking about the economy.
47:54
I'm talking about to You You would believe global warming's happening, Friedberg. Yes?
47:58
Look, you want my point of view on climate change and industry.
48:02
I I think I think humans I think humans are on a driven, naturally market-driven path to resolving um carbon output in our industrial systems.
48:15
And I don't think that government intervention with tax credits and specific consumer product is actually going to accelerate or resolve um you know, these changes that are needed.
48:23
We need to not change consumer behavior.
48:27
Consumers always want to have cheaper, faster, better.
48:30
What we need and you know, at the end of the day what we need to do is change the way that we're producing and making things because that's ultimately what's going to drive this transition. And guess what?
48:37
Consumers are demanding things that are, you know, more efficient, that are more effective.
48:41
And efficiency ultimately resolves to less carbon, ultimately resolves to less land, less energy.
48:46
And industry has always resolved to greater efficiency.
48:52
Natural market forces improve the efficiency of every industrial system So, stimulus not necessary.
48:56
mankind has ever created.
48:59
And I think that it is a matter of um time and uh a matter of natural evolution that we will resolve all of the factors that are driving climate change, from animal agriculture to transportation systems to energy systems.
49:11
These are all going to get completely rewritten Will we do it in time though? with technical tools. We absolutely will.
49:15
And at the end of the day, we can pull carbon out of the atmosphere and resolve it into products.
49:21
We have tools to do that as well.
49:22
So, I am an eternal optimist.
49:24
But in this particular case, I think that this century much of what we're throwing our hands about.
49:28
And you remember at the beginning of the 20th century, we thought we were going to run out of food.
49:32
Then suddenly we invented the Haber-Bosch process and created fertilizer out of air.
49:36
It was an incredible, incredible invention that saved mankind.
49:40
We have had time and time again in the history of humanity these thoughts that we're in an existential crisis.
49:46
We thought we would have peak oil.
49:47
And we have had these And we have had these points of view that we're in an existential crisis and humanity is about to end and every single time we figured out a way out of it.
49:55
And we didn't figure out a way out of it because the government came along and said, "Here's a tax credit."
49:59
And we've gotten sick and we've gotten drunk on government spending and we think that it is the the solution to every problem we have as a species.
50:07
You know what the biggest solution to our problems is? Our ingenuity.
50:10
And then let the markets figure it out.
50:12
Consumers are smart, businesses are smart, they will figure out ways to resolve these solutions.
50:17
They don't need to have these handouts.
50:19
And I think that that's that's a really important point that we've kind of missed.
50:22
And I'll say, we were talking earlier about the economy, this stimulus, we've been giving ourselves caffeine since 2008 when the Fed started to build up this balance sheet.
50:28
And we got used to the idea, remember before this it was like, "Oh my god, multi-million dollar bills."
50:33
And then it became multi-billion dollar bills.
50:34
Then we had an 800 billion dollar bailout in 2008.
50:37
And suddenly it was the multiple of 100 billion and then multiple of a trillion.
50:41
And this expectation now, we've kind of reset the clock and everything now is in what multiple of 100 billion or what multiple of trillion we're going to spend on stuff.
50:49
And no one's even batting an eye at the size of these the the the bills anymore.
50:54
Freeberg, what is a bigger existential threat to the United States?
50:56
Is it climate or is it overspending by our government?
51:01
I think it's over um I think the biggest threat is is productivity.
51:06
Um I think that as a as a society we've gotten to the point that we are so well off that we have so many things that we don't realize we didn't have 50 years ago and you know, read Pinker's book on Enlightenment Now and just go through those 200 charts he puts in there.
51:21
It will blow your mind and then if you actually sit down and think about it in a broader perspective on where we sit in this country today versus where we were 100 years, 50 years, even 30 years ago, you will say, "Oh my god, we live in an absolute luxurious state in this country."
51:35
Golden Golden era and it is a condition that unfortunately reaps um you know, a decline in productivity because at that point To some degree, some people are entitled.
51:49
There are many people in this country that are still very hungry.
51:52
There are many people in this country that still want to progress.
51:53
And frankly, I think a lot of the the lax behavior from government entities actually holds us back from accelerating our productivity outcomes because it gives people many incentives and many reasons and industry many incentives and many reasons to not solve problems.
52:07
many reasons to not solve problems. And I think that we solve problems and we're left to our own kind of There was an article I posted, Nick, you can put it in, about the Congo and that they've decided to auction a bunch of land to oil companies and um I think before they tried to heed sort
52:27
of, you know, the West's directives and they said, "Okay, well, let's build a land bank and we'll put a bunch of money in and so then the you know, people in the in the Congo will have money for things and you won't have to sell off the oil rights and only tens of millions of dollars showed up. And then the
52:43
And then the Congolese were like, they threw up their hand.
52:45
I'll just read the quote because I think it's interesting.
52:47
"Congo's sole goal for the auction," said the government official, "is to earn enough revenue to help the struggling nation finance programs to reduce poverty and generate badly needed economic growth.
52:57
That is our priority," he said.
53:00
"Our priority is not to save the planet."
53:02
That's quite a stark statement when you read it, but but the reality is in one generation what will happen is they will feed the world's desire for fossil fuels.
53:12
That will generate a lot of revenue.
53:15
Hopefully, it doesn't get pilfered and so it gets invested in healthcare and education.
53:18
And within a generation, this country could be in a completely different situation allowing the productivity of that entire population of that country to do what they think is right.
53:29
So, I'm I'm generally of the belief that that that Friedberg's right on this.
53:34
Do you think that we should subsidize EVs to increase the percentage and then also for solar?
53:39
Just give me those two, Chamath. Solar and EVs.
53:40
Do you think they should be subsidized or not in the United States?
53:44
It depends on how and at what point of the market cycle.
53:50
The government's job is to create economic incentives that tip the balance of power towards investment.
53:59
So, if you are sitting here 15 years ago, the price of solar panels was sky-high.
54:06
It was incomprehensible that we could make solar equivalent to any other form of energy.
54:12
The only way that we were able to close the gap was through government subsidies.
54:16
But, what that did was allow a bunch of companies to build businesses, to make revenues, and then also to make profits that then the public markets valued.
54:28
Those public markets then put pressure on those companies to take those profits, to become more efficient, to make the panels cheaper, and 15 years later we're now at parity.
54:36
So, that was a a really great example of the government stepping in to smooth out an imbalance in the investment incentive of the private markets.
54:49
That is where they are exceptional.
54:49
So, in any market, they should be able to do this.
54:56
But, I think what Freeburg is saying is when then they do do it successfully, and a market starts to germinate on its own, where supply and demand happens naturally between the private markets, the worst thing a government can do is step in because it completely perturbs what true supply or true demand is.
55:15
And that is what causes all of this crazy stuff that we deal with. J Cal, fast forward.
55:21
Assume that there's a $7,500 tax credit for EVs that artificially makes EVs cheaper.
55:24
And then a better technology than EVs comes along.
55:28
Let's assume it's some nuclear fusion, cold fusion, Mr.
55:30
Fusion car like from Back to the Future.
55:33
And that car inevitably has to fight against the cheaper car because the cheaper car is subsidized by the government.
55:39
We see this in a lot of markets that already exist in food, in energy, in infrastructure, where government subsidies that are embedded in the operating model of that industry, and that industry becomes kind of reliant and dependent on it, totally distorts the ability for the market to naturally transition to a more productive, more efficient state.
55:59
And that more productive, more efficient state ultimately is cheaper, better for consumers, and better for the planet.
56:06
And we're we hold ourselves back when we insert government dollars into well-functioning markets.
56:10
I do think the government has an important role, as I mentioned last time, in pure science, in seeding new markets, in seeding these opportunities, in identifying paths that are quantum leap efficiency improvements in production systems, in industrial systems, in ways of living.
56:24
Once those have been identified, they've those breakthroughs have been kind of catalyzed, boom, let the market take off cuz it's going to take off.
56:32
But we shouldn't be in this business Do you believe EVs and solar are there already? Absolutely. They're cheaper.
56:37
And so let me point let me just give you one one point of reference.
56:40
Let's let's use Chamath's Congolese example.
56:41
Let's assume that there's someone that lives in the Congo.
56:45
And I said to this person, who's probably subsisting on less than $3,000 a year of income, and they're probably living, you know, day-to-day on finding food.
56:53
And you said to this person, in the United States, they have these cars, they're called electric cars, and they're cheaper than gas cars, and they're you you make more money or you save money by buying one of these cars, and they're cheaper now.
57:05
And we're giving people $7,500 to buy one.
57:07
This person who's making three grand a year would say, "What?"
57:12
It is a state of luxury that allows us to do this, and frankly, I think it's it's a state of excess abundance.
57:18
And that's what I'm most worried about.
57:23
Sacks, what are your thoughts on the government giving these type of subsidies to accelerate solar and EVs?
57:28
The whole bill seems anachronistic.
57:31
You know, first of all, it's raising taxes by 739 billion at a time when we're entering a recession.
57:36
I don't know any economist who thinks that tax increases help the economy.
57:39
We just talked about how the economy is in a really tenuous position.
57:44
So, this is not the right medicine right now.
57:48
Then you've got the fact that the vast majority of the spending this bill goes to these, you know, energy subsidies, which are just they're not going to help the average person.
57:58
There's very little money in this bill that helps the average working-class person.
58:02
These are basically handouts.
58:03
This is basically pork-barrel spending for Democratic Party donors and special interests.
58:07
And, like Freeberg, I think just articulated it very well, they're not necessary right now.
58:13
The what's driving demand for electric vehicles and solar panels and so on is, first of all, the products just keep getting better and better.
58:21
And, second, they keep moving down the cost curve.
58:22
As technology and innovation gets better, these prices get cheaper.
58:26
That's what's fundamentally driving the demand.
58:27
We don't need the government now, We feel we need to accelerate it.
58:31
in an anachronistic way to shovel out all this money at a time we can't afford it.
58:36
And I look, I'm glad that 300 billion of the bill is supposedly going to deficit reduction.
58:40
I hope those numbers actually materialize.
58:42
But, we're still 30 trillion in debt.
58:44
And now that interest rates have gone from basically zero to around 3%, the imputed debt service on our debt's basically gone has increased by almost a trillion dollars. That is a lot of money.
58:58
like somebody who had a variable mortgage, the United States is on a variable mortgage with our debt.
59:00
And so, when interest rates go up, we're going to have to pay more interest.
59:06
if interest rates stay at this, call it 3% level, which is roughly where the 10-year T-bill's been, you know, bouncing around at, that is a lot of debt service, a trillion dollars a year of debt service.
59:16
So, I think we're probably entering an era an overall era of austerity that lasts more than just this year or even this presidency.
59:25
And I think we'll look back at all of this wasteful spending this last 10 20 trillion of spending as money we didn't need to spend that we're going to be paying for for a long time.
59:33
So to be shoveling out another 300 billion plus of these programs and again once again going to corporations and special interests not to the average you know person who needs it is just so irresponsible.
59:48
I have a question for Friedberg.
59:50
One of the one of your exceptions there was investments in science.
59:56
You want to talk about your opinion on the quality of the grant process at the NIH and whether we're doing the real work necessary to get the right things funded.
1:00:10
Yeah, I mean I think it's a good transition to what happened this week which was that there was a a major a potential fraud uncovered in Alzheimer's research which has led to over a billion and a half dollars of of funding and grants being given out to follow on Alzheimer's research programs in the years that followed this initial paper.
1:00:32
So you know in um 2006 there was a paper uh published in the journal Nature um about amyloid beta uh proteins uh that impaired memory in brains which then became kind of the leading theory for the cause and the driver of Alzheimer's disease and much of the research and funding that followed from there which is now up to nine sev- several billion dollars uh in in total funding in private and public institutions.
1:01:06
Last year alone the NIH funded 287 million dollars in research into amyloid beta and it turns out that the initial paper was shown to be fraudulent.
1:01:17
Uh and so you know just uh, recently uh, the journal Science published in detail an analysis of the photos of the Western blot measurements, the protein recognition images that the scientist used in this initial paper were forged.
1:01:35
And that many papers of his were then forged years later.
1:01:37
And um, this paper is one of the most cited papers in Alzheimer's research, and much of the work that's been done on Alzheimer's came out of this.
1:01:46
Um, and if you guys remember last year we talked about that Biogen drug?
1:01:48
That Biogen drug is meant to stop amyloid beta plaque.
1:01:52
And you know, the projection is that Alzheimer's drug and and remember there was a panel of scientists that looked at the data for that drug, that Biogen got approval for from the FDA.
1:02:02
And they all said this does not show conclusively in any way that it improves Alzheimer's.
1:02:06
And the FDA still approved the drug because so much of the NIH funding went into the research uh, for uh, amyloid beta.
1:02:13
And so, the assumption has always been this is the cause of Alzheimer's, this is the way to resolve it, and everyone gets so strongly held in that core belief, and there's so much money behind it, that we can't turn away and say maybe we're wrong.
1:02:28
And this is the problem when science meets money.
1:02:32
Um, once you go from funding something and then sign suddenly a whole bunch more money pours into it, everyone's going to look bad, and everything's going to fall apart, and everyone fears that the system fails if you realize that something you did and said was so totally wrong.
1:02:46
We could even argue this is what happened recently with COVID, the masks, the vaccines, all of the statements that were made, that you have to keep doubling down.
1:02:53
Every system has bad actors, you know, people plagiarize, fraud, whatever.
1:02:59
Is this like a systematic thing, and doesn't science protect against this because people then do double-blind studies and try to replicate studies? Two things.
1:03:08
Because like Jason Blair eventually got caught, right, at The New York Times?
1:03:11
It was only a matter of time before somebody said like, "His description of my back porch was not accurate, and I never talked to this journalist.
1:03:17
that a smart up and coming scientist.
1:03:17
Your job is to is to publish research that gets attention and that you can then go raise grants from the NIH and others from on.
1:03:26
So, you want to get some good papers out, you want to get attention, and then you want to forward the research that's already being done.
1:03:31
It is to no one's incentive to go out and try and retest something that someone's already published on.
1:03:37
Even though that's what you're supposed to do in science.
1:03:41
There's no motivation, there's no dollars to do this.
1:03:43
It's um it's a disincentive to your career.
1:03:45
It's a disincentive to your ability as a scientist to source funding and to source grants to go back and retest assumptions that are already strongly held beliefs in the industry.
1:03:54
I'll give you another strong example that just came out um 2 weeks ago.
1:03:58
You know, um you guys heard of SSRI antidepressant drugs, right?
1:04:05
37 million Americans are on these drugs.
1:04:08
Uh the market is uh is projected to be at about 25 billion in the next few years.
1:04:11
That's how much um Americans uh are spending on these uh on these antidepressant drugs.
1:04:15
Half a sack, but yes, go on. Yeah, right.
1:04:17
Um so, there was a paper published in Nature a few weeks ago, and the Nature journal pulled all the research and all the data from 17 other studies that was across several hundred thousand patients.
1:04:30
And their conclusion was um uh that there is uh effectively uh no proof that these SSRI drugs have an effect on depression, have a positive effect on depression.
1:04:42
That um you know, serotonin and the idea that you know, serotonin uptake should kind of have a a driving effect on on depression, and this has been the assumption that's been held now for you know, for many years.
1:04:55
I mean, you know, I think the original paper on this was published uh probably north of 20 years ago.
1:05:00
But, the industry is so big, right?
1:05:02
The drug companies are making 20 25 billion dollars a year on this drug on these drugs, and scientists are incentivized to further that research that supports that research, and so they can go out and get NIH grants because it's already an accepted, proven belief that this is driving the research. solution to this?
1:05:19
Like for every dollar that's spent on primary, you know, a dollar needs to be sent on double-blind testing it and making sure that it's accurate.
1:05:28
Should there Cuz we have this issue in journalism, right?
1:05:31
Everybody's a content creator, re-blogger, an opinion journalist, but there's very few now investigative journalists left.
1:05:37
The actual problem is the pure is pure review systems entirely, in my opinion.
1:05:43
Like the the problem with this study is that this was done by an up-and-coming researcher in 2006 at the University of Minnesota uh under a researcher who is well-known.
1:05:56
And so there was zero incentive, as Freeberg said, to really push back.
1:05:58
When well-credentialed scientists tried to find this amyloid beta star 56, they couldn't find it.
1:06:03
And, you know, lo and behold, those articles don't get published because they don't get accepted. Why?
1:06:08
Because it unravels the entire game that folks will play.
1:06:11
So, you know, if you're a well-educated PhD with post-doc in the right places, um supporting other people, it's just a loop that goes on forever.
1:06:21
The article goes on to talk about how that person who wrote that initial article eventually got this very prestigious multi-year grant from the NIH by a person who was his reviewer, who worked on the 2006 paper with him.
1:06:36
I mean, these are some pretty blatant conflicts of interest, but the reason they don't get uncovered is like who is who's going to step in and all of a sudden become the Let me strike an analogy here.
1:06:50
You know, there's a seedling of fraud here, obviously.
1:06:52
Some guy took some freaking photos and photoshopped them and doctored them or whatever.
1:06:58
But we then tell ourselves stories.
1:06:58
And those stories get us access to money, which allows us to pursue more science, which is meant to forward the market.
1:07:07
And then eventually the market gets forwarded so much and you spend a billion and a half dollars and it turns out the whole thing doesn't work.
1:07:11
Just like stock markets, it starts out as a voting machine in the beginning and it's a weighing machine over time.
1:07:17
The same is true in science.
1:07:20
You will have a voting machine in the beginning where everyone has some belief, some theory, some hypothesis and they all want to believe it and they forward it and they fund it and they fund it, but ultimately, if it's not true and it doesn't actually resolve in real world change, the market will collapse. The stock will collapse.
1:07:36
And that's what just happened with amyloid beta in Alzheimer's to a large degree.
1:07:40
There's a billion and a half dollar market cap, you can think about it, a billion and a half dollars of funding that's gone into this product idea. That's pre-year.
1:07:48
Well, no, no, there was a billion and a half of NIH funding over time. This is just NIH money.
1:07:51
No, no, what I'm saying is the NIH budget per year for Alzheimer's and dementia is 1. 9 billion.
1:07:57
Yeah, yeah, if Half of it and half of it, if you look at the tags, if you just search the tags, half the money has gone into Alzheimer's disease amyloid beta.
1:08:03
So, the point is, you could orient the terms you used and the way in which you wrote your grants to disproportionately affect the the likelihood of getting money.
1:08:14
Separately, there's a whole body of researchers that have felt for a very long time that specific forms of infection, viruses, um Lyme disease could actually be a precursor to Alzheimer's and it has been poorly researched because the funding dollars weren't there.
1:08:30
So, the There's a lot of other theory, mitochondrial dysfunction. Yeah. Yeah.
1:08:35
So, Friedberg, when we look at this, a bad actor committing fraud can send the entire deployment of capital in science on a multi-billion dollar of the human race.
1:08:46
Come on, like it's not just about like we didn't get the dollars in.
1:08:49
It's if you don't take the path, the drug doesn't get discovered.
1:08:53
That's a really big deal.
1:08:55
And now the And now the drug is in the market, Biogen gets approval and people start taking it and we're seeing the data it doesn't work and no one wants to use it.
1:09:02
So the market has collapsed and you kind of go back to the origin.
1:09:04
It's like the market collapses ultimately.
1:09:07
The weighing machine happens because the science doesn't work. It's not there.
1:09:11
And there was no incentive.
1:09:11
No one got paid along the way.
1:09:13
Imagine if there was a bounty program to go and disprove papers.
1:09:17
So you know, imagine if there was a system That's what I was talking about. What is the safeguard?
1:09:20
And we do have that in public markets. It's called shorting. No, there is. stocks. It's called PubPeer.
1:09:25
The problem is if you go to PubPeer and all of a sudden put your name out there as someone calling it out, your professional career inside a research institution is finished. Right.
1:09:34
If if your job is to go and disprove No, if your job is to disprove other people's stuff, you don't build you don't forward your career, right?
1:09:40
I mean, there's a it's a Oh, that's Those people should be heroes.
1:09:43
There was Those are like bug bounty programs.
1:09:44
They have to look at it like bug bounty programs in tech.
1:09:47
Or shorting stocks in is that this community is extremely small, highly specialized, and their impacts are enormous on all of society.
1:09:57
But you can't replace them with somebody else very easily because it takes an enormous amount of expertise.
1:10:01
Like if you read that science article, the amount of work science took six months of due diligence before they even had the courage to put this thing out there.
1:10:10
They had all kinds of different teams trying to prove what this guy had found before they were willing to put ink to this thing.
1:10:17
Yeah, when things are starting to feel like they're ultimately moving to market or getting to market, the more money starts to flow in.
1:10:24
Another good example of this is Zymergen and Ginkgo.
1:10:27
Okay, so in the past week, Zymergen was acquired for $300 million or it was announced that they're going to be acquired by Ginkgo Bioworks, both of whom are public companies.
1:10:34
Ginkgo went public at I think a $20 billion market cap as a SPAC a few months ago.
1:10:41
Zymergen went public at, you know, $4 billion or whatever they went public at.
1:10:45
Zymergen being acquired for $300 million comes off of them having raised a total of 1 and 1/2 billion dollars of capital from many investors including SoftBank and in their IPO since they were founded in 2013.
1:10:56
Both of these businesses do exactly the same thing or similar things, which is pursue the industrialization of synthetic biology.
1:11:04
Synthetic biology has been talked about, you know, or pursued for 20 years in an industrial setting.
1:11:07
The kind of gen one of synthetic bio companies was Amaris, Gevo, KiOr, Solazyme.
1:11:12
These companies were all engineering cells.
1:11:15
You change the genome or the DNA of the cells.
1:11:17
You get those cells to make a product you want them to make.
1:11:20
You put them in what's called a bioreactor and they make the product.
1:11:23
You can make bio plastics, you can make animal proteins, you can make fuel.
1:11:27
And so these and you put sugar water in the tank.
1:11:30
So you're programming the organism to make stuff for you.
1:11:33
And there's a lot of technical challenges, right?
1:11:35
How do you change the genome?
1:11:36
How do you get it to be more productive?
1:11:37
What are the environmental conditions of the bioreactor?
1:11:40
How do you scale this thing up and so on?
1:11:42
And so many of them had early stage proof points and then extrapolated out that this is going to work at scale.
1:11:47
So all the gen one companies largely failed.
1:11:49
Gevo, KiOr, Solazyme, they were all trying to compete with the price of oil and they lost.
1:11:54
And so they could never actually The science worked in the lab, but getting it to a big scale, there was a million things that went that suddenly were kind of proven or disproven along the way and they all kind of pivoted and became cosmetics companies and kind of did high-end food and other stuff.
1:12:10
And then Ginkgo and Zymergen were kind of gen two.
1:12:11
They were like, "We're going to reduce the cost, improve the time scale of these synthetic biology programs."
1:12:16
And they started using industrial robots and arms.
1:12:17
Zymergen made a bunch of kind of strategic errors where they were like, "We're going to make the product and design the organisms."
1:12:24
So it took a lot more money, a lot more time and as they kind of stepped up and tried to scale up, turns out a lot of the things that they believed to be true weren't quite true.
1:12:34
But the CEO did a great job selling the story.
1:12:36
Josh Hoffman, he went out for years and he told everyone, "You know, we're going to kind of create this this factory and we're going to make everything in the world using biology.
1:12:44
It's going to transform uh the world." You talked about this. Is it a true story?
1:12:48
Yeah, and so look, the so much of the fundamentals are true.
1:12:50
But the industrialization, the amount of capital these guys raised, and what they promised they would deliver on when, turned out not to quite be the economics, not to quite get there.
1:12:58
And the market decisions they made about what products to go after, how quickly to scale up, building their own facilities, there was just a lot of strategic errors.
1:13:07
And I think the storytelling got ahead of where the business was.
1:13:10
You know, we saw this a lot in other businesses in the past years we've talked about crypto and other markets.
1:13:17
But these were really key examples because the science is so compelling.
1:13:20
And the narrative is so compelling.
1:13:20
And if it's right, and if it works, it changes the world.
1:13:23
And I think the same was true of amyloid beta and Alzheimer's.
1:13:26
Everyone wanted it to be true.
1:13:28
SSRIs, everyone wants there to be a cure for depression that you take a pill and it you solve depression.
1:13:34
Everyone wants to, you know, have a drug that you take and it and it ends Alzheimer's.
1:13:37
Everyone wants to print all the world's products in a factory using cells.
1:13:40
But there's a lot more to it.
1:13:40
And as you kind of get through the nuanced 10 to 20 year cycle of science moves to technology moves to industry, those stages are wrought with errors and issues, and ultimately may not actually yield what we expected it to yield, and those stories start to fall apart.
1:13:55
And that's what happened with Zymogenetics.
1:13:57
They're getting bought for a lot Will we look back on this, Friedberg, in 20 years and say, "Hey, yeah, these things were total train wrecks.
1:14:01
They flipped the car, but it was a step in the right direction."
1:14:05
And yeah, that was 100% step in the right direction.
1:14:07
That capital, but you know, it something will be built on top of it.
1:14:10
Just like mainframes or mini computers to smartphones.
1:14:14
The first system of call it synthetic biology or recombinant DNA, where we took DNA from one organism and we put it in a in a microbe to make stuff for us, was Genentech in 1978.
1:14:22
Genentech Prior to 1978, the way we got insulin is we actually processed pig parts.
1:14:27
So we'd take like, you know, hundreds of kilograms of pig parts to make just a few grams of insulin.
1:14:33
And Genentech took the DNA for human insulin, and they put it in a bacterial cell, and they made human insulin in a bioreactor.
1:14:41
And that really kind of ushered in this this era of, you know, industrial synthetic biology that all of these companies kind of followed uh suit to do in different markets.
1:14:51
But remember, biologics, the entire pharma industry and biologic drugs, it's all made this way.
1:14:55
We take the um the DNA to code for certain antibodies or proteins, we put it in microbes, and those microbes make those products for us.
1:15:03
That biologics drug industry is a $350 billion annual revenue industry today. And so it works.
1:15:10
It's just a matter of when and what the right products are.
1:15:13
Industrial enzymes, $25 billion annual revenue today.
1:15:16
So there are markets that are working.
1:15:18
It is working, but this whole like we're going to change the world overnight isn't really, you know, true, and so these stories catch up to us.
1:15:24
And I think we've seen this where I call it science meets money.
1:15:27
You know, money usually wins.
1:15:30
Um and the science isn't quite there yet.
1:15:33
And so we've seen this in kind of the Genentech story is amazing.
1:15:35
I mean, Tom Perkins from Kleiner Perkins fame like willed that company into being, and they Yeah, it's pretty amazing how in the old days of venture capital, they basically built these companies like you're doing today, Friedberg, in like a production board model.
1:15:50
He he basically incubated Genentech, and then surprised the world with like, "Hey, we have synthetic insulin here."
1:15:55
Um it was like Yeah, look, I mean, the potential is enormous for Silicon Valley.
1:15:59
There isn't a single material or food or a fuel or product that we ultimately won't be able to make using synthetic biology.
1:16:08
It's just a matter of how do we get from here to there.
1:16:09
And the storytelling kind of gets you a bunch of money, and then you get ahead of your skis, and then boom, you fall down.
1:16:16
Same happened in Alzheimer's, same happened with SSRIs.
1:16:17
And I think we'll see this happen a lot, but like when science gets exciting, a lot of money gets behind it, and sometimes it can kind of, you know, get ahead of its skis and fall down.
1:16:26
But And Sachs, how excited are Sachs, how excited are you for this revolution in synthetic biology?
1:16:32
Sachs is an investor with us in one of our companies in synthetic biology.
1:16:35
He may not remember, but he's got some money in.
1:16:38
Uh I won't name the company, but he's got some money in. how's that doing?
1:16:41
Yeah, it's Did you fall asleep in the board meeting?
1:16:44
No, I'm not We're not on the board. We're We're passive.
1:16:46
We Didn't Is that the one we brought you, Freebird?
1:16:50
Yeah, well, I It was three people brought it to me, but I've known them since they were small.
1:16:53
But yeah, I I I'm No, there was a deal that came in that looked interesting, but it was a little bit out of our area, so we went to Freebird with it.
1:16:59
is It is an interesting business cuz these guys provide a tooling service to other synthetic companies, and so it's a recurring revenue stream. Yeah, I like it.
1:17:07
Yeah, it's a picks and shovels, exactly. Yeah.
1:17:09
Yeah, it was very SaaS-like in that regard.
1:17:10
A babushka doll of nerds. Yeah. Unbelievable.
1:17:13
All right, so we woke in Sacks is awake.
1:17:15
Okay, so talking about an area where, you know, I'm not going to be able to contribute a lot to the discussion of SSRIs.
1:17:20
I'm not going to pretend to know stuff like that. a consumer.
1:17:24
I'm not the I don't know. What do I I just buy it.
1:17:30
Sacks, uh have the Have these SSRIs helped you in any way with your depression about Biden? No? Okay.
1:17:34
The story that I think kind of fits with everything we're talking about this week Yeah, we're driving 75 minutes in, yeah.
1:17:43
is uh there was more There were more stories this week about this cynical ploy by the Democratic Party to fund MAGA candidates. No, hold on.
1:17:51
We talked We talked a little bit about this last week, but they spent You should be really opposed to this, J Cal.
1:17:58
I I Yeah, listen, as an independent, I uh think it's gross. Yes. Independent. I am an independent.
1:18:02
You're an independent who only votes for Democrats, so. Not true. Not true.
1:18:06
I'm going to vote for Liz Cheney for president, I think.
1:18:09
Liz Cheney or Bezos, those are my two candidates.
1:18:12
you ever voted for a Republican candidate for any office ever? I have Yeah, I have. I have. You have, really? Yeah. Yeah.
1:18:18
I People I I'm a moderate, and I don't feel like Who? When?
1:18:22
I voted for um Who did I vote for?
1:18:25
You were you going to say Reagan?
1:18:26
Were you going to say Ronald Reagan?
1:18:26
You were too young to have voted for Patrick Monahan. Patrick Monahan. He was a Democrat.
1:18:30
It's been a long life, but I did I did vote, I remember, for a Republican in in when I lived in New York.
1:18:35
David Sacks has a look on his face that says, "Finish your stupid banter so I can go on my monologue." Okay, go go Sachs. Hold on.
1:18:41
Henry Belcaster in 3, 2, go.
1:18:44
No, I don't I don't really have a monologue on it, but I just think that this is this is a pretty amazing story that you've got Democrats spending almost $50 million this primary season boosting MAGA candidates. Yes.
1:18:56
Um at the expense of moderate GOP candidates. Perfect.
1:18:59
And so Let's get the crazies in there.
1:19:01
Yeah, I mean it's to beat, right?
1:19:02
I mean that's the theory.
1:19:03
If you get a crazy but in a in a in a year in in a year in which you get a red wave, it's really dangerous.
1:19:10
And it totally undermines what the Democrats are saying in their January 6 Completely it's completely cynical. I agree.
1:19:19
Yeah, you can't you can't on the one hand say as backing Trump.
1:19:22
You can't on the one hand say that we're facing an unprecedented existential crisis for our democracy, and then on the other hand be giving money to the very same people you're saying are the threat to democracy. It makes no sense.
1:19:34
It just shows that the whole game completely cynical backing anything that is toxic.
1:19:40
you're No, no, no, no, no, no.
1:19:40
You're what you're saying You're trying to both You're trying to both sides it.
1:19:43
You're trying to you're engaging both sides.
1:19:45
No, but the difference here is that the there is this is I'd say partisan political gamesmanship, but the point is you can't on the one hand be engaging in ordinary partisan gamesmanship while you're saying that democracy faces an unprecedented threat. That's the disconnect. I I I get it.
1:20:04
You're you're you're trying to get too cute.
1:20:05
What do you think about Liz Cheney? I'm curious.
1:20:09
Would you vote for her if she was a a nominee?
1:20:12
She's a warmonger just like her father.
1:20:14
She's like she's basically Darth Vader 2. 0.
1:20:17
So, that's my biggest problem with her is no, I would not I would not vote for her.
1:20:21
There's not There's not There's not a war she doesn't want to get us involved in, and there's not a country she wouldn't try to impose democracy at the end of a barrel, okay?
1:20:28
So, that's why I don't like her, but to your point, Democrats say they want to work with more Republicans like Liz Cheney, but if you look at who they're donating money to, they're donating money to support the MAGA election denier against every single Republican who voted for impeachment, okay?
1:20:45
So, you look at like the specific races.
1:20:51
Um It's completely cynical and it's just about winning, just like the Republicans do. one one example.
1:20:55
Uh Democrats, they gave they launched $450,000 of ads to take out a Grand Rapids Congressman Peter um Meijer, who also voted for Trump's impeachment.
1:21:07
They did this with a demo- with a Republican in California, David uh Valadao, and and just on and on.
1:21:13
So, you've got on the one hand, you've got Democrats saying that this is an unprecedented threat to democracy, they want to work with more reasonable Republicans who aren't denying the election, while at the same time trying to basically fund the campaigns of the MAGA candidate.
1:21:30
Yeah, the reason they're doing it, obviously, is if you fund one of these maniacs, then they're easy to beat.
1:21:33
So, they're trying to serve up somebody who's an easy candidate to beat. I get the strategy.
1:21:40
in a but in a year where you have a wave election, I think it's a very dangerous strategy, because listen, it effective was my question.
1:21:44
Is it Do you think it'll be effective?
1:21:47
I don't think so, because this year, I think this November is likely to be a wave election.
1:21:52
And when you get a wave election, the specific candidate matters less and party matters more.
1:21:59
So, you could get some of these crazies swept into office.
1:22:01
So, I think it's a cynical and and counterproductive strategy.
1:22:04
And you say the Republicans do it, too.
1:22:06
I can't remember any example of Republicans ever doing this.
1:22:09
is like supporting Trump is the actual I can't remember a single time ever where Republicans have have basically funded Hold on.
1:22:18
They have funded the Soros candidate. loves the Trump thing.
1:22:23
I just think this is very stupid and dangerous, but listen, it's of a a Listen, it's of a piece, okay?
1:22:26
It's of a piece with the administration claiming we're not in recession, trying to redefine recession now that we're in one.
1:22:33
It's of a piece with Joe Manchin all of a sudden calling the slimmed-down BBB the deficit reduction act after saying that it would increase the the deficit.
1:22:41
And the media is not holding these guys accountable.
1:22:43
That's why they're doing it.
1:22:44
Politicians Hold on a second.
1:22:46
Politicians are going to be as dishonest as the media allows them to be.
1:22:50
And the media is not holding them accountable.
1:22:52
Conan O'Brien kept the White House honest.
1:22:55
He tweets out, "The White House now says it's only a recession if you see a salamander wearing a top hat." Absolutely.
1:23:01
The comments The comments are the best.
1:23:03
One guy is like, "What about a What about a What about a What about a rabbit wearing a pancake?"
1:23:11
Uh but let me ask you a serious question.
1:23:12
But Jake But Jake, I'll seriously going beyond just the the specifics of the political issue, I think we really have a problem with the media class.
1:23:16
I mean, the media is carrying water for these Democrats because they agree with the ideological agenda.
1:23:23
We do not have an honest media who's willing to hold the party in power accountable.
1:23:29
Given what you've said about being disgusted by like the um you know, uh denying uh you know, this voter fraud conspiracy stuff by Trump or whatever.
1:23:38
If Trump wins the nomination, which I think he will, uh how are you going to be able to when we're on the show a year from now and Trump has the nomination or you know, 18 months from now, whenever it is that it he locks it up, and he will lock it up if he runs. think so.
1:23:51
So, if he does though, I don't think would you conceivably be able to back Trump for a second term?
1:23:58
Would you be able to come on this program and say I back Trump as a Republican cuz you don't want to vote for a Democrat. What would you do? Just not vote?
1:24:05
Cuz you don't like Trump.
1:24:07
You said you would not support him.
1:24:10
Listen, politics is always a choice of the lesser of two evils.
1:24:12
There are a lot of people would vote for Trump?
1:24:14
So, I hope I'm not in that situation.
1:24:15
Listen, I I you know I mean I don't know.
1:24:18
Listen, the the election that America does not want in 2024 is Biden versus Trump.
1:24:22
I think the race that they want, I think the choice they want to make is actually DeSantis versus Newsom.
1:24:26
That's the choice I'd like to make.
1:24:30
So, look, I'm on the DeSantis train.
1:24:32
That's who I'm supporting for 24.
1:24:34
You know, if it ends up being something different, we can talk about that.
1:24:38
DeSantis, what would you do?
1:24:40
Would you vote for Bezos or DeSantis? You go DeSantis, really? What about you, Chamath?
1:24:44
Would you go Bezos or DeSantis? Who would you vote for? Bezos or DeSantis? I I Bezos or DeSantis?
1:24:50
Mm, well, that's a tough one. Probably DeSantis. Okay, Friedberg? Bezos DeSantis? I'm going I'm good.
1:24:57
I'm going to sit this question out. Let's keep going.
1:25:00
Okay, all right, everybody.
1:25:00
There you have it, everybody.
1:25:01
It's a It's a dumb question, Jcal, because Bezos is not running.
1:25:03
I mean, and and honestly, the the the fact that people are even discussing that It's a thought experiment.
1:25:09
No, but his thought No, but the thought experiment The reason why I would go DeSantis is at least he knows how to play the game of politics.
1:25:15
Bezos would just in a matter of a week be like, "Why did I do this?
1:25:18
I had the best life in the world." Exactly. There's just no way. It's a stupid idea. best life.
1:25:24
Listen, Jcal, Bezos had two tweets criticizing the administration on inflation, and you're like, "He's running for president. He's running."
1:25:31
no, no, there's two There's other reasons. Come on. Stop being such a clown.
1:25:34
He bought the Washington Post.
1:25:34
He bought the biggest house in DC.
1:25:39
Uh and he gave that $10 billion climate pledge.
1:25:41
I think those are all little cards that you could check boxes.
1:25:43
And if he writes a biography Bezos probably has houses all over the world.
1:25:49
Doesn't mean he's running for president of those countries. Come on. I'm just saying. You're just scared.
1:25:53
You're scared of the Bezos presidency.
1:25:55
You know that he would roll over DeSantis. He would roll DeSantis.
1:25:57
Even if Bezos were dumb enough to run for president, I think he's too smart to do that.
1:26:03
The Democratic Party would never nominate him. That's not Why?
1:26:05
He wouldn't pass like some purity test because of his Look what happened to Bloomberg.
1:26:08
I mean, listen, don't get me wrong.
1:26:10
I'd love to see a candidate like Bloomberg or Bezos nominated by the Democratic Party because they clearly understand economics, right?
1:26:17
Would it be a master stroke by the Democratic Party to embrace a moderate I would love to I would love to see a candidate like that.
1:26:22
But look at look at what happened to Bloomberg.
1:26:23
Bloomberg spent $100 million and he lasted to the first question of the first debate.
1:26:29
Yeah, they knocked him out.
1:26:29
The first question of the first debate.
1:26:31
And then, you know, it was Elizabeth Warren knocked him out by just basically calling him a a billionaire and he's there stunned. He had no answer. Terrible.
1:26:39
Yeah, he did terrible, terrible.
1:26:40
But I mean, it would be a master stroke if they went with a moderate. You know it. All right, everybody.
1:26:45
For David Sacks, Chamath, and Friedberg, I'm J Cal.
1:26:47
We'll see you next time on episode 90. boys. Love you. Back at you. Bye-bye. Love you, sexy poo.
1:26:56
We'll let your winners ride. Rain Man, David Sacks.
1:27:03
And I said, we open sourced it to the fans and they've just gone crazy with it. Love you, Sacks. Queen of Kinwa.
1:27:12
We'll let your winners Besties are calling.
1:27:19
That is my dog taking a dump in your driveway, Sacks. Oh, man.
1:27:27
We should all just get a room and just have a one big huge orgy cuz they're all just useless.
1:27:30
It's like this like sexual tension that we just need to release somehow. Wet your beak, beak. Wet your beak, beak.
1:27:39
Wet We need to get merch. Besties are calling. I'm going all in. I'm going all in.