All-In with Chamath, Jason, Sacks & Friedberg - E33: Apple's hypocrisy, America's math failure, crypto's regulatory correction, Clubhouse's future, UFOs & more

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Friberg Friberg, what’s up? It seems like you have a piece of shit on the side of your mouth, or is that a birthmark?

It’s oh, no, that’s birth. I got you

Did you record that

Look at this guy

He takes his shirt off for one fucking selfie and now everybody who’s fat and pale on the show

The other three of us is gonna be ridiculed. I’m having steak tonight as te aka tonight

Lifting twice a week now. Oh, come on sacks. Come get some let’s fucking go three two

Hey everybody, hey everybody welcome to another episode of the all-in podcast with me again the dictator himself

Show off Polly hop a tia

Rainman David Sachs definitely with us. Definitely a great driver. His dad lets him drive in the driveway and of course

Everybody’s favorite the queen of quinoa the science conductor himself

David free bird queen the Queen

Lot of activity online. It’s been a little bit of chaos since we all got together here. I

Guess we should talk about this Apple story with

Antonio Garcia Martinez

You may have heard that he was hired by Apple to I guess run

Their ad efforts and I have a little bit of information on kind of what he was gonna do there in terms of ads

Which is really interesting

But tell us tell us tell us tell us. Okay. Well, anyway, you know how we’re basically

Start at the beginning and assume people don’t know who Antonio Garcia Martinez Antonio Garcia Martinez was a Facebook developer

He is some really smart guy. He uses a lot of big words and wrote a book called chaos monkeys

which is a great book where he takes a


Jack Kerouac kind of you know, a lot of prose and

He wrote this book about his time at Facebook

The problem is he said some things in the book that would be five years later

problematic at the time they were actually considered problematic by some folks and

In the full quote maybe

Less problematic, but he was essentially ousted because of the following problematic quote

The quote is most women in the Bay Area are soft and weak

Cosseted and naive despite their claims of worldliness and generally full of shit. They have their self regarding

entitlement feminism and

ceaselessly vaunt their independence, but the reality is come the

Epidemic plague or foreign invasion they become precisely the sort of useless baggage you trade for a box of shotgun shells or a jerrycan of


and they shorten that quote to be that most women are soft and weak and

Full of shit. So in contact in context in this book

He was contrasting the Bay Area women he had dated with the mother of his kids

Who he describes as strong and tall and tough and amazing

but still the quotes a little gnarly and the quote out, you know when it’s out of context becomes particularly gnarly and of course

This led to a petition at Apple which then led to him being fired

Which now is going to lead to him probably getting a 10 million dollar settlement

of course, there’s a lot of hypocrisy being brought up here because Apple has allegedly been using or

Apple supply chain has slave labor in it from the Uyghurs and other ethnic minorities

and obviously

Apple gave dr. Dre

billions of dollars for beats by Dre and


Has a even more misogynistic

series of lyrics and was also accused of physically assaulting I

Believe his wife and other people he dated who dr. Dre dr. Dre. Yeah

So anyway

What do you think?

Okay, there you go next story no, I’m happy to jump into this

I think in Jason, I think you’re you’re you focus a little bit too much and I saw your your pod with Zach Colius on this

A lot of good takes but I think you’re a little too focused on what AGM as I think it’s easier

just call him by his initials what he did as opposed to what the employees at Apple did and

There’s at least four things that Apple did or five things that Apple did wrong

I mean number one, I think there was a really good reason not to hire this guy

Which is that he wrote a best-selling tell-all book about the last big tech company he worked at

So why if you’re a big tech company, why in the world would you hire him?

So that was stupid decision number one, but they did decide to hire him and once they hire him

They got a team like any other employee and give him a chance to show what he can do

And so that leads to mistake number two, which is these 2,000 employees who signed this petition

Really distorted and took out of context that passage and I know the passage is cringe. Okay, but I think it’s true

Passage is cringe. Okay

And gnarly and and it could you know, certainly appear sexist

But you have to put it in its context and the the larger con this is a work of literature. This is a best-selling

Book, it’s what 150,000 words. They’re taking 150 words out of context and the context was like you said

he’s describing the mother of his children the love of his life and as this sort of Linda Hamilton esque in Terminator type figure or

Charlize Theron in Mad Max and

This passage is not in there to describe all women. It’s just basically a literary flourish to contrast

the this woman that he loves

Being such a badass compared to every other woman and and you know when Kara Swisher interviewed AGM five years ago

She brought this passage. She explained it and she said yeah, okay, I get it

So, you know

It’s certainly the case that people can understand the context if they choose to and they simply are not

Choosing to understand the context which brings me to mistake number three, which is these 2,000 employees

Lied in their petition by claiming that their safety is threatened by Apple hiring AGM

That is simply untrue. It’s physically impossible in the era of zoom when everyone’s working from home

But this guy is not a threat to anyone’s safety

But they you but they use that claim

They make that claim because they know that if you accuse someone of threatening your safety

It will trigger the machinery of HR to remove that person from the workplace. This is the language of safety ism and it’s a

Specific tactic to basically get somebody canceled and removed from the workplace

Okay, and then that leads to the the the next mistake

Mistake number four, which is the bosses of the Apple caved into this pressure. They were total cowards

They never even gave AGM the chance to explain himself. They never asked him. What did you intend by this passage?

What were you trying to do? And by the way, they knew about this book when they say it’s even worse

They knew about the book

They had read it and they talked to many people as when a big time when a big tech company

Hires somebody for a major position like this. They call all the records

Uncovered and dealt with of course, they knew about it

And then when the mob complains they fire him summarily without subjecting the decision to proper HR processes

This is HR by mob rule. It’s totally unacceptable

No company should be run this way

And then finally that brings us number five is that in explaining?

Their decision and trying to justify their cowardice and giving it to the mob

They said that they fired him because of his behavior

AGM never had a chance to engage in any behavior. He barely started at the job

This wasn’t because of his behavior. This is because of the book that he wrote five years ago

So what they’re saying is that if you ever publish a written work at any time in your life

Years and years ago that that can somehow constitute present-day behavior and that other people in the workplace

Can have a problem with that be that this is not behavior and this is why he’s gonna have a giant

Defamation suit and settlement because they are making him unemployable in the tech industry

Yeah by claiming that he was fired for some some sexist behavior. He was not what do you think?

He’ll get paid in a settlement. I put it at 10

10 million. Well, I was just thinking he’s a half million dollar a year employee to a million and with his RSU

So let’s just put it at a million unemployed for 10 to 20 years because of this or the damages to his reputation

And present value that back. Yeah, so and yeah, so I think 10 million is the number

my curiosity in this was just

Did those 2,000 employees feel the same way about dr. Dre?

Of course, or did they do they feel the same way about some of the movies that they sell in the iTunes Store?

Or do they feel the same way about some of the games that they enable?

In the app store or some of the subscriptions that are sold

Right, do they care do they care that much about what’s happening in their Chinese supply chain?

I mean, I think it seems at least on the outside

The answer is no, but it would be interesting to get an explanation of that from the same HR people

I don’t know whether the guy should have been fired or not

but I do think that you should have a predictable standard and every company is allowed to do what they want if

The standard at Apple is that we are going to hold you accountable

For everything you’ve done in the past irrespective of whether you’ve disavowed it or not

So be it that’s their right and I think that the employees of that company have a right to do that

I think they said if you start to arbitrarily enforce it

you go down this weird place, which is like

Basically, I think what they’re saying is if it’s good for business

We’re going to ignore it if it’s not obvious that it’s good for business will act because it’s a low-cost way

of keeping the masses

You know that the medicated

And I think that’s what’s even scarier to the 2000 people

It’s not that you know, maybe they should feel proud that they got their pound of flesh

but they really should figure out how they want to stand on all these other points because to cherry pick puts

Puts the whole company in just a weird posture. That’s that’s not scalable freeberg

Uh, i’m less interested in the hypocrisy and the values debate, which is obvious

That’s kind of the first order

Point with all this stuff. It’s like do the employees have the right values?

Is there hypocrisy by management? Is there hypocrisy by the employees?

What what strikes me though is um a failure of leadership at these organizations

You know you guys think back to brian armstrong’s kind of purging of the woke mob and the political discourse

That was happening at coinbase a few months ago

He took a point of strong leadership

To a new level and I think it highlighted when the leader steps up and says this is how we’re going to operate

These are how we’re going to make decisions and puts his foot down

Uh people will leave and you evolve the culture

And I think it indicates to me that certain companies as they’ve gotten really big and really successful

like apple and even alphabet

and various other kind of large tech companies

The leader is no longer lead the employees lead the narrative on culture and the narrative on values

And um, you know, it speaks to two things one is that there perhaps aren’t founder

Leaders running those organizations anymore that there are managers

Whose job is critically important whose job is to keep the wheels on and keep the wheels from falling off

So they have more to lose

And they are constantly trying to protect the downside than they are trying to be aggressive about growing to the upside

um, and then I think it’s just uh, you know, secondly this kind of um,

You know failure, uh to kind of define

What your values are from a leadership perspective and the void gets filled by the employees the void gets filled by the mob

And so while it’s this one kind of, you know, debatable point today and this one kind of hypocritical point today

It’s really interesting to see that this isn’t happening at other companies that are founder-led and if it is

The you know, the culture gets jobs would have handled this completely different

Steve jobs would not have let his employees tell him who or he would have stopped

Let’s have a discussion about a really clear point of view about who we hire why we hire them

and how we make decisions and not let the

Democratic kind of rule or the you know, um, it’s not even democratic

It’s not like all employees took a vote

How much of this chamath has to do with the coddling of silicon valley employees for two decades vis-a-vis?

You know you get driven to school on your school bus you sit on you know, you get your lunch prepared for you

We do your dry cleaning every friday you get to come and ask challenging questions to the leaders and this concept of like

You know

Everybody has a voice at work as opposed to this is a company controlled by shareholders and or a founder and you work for it

And there is a trade of services here vis-a-vis what toby had to say at shopify

Which is this is not a family. This is a sports team. You are here to perform

We are here to perform for our customers the end

So the in fact if you if you had a chance and maybe nick we can post it in the show notes


The email that toby luteke wrote to shopify employees was unbelievable that to me is like that’s a tour de force

that should be basically like

That should be minted and sold as an nft

What’s an nft we forgot about those and it was it was it was just an incredible email adjacent to your point and the way

That that started if I I may be getting these facts wrong, but there was an emoji of a noose

inside of a slack channel

Um, and then and then folks got quite upset with it

And so I think toby’s response was to basically shut down the whole channel

And say hey guys

You know, we’re losing the script about why we’re here


You know, I think brian armstrong’s essay was a version of that

The question is why are we here if I had to guess I think it’s because we’ve pumped so much money into silicon valley companies

They didn’t know where to spend it

And so I actually think that what we’ve really done is overhired far too many people into many of these companies

And so they kind of are very smart people

Sitting around twiddling their thumbs. And so obviously they’re just going to get distracted meaning

I remember like, you know

At facebook there was barely enough people to keep the lights on for a while

Then I remember by the time I was leaving I was like wow

There’s way too many people here a lot of them and most of them are all really really smart

But it wasn’t obvious to me what many of them did

And you know people would look at me and then say oh, you know

That’s a really arrogant thing to say and that’s not true and everybody’s valuable

I don’t know. Um, you know if you look at google

I’ve always thought like that company could probably run by 2 000 people

But you know, there’s 200 000 people. So the 198 other thousand of them need to find something to do

It’s probably the same at apple

It’s probably the same at all these big tech companies and that’s the leverage that you get from technology. It’s naturally

massively deflationary

So but if you keep pumping billions and billions and billions of dollars into these companies

Where the app experience is written by 50 or 100 critical people or managed by 500 or a thousand critical people


This is the natural byproduct

I think which by the way freeberg said organizations want to grow right like

How many organizations say, you know, we should be smaller. We don’t need this many people, you know, you’re saying something really important

Not enough founders and boards understand the difference between growing a business and growing an org

Those are two totally different things and the reason is because we’ve lost sight of very simple financial metrics in silicon valley

Meaning if you go to any other industry where there is a cost of capital

People understand what return on invested capital means they know how to measure it

Yeah, they know what operating leverage means. They know what margin expansion means. We only have valuation and they seek that out here

We think about exactly as you said valuation and so this idea that

Having a hundred people do the work and see margins lift is antithetical to the silicon valley culture

It’s oh as margins go up. Let’s just keep running the same profitable business, but instead have a 500 people a thousand

What do you think you’re an operations machine people would say on a coo basis

You’re one of the top three to five in the history of the valley. What do you say coo man?

Um, yeah, I mean look chamath is right that in a company that’s well-run and well-led where uh people

People don’t have time on their hands to engage in these shenanigans


So yeah, I mean, I think I think that’s absolutely right

I think companies and startups are increasingly have to choose whether they want to be apple or whether they want to be

um coinbase or shop5 for that matter and just this this week at apple

There’s a new petition circling now. There’s a petition called by thousands of employees calling for tim cook

To denounce the israelis and endorse the palestinian side of the conflict. Yeah, how’s that gonna work?

Well, of course you have a position on abortion. Is there an abortion position at well

But but now that they’ve given into the the woke mob, there’s no reason for the mob to stop

They’re going to be circulating a petition every week and that’s kind of the point is

So and actually agm himself had a really good quote about this. He did a great interview with

matt taibbi

And um, he laid out the choice that companies face like this. He said it’s interject. This is um,

Antonio martinez saying is interjecting the whole fucking twitter cesspool

With all the dog piles and all the performative signaling and all that crap into a corporate setting

And replicating those dynamics and calling it work. That’s basically what happened is what’s happening is you you’re these employees are performing twitter

at work

And they’re on on slack and they’re pretending like it’s really work and it’s not

And I think you know founders are going to have to make a decision

Do you stand up and take a uh, brian armstrong like position or a toby position or do you eventually degenerate?

Into some sort of or a base camp, by the way

Even base camp the most woke virtual signaling founders on twitter

decided to take that’s right the most libertarian or

Spartan approach, you know stoic approach of toby to give you uh, toby’s

Well base camp just to finish the base camp thought so to base camp try to accommodate

This sort of like woke mentality and what they found is that they got pushed so far

It became so distracting. They eventually had to move to the armstrong position and that’s kind of my point is once you yeah

Everybody’s going to move to that. Yeah, that’s my point

I mean and if you don’t believe what I what I said was like listen if you believe that a organization

That allows political speech and this kind of stuff as a primary function inside the company

Will then go build a competitor to base camp and show that that system works better. Here’s toby’s quote

To help you make this more clear to team members. Here are some pointers about what shopify is not

Shopify like any for-profit company is not a family. The very idea is preposterous

You are born into a family you never choose it and they can’t unfamily you

It should be massively obvious that shopify is not a family

But I see people even leaders casually use the term like shopifam

Which will cause the members of our teams especially junior ones that have never worked anywhere else

To get the wrong impression the dangers of family thinking in quotes are that it becomes incredibly hard to let poor performers

Go shopify is a team italicized not a family

We literally only want the best people in the world

The reason why you join shopify is because I hope all other people you met during the interview process

Were really smart caring and committed. This is magic and it creates a virtuous

Magnetism on talented people because very few people in the world have this in themselves people who don’t should not be part of this team

I mean when I was um, when I was that strong

when I was at facebook, we used to convene the senior team and

You know, I was like I want I really want to fire the bottom five or ten percent of the company of you

And we would force stack rank and we did it for about three or four years and then the excuse was it’s too big

And there are too many people and the roles are too diverse and you can’t rank

I actually don’t believe that even to this day. I think it’s pretty obvious who the real

Thousand x kind of employee contributors are and by the way, they exist in every function. There’s thousand x salespeople

There’s thousand x, you know product managers. There’s there’s the thousand x people that work in facilities

They exist in every job function

And companies I don’t think do a good enough job of figuring out who they are

And so instead what happens is people that are not even 100x or not even a 10x are really more like a 1 or 1.1 x

Can basically hide in all of that noise

And I think that if you could separate hr into two things

But there’s really three things one is like benefits, which is critical

The second is actually like safety and the ability to whistleblow if there’s something really nefarious or bad that’s happened

And then the third that’s really valuable I think is organizational design, right?

How do you put people in good jobs?

And how do you allow them to have a huge amount of autonomy to run and build a career?

but all of this other policing stuff to me just seems like


It coddles to the lowest 25. I don’t know if and this is my intuition to the lowest 25

Performers of every course, of course it does and just to uh, close this story up and wrap to our next

Uh, and tony agm announced that he is going to take a year wait for it to write for sub stack

So he is going to get paid

10 million dollars. I I would guesstimate in a settlement by apple. He’s going to get a half million dollar. I’ll take the over

I’ll take the over

Only we can bet on this

I set such a good line. We can bet on it. We can bet on it. I’ll take the over

Okay, I set the line at 10. Anybody want the under?

I’ll take you’ll take the uh

Well, go go give it a give a different bet and i’ll think you got a different line

You could set a different line set a different line. I think 10 is a good line

Because you gotta think like if they offer him seven or eight million

I mean, it’s gonna be something like that. I don’t know what the big what the number is, but we’ll never know i’ll i’ll make a line

15.6. I’ll take the under i’ll take the under wow

We’ll take the under. Yeah, 15 is way too much way too much david’s quiet. I’d say under 15. Yeah, that’s not a good line

Good thing

Is a good line

Okay, let me do 11.5. What do you take tamar can afford the book against all three of us?


Tramont takes the over 11.5

Freeberg sacks. Yeah, I don’t know under

Let’s just tell you why if you look at the last four-year compounding of apple stock

Right, and so if you think about reasonable number of grants as his level of seniority plus the imputed compounding

Plus whatever he would have gone. You should be part of his team

somebody said in this clip because

That’s the argument is I I do think you end up getting to probably 20 million

And then you got to include you get a buyout. Yeah, you get a buyout now price at 15 in color

And they’ve also also you could make the argument. They’ve rendered him unemployable in the industry. So and then there’s four gone

Incomparable in the future then it could be 20 mental suffering. What about suffering? He is going to suffer

He’s going to need to be on meds. My client is suffering. He’s in therapy twice a week. He can’t get out of bed

He’s not going to be able to be in functional relationships

And he’s too scared to leave the house. He should wait on the substack because he’s going to make so much money on substack

It’s going to mitigate his damages

Yeah, don’t take the

Do you guys know what apple’s market cap divided by employees is

Apple is apple’s market probably seven million an employee

Anyone else?

Wait a second. There’s a hundred thousand employees and it’s worth two trillion

Okay, there’s 150 000 employees 2.1 trillion. So it’s 14 million an employee

So the other way to think about it is if apple’s like going to lose one or two good employees over this

Um, you know, they’d uh, they’d happily pay up to get uh to get the guy to be quiet

So it’s worth one employee to pay 14 million dollars

Well, no, I mean, well, you’re you’re not dividing by all the slave labor in china


I’ll recalc i’ll recalc

They actually cause zero

That was bad, sorry

I mean, this is the hypocrisy of apple

They’ve literally got slave labor in their supply chain. Not that they wanted in their supply chain

How do you know that? How do you know that?

Let’s just go through this because like this is a common narrative

But has anyone actually like gotten to the bottom of well, that’s why I said reported. I mean, yeah

Yeah, it is it is known again. Like I don’t like

I don’t like pushing narratives

Actually, I tweeted something that i’m well, I retweeted something that came from I think a pretty valid source

Um that author from the atlantic who I think is pretty legit

Also, I just think just in terms of his quote if he had taken the word woman out of the quote

Uh, most people in the bay area are soft and weak

In a zombie apocalypse. I don’t think you’re recruiting from the bay area. Uh, but related to this story, uh in terms of chamat’s point about

you know, uh

1000x performers

America is uh, really doing a bad job at math and gary tan

The venture capitalist retweeted and participated in a tweet thread about immigrants

Um who know that standardized test is probably your best shot at getting somewhere

Uh, your money social science can’t take you the rules are well standardized and he tells this story about this

But there was a persuasion article

Um about us failing math and that they’re going to be in california

Getting rid of the gifted programs for math because it’s unfair

to the kids who are not gifted as a kid who is

was not gifted

uh, and to the

Three kids on the program who weren’t gifted programs or at least two of you were

I have no problem with there being a gifted program, but any thoughts on this?

I think it’s shameful. Yeah, it really is. I mean like we are we are really doing our level best to just completely

Fuck our population. Why I mean, why is this even how could this even be possible? It’s like

Like just like it’s it’s kind of like the equivalent

It’s the moral equivalent of actually saying you know what we’re going to eliminate welfare for the bottom

five percent

Like our job as a society is to kind of like find

The broadest set of solutions for the most number of people and solve for both extremes

So when you’re dealing with education you both need to understand that there are folks that need

Some kind of structural support look when I came to canada

I had esl right english as a second language you take that so that you can learn the native language of a country

It didn’t mean that I was stupid. It just meant that I was behind, you know

If I had dyslexia or something else, I would need some kind of support

One of my children had a speech impediment. We had a speech therapist

This is what you do

But on the other side if you have a kid who’s an incredibly high performer who has the potential to just completely crush

Hey, like you should be able to give that kid a pathway to achieve and give back

So the idea that you would eliminate anything at the extremes is kind of completely uncompassionate and stupid just totally fucking stupid

Well, it’s in the name of having a more equitable math class again. I hate that word. Please don’t use that

Please don’t use that word that is that is the least by the way this this I mean this goes back to the point

I made a few episodes ago that you know, you can have progress or you can have equality

But it’s very difficult to have both and you know

If you want to try and make everyone equal and give no one

The opportunity to have more or get more than anyone else because of whatever the circumstance may be whether it’s earned. No

No, but this is my point like you know

You limit the ability for everyone to to progress as a group because we’re now limiting the ability for folks to take calculus

I know equality look i’ll use a video game example equality means we all get to play grand theft auto not that we have

Somebody who actually plays for us and gets to the same answer and just gives you a ticket that says

The same score yeah, so so the so the that’s that is what equality means is that we all get to play

And we all get a chance versus equity which is leveling everyone

Equity is leveling everybody and saying here’s your result, right?

By the way, it’s the same as this other person’s whatever the misnomer is

But the notion of leveling everyone where no one can be ahead of anyone else by too far

Uh, obviously limits as a group our ability for the top decile to to increment or the top quartile to increment

I gotta think look. Let’s let’s again use. Yeah, let’s again use our friends because instead of ours, but you know

We know a lot of really smart people

Um who have really really smart kids

We also know people in general that are in tough circumstances who also probably have really smart kids

Just purely selfishly for me. I want those kids

Doing the best they can to figure out what the hell they can invent for us in the future

Why would you slow those kids down?

You know, it’s kind of like saying you know, what like how about a black athlete would you would it be preposterous to say?

You know what? You don’t have a right to go to the nba and make money for your family

I’m going to slow you down

Because there’s another white kid that’s going to go through four years of college

So, you know what you’re going to have to go through four years of college and you’re going to have to pay for it

Well, actually what I would propose, uh is when I go up to dunk that we just the rim automatically lowers two feet

Yeah, yeah, so I can dunk and then when you go for a layup, we’ll just raise it six inches

It’d be more equitable for me. That’s more equitable. Yes more equity. Let me let me let me add another layer to this

So I I agree with you with you guys that what we should be thinking about is opportunity

We should always be asking what increases opportunity for the most people and that’s how we should measure

Political programs and we’re not doing that here

We are sort of leveling down but I would say it’s even more nefarious than that

Which is I think what’s happening is that the education establishment is completely failing

Our kids and our schools and what they’re trying to do is destroy the evidence of that failure

Wow, and and so they’re hiding they’re hiding the results now this persuasion piece

Yes, this persuasion piece lays out the statistics which are pretty grim

Okay, so according to these like global measurements by OECD

Okay math proficiency in the u.s. We rank 37 in the world

Okay, and there’s only 37 developed nations in the world according to the developed. So we’re last among developed countries

China, which is our main global competitor is number one

Okay, and we achieve these horrible results despite ranking fifth in the world in per pupil spending

So it’s not a spending problem. Okay

and as we know

To the extent we do have high performing math students in the u.s. A huge majority of them are actually foreign born

And so we’re actually kind of cheating our numbers a little bit. It’s even worse than it appears now

What is the education establishment doing about this? How are they hiding the failure? Well

When school comes back in the fall, they’re planning to eliminate accelerated math

Okay, that means that there’s no more algebra for eighth graders who are ready to take it on

There’s no more calculus for high schoolers who want to you know

Do like the ap classes and get a jump on stem, you know for college

The entire idea of gifted students is now under attack like we talked about in the name of equity

It’s become a catch-all for every bad idea

And the university california system has now abandoned the sat and act

So they temporarily got rid of those requirements during the pandemic, but now

You’ve used it as an excuse let’s never waste a crisis and now they say they’re not bringing back the requirements until at least

2025 and you can bet it’s never going to return at all. And so here’s the thing

They’re trying to get rid of measuring how bad we are at math. So we won’t have to think about it

they just want to give everyone a gold star and a pat on the back and

Say how you know, this reminds me of sax is when you threw away the um

The digital scale I got you

Ha ha ha right. Yeah, i’m not i’m not fat because i’m not measuring it. Great

Oh my god, it’s like we really it’s it’s the movie idiocracy

It literally we are doing the movie. Have you guys seen it?

Why don’t we just uh, why don’t we just eliminate all admissions programs at every university and just have one global admissions board?

Where every campus is the same what is the difference between mit?

Um and stanford and caltech and the university of arkansas in my opinion there shouldn’t be it’s more equitable

To just have somebody go close to home because you can save money, you know carbon emissions are lower, right?

You can just take the bus to the local school competition. You can have one centralized place teach you why have anybody basic course?

I mean

If I said this you you’d think that I was a crazy person

except that’s basically what we’re now telling all of our high school i’m also getting rid of michelin stars and i’d like yelp to take

off their

Review system because it’s not equitable like we should not have michelin stars anymore

Every show every restaurant’s the same every restaurant you get three quarters of a star

We should not the health department should not give ranks of letters and they should not be forced to post it because that’s inequitable. Absolutely

You know, yeah, also you can game you can game the health test you could literally just follow the rules

let me just ask the um the counterpoint question, which is uh,

Uh standardized testing for example

Benefits people that can afford tutors and special

You know classes to get ahead

And there are more tutors

Yeah, therefore

Well, therefore it’s higher income people that can always well

The point is they can always layer on additional tutoring. They can always layer on additional classes

And they’re therefore there’s a finite number of math. It’s a finite score friedberg. You can only get 800 on the math

I’ll i’ll be somewhat. Um

Flip-floppy here. I don’t believe in standardized tests that much. I never did well particularly in standardized tests

I do think that they can be gamed but that’s different from what we’re talking about

What we’re saying is if kids show aptitude

We are explicitly choosing to not give them a chance to develop at their potential

And the problem is we do this in other areas. We do it in athletics

We do it in music. We do it in the arts, but we’re not going to do it in stem

That’s what we’re choosing to do. That is what’s crazy

So choose to get rid of the sat or act whatever you want. I don’t care

But if you are the lebron james of physics, jesus christ, like let that kid become the lebron james of physics

I’ll tell you like I I am I got into uc berkeley because I had great standardized test scores because I had

An aptitude. What was your sat freeberg? Let’s do this. Um, I got a

Uh, let’s do this an 800 math and I think it was a 720 verbal

Okay, so you got a 15 20 out of 1600 at the time. I got

And I got an 800 on the math

I was obviously sax. Go ahead. I was uh, 750 math. Um 720 verbal


70 are you writing this down? This is free. This is pre the inflation. There was a big uh,

I was a I was 15 10 on the sat. Oh, we were

Okay, so I woke up 400 points 500 points behind each of you in in canada

I was just kind of like we didn’t even write it but I went and I wrote it just for shits and giggles and I didn’t

Do well, I didn’t do well like you just said you weren’t good at standardized tests. So what are you talking about?

You’re in the top three percent. Yeah

Yeah, I know but generally like I wasn’t a good test taker. I was in probation in college academic

Yeah, i’m not a good testing. But look the the reason why these tests got invented was actually to prevent discrimination

Um, I think it was back in like the 50s, right?

You know, I think it was like and at that time it was jews being kept out of the ivy league and

One of the ways that they corrected for that was they made everyone take the same test

And so you could see the scores and it would shine some light

on, you know making sure that people didn’t just get in because they were legacies that they got in because

Um, you know, they had good good scores

And there’s been decades of work since then to try and eliminate bias in the test

And so the the claims of bias now in the test really aren’t supported now, right to freeberg’s point

Obviously that if you take some rich kid who lives in the suburbs who gets a 1400 and you compare that

To a kid in the inner city who doesn’t have who grew up poor doesn’t have the advantages and that kid gets a 1300

Well, which score is better probably the 1300

And so you can take that into account in my view in the admissions process, but eliminating the scores all together

Why would you want to have less information to make a decision?

There’s no reason not to get rid of these I would just think more holistically about how you accept students and I mean

Is it more competition?

And having better teachers what we should be focusing on here as opposed to even standardized testing or god forbid canceling programs

Let’s just invest in more competition for schools

well, so in canada, we had this thing where when I was graduating we had

specific different kinds of math contests and computer science contests and other

Things that you could write the putnam

Etc. And uh

Those things were actually really instructive because they were purely verticalized things that could test your aptitude

And the school that I went to university of waterloo would look at a lot of those things and adjust for it because my grades

Were decent

But my some of those one this one specific math test I took was pretty good

I remember and then they would adjust it exactly as david said to what is this kid’s background and his circumstances and they called it

a french factor they would just adjust my marks and

That’s how I got into waterloo and I didn’t think I was going to so

Um, there’s all kinds of ways where you can be smart about it

But again, we’re talking about guys don’t lose sight of what you’re saying

We are actually going to cut all these kids off at the knees starting in grade eight

So forget about all of this stuff by the time that these kids graduate. They’re going to be I honestly they’re going to be like

Really dumb the problem. The problem ultimately isn’t just measurement. It’s the denial of opportunity to learn

It’s about it’s about getting rid of the learning and the classes

That’s the biggest problem. You have to move to a state with a gifted program

Now if your kid is really smart or opt out of public education, um, which doesn’t help anybody

I mean literally schools don’t have to teach we we put it we’ve now designed a system to summarize

Schools don’t have to compete for students

Teachers don’t have to compete for jobs or for their employment. And now we’re saying students don’t have to compete

So if you remove competition

From the human condition, uh, you’re just not going to have any performance

There’s going to be no progress and as a species. We need progress. We need to solve global warming

we need to solve a lot of issues and don’t we want to live longer and better lives like where is the

optimistic nature of the human species competition is at the core of excellence

And to just take it out of everything the whole stack jake out

That’s the smartest thing you’ve ever said way smarter than 1120 sat score. Thank you

Thank you. Are you sure it’s only 1120?

How lame is it that we’re still talking about our sat score?

It’s like 30 years was the average so in brooklyn when you’re 320 points above average david. It’s a bfd

What’s lame is the four of us all remember down to the number what our score is. That’s what’s lame

I think I was 11 20 11 50. I gotta I gotta look it up. Um

all right, uh

Do we want to go to the crypto meltdown or talk about inflation or do we should we dovetail those together?

Or do you just want to go straight to ufos?

well, brian biden just uh, they they just uh, a press release just hit the wire and they just cut the

Infrastructure bill from 2.3 trillion to 1.7 trillion. Oh, so we’re doing our job

Here at the all-in podcast and uh, I I I had heard from somebody that there just is not the broad-based support

um for

Uh, the capital gains tax, so that’s not going to happen


And it looks like the corporate tax will probably go to 25

Not even up to 28

and interestingly

I didn’t realize this but one of the biggest features of the bill that has the most popularity is that they’re closing this loophole around

IP that sits outside the united states


That more than the corporate taxes will raise almost a trillion dollars of revenue. I agree with that one

Why should you put your why is apple? I mean you want to talk about hypocrisy putting their ip in ireland

So they don’t pay taxes. Google does the same. It was everybody’s doing that. Why does that exist? It’s so un-american

well, it’s a subsidiary that has different taxation on it and you know to kind of

that capital and that uh

And that earnings sits outside the us that ip was made in california. It was not made in dublin

No offense to

You know my home country. I remember facebook. We did that. We did this exact thing

We signed over all the ip and then the irs sued facebook and I remember like I was called either to

I was subpoenaed and we went through like a whole multi-year trial

It may still be going on and it was around this issue, which was the irs said hey facebook

How come you you know, you ported this over there?

And I think facebook’s answer was yeah, we paid the tax and I think they did

They don’t think they did anything wrong because the laws allowed it

But it effectively helped shield then tens of billions of dollars of future taxes

I I mean, I remember reading about this and i’m like, how does this?

Pass the sniff test. Well, it’s where the revenue is recognized jk

So you basically can produce the ip here and then transfer it to your subsidiary

When you transfer it to your subsidiary, you can recognize the earnings in that subsidiary and that subsidiary pays taxes in its local jurisdiction

um, the I think the issue facebook had was that they

Transferred the ip and they undervalued what the future value would be from that ip transfer

And that’s why the irs sued them

Is this accounting snafu in terms of like what did you value it out at the moment you transferred it?

Here’s another idea. Why doesn’t why don’t they look at as part of this ip licensing?

Where does the consumption of that ip occur?

And where do the employees who maintain that ip live jk? It’s a very smart idea

The problem is that’s the slippery slope that then gets to local taxation

You know, the thing is we have all these global tax treaties where these large corporate entities can basically play this game

And they’re not subject to local tax

But that’s the thing that’s going to really start the undoing of the big monopolies because if you start to abandon

These global tax treaties and you’re starting to see it

France is trying to do some stuff. The uk is trying to do some stuff states

Individually in the united states are trying to sue these companies or tax them more

That’s the that’s the first way to chip away at these monopolies is to basically say fuck your global tax treaty

You need to pay x amount of dollars to be here and it already exists because of these, you know

Realist, uh, sorry the retail tax nexuses and how e-commerce companies have to pay local tax in the areas

But once it sort of touches a whole bunch of other


and countries

Uh, I think that you’re going to have that that’s why I think yellen

Janet yelling yesterday said that you know

She’s in support of trying to have a global minimum tax of 12

Basically trying to get to the end state and tell every country

Let’s all circle the wagons and agree that we’ll all just charge everybody 12% and then we won’t go all our separate ways

The the problem is that if you have a lot of usage in a country, you know

That country doesn’t care what the taxation is in zimbabwe, right or canada

They’re like if i’m the uk or france

I’m, like I look at the top 20 apps in my country and i’m like wait a minute

These guys would be paying me 50 billion dollars a year in tax

It’s hard to get away from the incentive to to not want to tax these companies right now sax

Any thoughts? Yeah, I don’t have a huge thought on the ip issue

Um, it it seems like I know they’re the republican proposal on the infrastructure was six to eight hundred billion

Um biden’s proposal initially was 2.3. Chamath is right now. They’re down to 1.7

I think the the markets have been choking

on the size of all of this tax and spend

And the there’s been all these reports of inflation spiking

And so the gross stocks have just been hammered

Because we’re all expecting big interest rate increases to control this future inflation. So

um biden’s been horrible for gross stocks so far and it really I guess that what it shows is that you know,

What are gross stocks gross stocks are future investment and it shows the way that the government can crowd out when you have

Excess government spending I guess you can call it an investment if you want

But when you have excess government spending it starts to crowd out

private investment

Because it raises interest rates and that you know decreases the the value of gross stocks and there’s less money that flows into that

Yeah, it does seem like the market reaction to the infrastructure bill

and to inflation has

Made biden reconsider his approach and maybe he just came out too hot

I don’t think biden’s reconsidering. I think it’s people like joe manchin. Um, remember it’s a mark warner mark warner

Kristen sinema the the moderate there’s a three or four moderate democrats in the senate

Who I think are receiving the message chamath put it really well the last pod

Receiving the message chamath put it really well the last pod that the markets are sending a message to washington

I think some of those centrist democrats read the message. I don’t think biden’s

Aware of and I don’t know what he’s aware of he doesn’t seem too aware of anything to me

But I think the moderate democrats are getting a message

And they’re telling they’re telling the white house the package is too big and they they’re um, and I think that’s why it’s coming

The other thing that I think people um may be getting their heads around here’s what’s changed since last week

There’s a growing body if I had to say like, you know, the beautiful thing about the

The markets is that it is an extremely elegant voting mechanism in the short term, right?

I mean buffet says it’s it’s a voting machine in the short term and a weighing machine in the long term

But if you look at sentiment and how things are voted on in the public markets in real time

It’s incredibly illustrative. So, um

There’s a body of people now that are voting a very different scenario than inflation

What they’re voting for now is this idea that by the fall

A lot of this short-term pent-up demand will have worked its way through the system

And instead we’ll be back to this realization that we’ve had for the last 20 years, which is hey, wait a minute

People don’t actually want to buy more of these physical goods. They’re going to go back to consuming the way they did before

It’s going to reflexively push towards technology companies again, and we’re going to have this rebirth of growth


You would say well, how would you know that that vote is likely and this one incredible thing happened this last week

Which I just want to throw out here

one thing that I look at is this thing called 10-year break-evens, which is basically a thing that the

federal reserve of st. Louis publishes

And what it basically shows is like what people think collectively trillions of dollars

What the 10-year break-even interest rate is going to be and it peaked last week at two


And it’s fallen 13 basis points

Just in the last week down to 241

And I don’t know whether it’s sustained or whatever

But there is a growing idea that the worst may be behind us and if you layer on top of this now

biden pulling back

right on

Stimulus because he can’t get it done

pulling back on cap gains pulling back on corporate taxation

Um and a more measured policy of investment

We we could all be back. So we’re basically taking the medicine and getting back to where we were

But we still have massive asset inflation. We’re seeing in houses cars and other things

Well, we may have just pulled forward demand meaning, you know, people are like, okay

I’m flush with money the savings rate in the united states has been you know

Going at an incredible clip people may pull forward all that spending and say I was going to buy a car

18 months from now or I was going to buy a house two years from now

Fuck it. I’m going to do it now because prices are going up too fast

I don’t want to miss out

but then they’re out of the market now for the next many number of years and this is what i’m saying where you see this

Short-term spike of demand and then things get back to normal if that’s what we see

Good times are back in growth stocks

All in podcast sentiment levels go high again

I’ve literally I did like two or three early stage deals recently and I had members of my syndicate say like

How does this valuation make sense and I said to them, you know, it actually doesn’t make sense

If you’re looking at it with the traditional metrics, but all valuations are higher at all stages

So i’m going to selectively, you know overpay

Compared to what we were paying a year or two ago

you know if I really love a company but I will sit out a lot of i’m sitting out a lot of rounds right now that

I just can’t get my head around the valuation. So

Hopefully some well, there’s always a trickle down

there’s always a trickle down from growth stocks in the public markets to venture right because

The the last private investors like the big funds who do the super late stage stuff

They’re just doing an arbitrage on what they pay versus what the company’s going to list for publicly

So when they see those valuations go down they adjust and then it works its way all the way down the stack

So, you know growth stocks have just been hammered and especially all the recent listings the ipos and

SPACs and everything and and that’s going to trickle its way down I think

To venture it’s just a matter of time. We have the yeah

And I think we have the lead indicator on that as clubhouse right which will be the canary in the coal mine

I don’t know how you guys reconcile explain explain what’s going on with clubhouse just for those explain what it is

Okay, so clubhouse is a casual audio space you go into a room

And you’re immediately taken to a live conversation

With people speaking on stage and an audience audience members can be promoted to the stage and start talking

Wait, hold on. It’s in an app and it’s all audio. So there’s an app audio. There’s an app you go in and it’s all audio

Yes, so it’s like amateur night at a strip club, but for words, uh, or more comedy club, whatever you just bring public on stage

Yeah, it’s kind of like champagne room, but a little different

so anyway

And there we go

Apple 2000 signatures from apple to remove all in from the podcast

We just lost three ranks in the apple podcasting app

so what’s very interesting about this app is that it had a massive number of downloads during the

pandemic because people were home and people were not doing anything at night because they were sheltering in place and

They had in you know

2 million downloads in january 9.5 million in february of this year and then

Came crashing down 2.7 million in march and 922 in april

But at the same time their valuation over 18 months

Went from 100 million in their seed when they had like three or four thousand users

To a billion to four billion in the last round of financing for a company with zero revenue

And let’s call it a couple of million people using the app

And what’s really interesting is the same venture firm led all three rounds a la

Sequoia’s investment in whatsapp where they did all the private funding

So you have no outside capital marking this valuation a four billion dollar valuation four billion dollars

Well, they got a they got an acquisition offer from twitter for four billion and they they turned was that ever confirmed?

I’ve heard it was real


So but so basically the reason why the four billion private round happened was so that we keep going as an independent company

They could basically take some chips off the table through secondary and kind of go for the bigger outcome

But yeah, they could have just sold to twitter for four billion

So they may end up regretting that

But like is this really a function of a broader?


Inflation valuation inflation or is this just a function of there was a company that was a social network with hyper growth

And then it turns out that the product had no stickiness and the hyper growth went away

The souffle collapsed the souffle collapse

Can I can I just point out like and and forgive me if any?

Any of you guys are investors in this company or anyone that’s listening cares

But like if this thing came out before youtube

People would say you know, this is interesting, but it needs an asynchronous killer

It needs a thing where you can like record a conversation post it online and people can come and watch it and listen to it

When they want it was always so crazy to me that you had to be logged into the app to listen to what was going

on and if you didn’t you missed the conversation and there was no way to like

Go watch the recording of the conversation like am I crazy to think that this was just like I think you

I think you I think you nailed it that they don’t have async in there and actually i’ve got a little bit of disclosure

to make here

What what the beat got wet

Breaking news story. Okay, so I think I understand what clubhouse did wrong async is a huge part of it

But rather than tell you exactly i’m going to show you because i’ve been incubating a new app what yes

that we’re

We’re we’re on test flight right now

And you guys after this pod I can I can demo it for you

And if you guys if you guys want to invest i’m going to close around uh this week for it’s getting wet

And so if you guys want to what’s our valuation? What’s the value? What’s our insider all in? What’s the bestie vow?

Yeah, what’s the best?

I’ll talk to you guys about it offline. How much how much money do you want to raise?

We already we’re raising 10 million bucks and we already have commitments and but i’m creating room for you guys. Yeah

500k each

I’ll take sounds like 500k each

Where is it? Let’s talk about it offline. But um, but the apps on test flight

I think we’ll be ready to launch in a few weeks. Can I can I say wait, what’s it called?

Can you tell me? Yeah, no, i’ll say it. It’s called call in

Call in call in. I thought it was I thought it was going to be called club mouse

Does this have a uh, it’s called

Like are we going to do the podcast on it?

We absolutely could do the podcast on it and it would be awesome. Nick would be out of a job

So I don’t think he would like that too much

Quality level, but I think it’s good for call-ins if we wanted to do a call-in show it would be good for that

Yes, it’d be great. It’d be great to do exactly

And that’s why it’s called call-in is because the ability for you to take callers is obviously

A huge feature but also like we could host after parties for our fans

To like, you know chop up the latest episode and talk about it. Yeah, these fans are getting crazy

Do you guys see the all in stats twitter handle? I don’t know the twitter handle off the top of my head

but somebody’s these kids are doing um

uh, they’re using

machine learning or something to

Know what percentage of time we each speak on the pod and how many monologues and they’re doing all these statistics. It’s crazy

That’s really cool. Um, I was gonna say, uh

In defense of clubhouse for a second

I don’t I don’t know the app per se but I think like why andreason did all of that in my opinion

Is because they’re pressing a hot hand which makes a ton of sense from their perspective

It’s like, you know, I think that they’re going for the kill shot because I think they’re basically set up

they’re basically set up to become sequoia if if they really I mean, I think if you think about like which two firms are really

Crushing on all cylinders right now, obviously sequoia has always been the perennial number one

But if you think about the the heater that andreason is on it’s incredible and so from their perspective

The four billion dollar valuation is less important than what is their real capital at risk?

and that’s probably 100 or 150 million which

In the grand scheme of having 40 or 50 billion dollars of aum if you consider the value of all their public positions as well

That’s a really reasonable risk to take so I think if you read it that way

it’s kind of like

They’re taking a shot to try to just you know, go if it does become worth 10 billion or 50 billion

Also, if it only gets sold for 500 million they get their money out first. So what does it matter?

What does it matter they’re going for the 100 billion dollar outcome?

I mean they’ve seen that instagram sold too soon

They saw that snap turned down a three billion dollar offer from facebook and now it’s worth 80 billion

So they’re going for the 100 billion dollar youtube 1.6 billion. Yeah, and now it’s worth hundreds of billions

So they’re hoping it’s going to be like that

Um, but chamath chamath is right

Look, if they had taken what say 20 percent of a four billion dollar outcome 800 million

That doesn’t even pay back their fund, right?

But if it ends up being a hundred billion dollar outcome, they make 20 billion

Now it’s like a coinbase for them. What do you think they gave to the founders?

Well, who knows keep them in the game because four billion if they owned 80 percent

Yeah, they took out they took chips off the table

But here’s the thing all those decisions were made before the recent collapse and engagement at clubhouse

I’m, not sure anybody would be paying four billion for it now

Given everything that’s gone wrong, but you know, who knows it’s still pretty early

just for people who are curious, there is a twitter handle all in underscore stats and

Yeah, it’s all in I don’t know. We’re not affiliated with these maniacs, but um

We we love the stands and we’re going to do something in person in september

Congratulations to the stands for losing their minds. I think it’s a pretty good

Uh way for them to capture a bunch of attention on the twitter. All right

crypto is getting absolutely hammered, uh, and I it’s

the chinese have once again said

That they’re basically saber rattling about cryptocurrency. They’re obviously going to do their own. Um,


I think you have to talk about china in a

in a slightly broader lens than just what’s happening in crypto because like this is the same week where

They basically they’ve they forced, you know, zhang yiming to resign from

Byte dance. I mean, you know last last week it was or last month

It was the ceo pin duo duo and jack ma’s mia. They’re going for the jugular

I mean, it’s like we’re what why are they taking out all their top ceos?

This would be like putting ilan and jeff bezos on the bench. What is it? They just don’t want any heroes

I don’t know. I mean, I guess maybe the speculative part in me would say

They’re showing them who’s really in charge of these companies

I mean it would be crazy to your point if the government of the united states

Forced sundar pichai and tim cook and mark zuckerberg and elon musk to resign. It’s like hey, sorry

I’m, sorry, you need to leave right now and put somebody else in and deactivate their badges

Yeah, we just we just relentlessly criticize them, right? But but yeah, we just demonize them

We just try to cancel them

but look

But they deserve that level of scrutiny because the amount of power they have but but yeah that we don’t we don’t

Put them in jail or house arrest or drive them out of their companies and that is a big advantage for the us economy

The treasury department here in the united states is doing a little saber rattling. They want to know

Anytime there is a ten thousand dollar transaction in any kind of digital token

And uh, they’re talking about a cbdc

To do their own cryptocurrency. So they’re putting out a white paper for feedback this summer

um, and uh

We are now seeing a pullback on bitcoin from you know, uh, mid 60s to uh, you know now into the 36 37

Thousand per bitcoin. Do you think this is the end of the beginning beginning of the end?

It’s the beginning of the beginning david rubinstein was on cnbc

Today and david rubinstein for those you guys don’t know is um was a co-founder of carlisle group

You know more blue chip and blue blooded you cannot get

And very connected in washington and you know, he said it best where he said, you know effectively

People want this and the government will

Uh have no choice except to support it because you can’t take something like this with this much institutional

and retail demand away

so we have to go to the place where

Now crypto needs to be like everything else and maybe the crypto stands get upset with that because they don’t like it that

You know a bunch of their parents are all of a sudden going to be buying tokens and stuff

But they got to get over it. Um, then this stuff should be, you know transacted in the same way

You transact anything else you buy it you sell it you get a tax return you pay your taxes and you move on

this reminds me of the transition that we all went through with I don’t know if you remember kazaa and napster and

Bit torrent like everybody all the we a lot of our contemporaries in their 30s, you know, whatever 10 20 years ago

We’re like you can’t stop it. You can’t stop it and it got stopped

you know like you made it illegal and you prosecuted people and then you came up with solutions that were regulated like spotify or

You know netflix and you gave the consumers what they wanted. So

David, do you think this is a similar path right now that we’re going through which is

The crypto zealots and the and the and the stands are gonna

basically have to

Get used to as chamat saying their parents buying it and crypto not being this underground thing

But being regulated in in a major way in the united states and is that a good or bad thing?

I I think the thing that that’s happening quietly behind the scenes is that major wall street players

institutions endowments and so forth

Over the past year have decided that bitcoin and crypto is a legitimate asset class and they’ve been allocating to it

Huge huge pools of capital balance sheet capital have been allocating into it

I don’t think that’s gonna change. This is probably a pretty good buying opportunity. We’ve seen these

crashes and bitcoin many many times over the years

It plummets down and then it goes back up and it eventually goes back up reaches a new peak

So this is probably a pretty good entry point for the next rally

we don’t know when that’s going to be but the whole point of bitcoin is that

It’s censorship resistant

And china can do its best to try and stamp it out, but I don’t think they’ll be successful at that

You don’t you’re so wrong about that

That is the most naive take worst take you’ve ever had. How’s china going to stop bitcoin?

Uh, how do they stop vpns? They put people in jail. How do they stop religion?

They put people in jail

They may make it incredibly hard for chinese citizens to get a hold of bitcoin

I agree with that, but they’re not going to be able to stop bitcoin

They’re not going to stop bitcoin in the west, but they will stop it in china

They 100 will stop and you know how many servers are in china

I mean go talk to the people who were in tiananmen square about what miners will have to move out the miners

Miners are done. And then if it’ll be an underground thing, it’ll be like having a vpn

Which is five years in jail for selling vpns

What do you think about the irs requirement that you have to report any bitcoin transaction over ten thousand dollars?

Do you think that that and americans can be prosecuted for not reporting, right? So I don’t know how much that’s

Fine, so what do it? So let’s get over it

20 of the transactions that might have been this is this is the silk road fallacy that you know that the only

Legitimate use for crypto or I said 20. I didn’t say okay fine

But so maybe that makes that that small fraction of illegitimate or illicit use cases

What do you think

No, sex. I think the point is um that they’re trying to chase down. It’s not about illegal use cases

It’s about not reporting a taxable gain on your bitcoin before you use that money to buy something

So sure, of course about tax evasion, but look

But that’s not that’s not going to stop bitcoin usage. Um, you know

Smart people who’ve been trading bitcoin been paying taxes on it for years

That’s not I don’t think that’s really an issue

If you were in china and you had created your wealth in china or many many other countries all over the world and there were

currency restrictions and controls and the government was asserting more and more power and were putting

Business leaders under house arrest and and seeking to put them under their thumb

You’d be trying to convert as much of your net worth into bitcoin as possible

So that all you have to do is if you ever had to flee the country

You wouldn’t have to have dollars in your suitcase or gold bricks or diamonds

You’d simply have to have a password in your brain

That you could access at any computer terminal when you got out of the country

And so that I think that sort of digital gold

Is a phenomenal use case of bitcoin and the more oppressive

All these countries become the more they increase the value of that use case

What do you think is the black swan event in crypto in bitcoin in particular?

Taxation in the united states a 10

There’s an additional taxation like you do on

Cigarettes, that would be for me the united states putting a tax on it. That makes it less competitive with our our national

Coming cryptocurrency the cbdc that the united states will launch in the next two or three years

They’re going to say if you want to use any of these other currencies

There’s a 10 tax on them. We want you using ours the legitimate one

There’s there’s a very negative black swan

That obviously has never occurred. Um, but if anyone ever manages to counterfeit a bitcoin

Or this is the double spend problem, right?

If you could ever if you could ever double spend or or figure out a way to create bitcoins

Or counterfeit them whatever that weren’t in the blockchain if the number of bitcoins ever grew beyond the 21 million

That’s just built into the way that the whole thing works if that ever happened bitcoin is instantly worthless

That would be the black swan on the negative side

If it didn’t happen in the first 11 years, what do you think the like on a percentage basis that it happens in the 20th?

Exactly. It’s too expensive now and it’s too it’s too visible like the the way that it would have happened

It would have happened in the first two or three years or the argument could be maybe opposite that now it’s so valuable

That it’s worth investing to figure out a target. Yeah. Yeah, and and and it’s and and rather than have it be about a diminishing probability

It could be an increasing probability over time

Which is that the pathways to get there start to get resolved whereas in the past you didn’t have enough time to resolve those pathways

And i’m speaking highly theoretical here. But like certainly

Doesn’t take into account that it’s open source and that everybody can see it. So

You would think that everybody would discover the vulnerability at the same time right in an open source project

Well, no, I think the I think the issue practically speaking in this would be

Is that there’s a there’s a lot of potential for a lot of potential for a lot of potential

Well, no, I think the I think the issue practically speaking in this would be that you would see there’s resources getting organized meaning

You’d see silicon being bought in volume by some centralized player

And then you’d have to see water and power come together as well

and this is where I think it’s just not realistic where

Today that I think the horse has left the barn because if you try to basically capture

Enough hash rate to kind of like overpower this network

It’s it’s it’s like the scene in austin powers where he’s screaming in front of a

A steamroller, but the steamroller is moving at like one foot a minute, right?

You see it coming. It’s just like you just see it coming

Well, would you have a black swan friedberg? You asked a lot of questions. So do you have one?

I think about it a lot. I don’t really I mean, it’s a black swan. It’s because it’s a black swan

so you don’t really see it coming but like

You know the the thing about bitcoin


Which has always given me pause

Is the fact that

The only way it works is if everyone believes that more people are going to believe in it tomorrow than believe in it today

Well, that’s the only way it appreciates

yeah, but the

for for a variety of reasons, it’s also the only way that it works because

Um, if it starts to depreciate it becomes almost like this unwinding

Circumstance and there are moments where it unwinds, but then people kind of say well, you know what more people are going to get on this

There’s the chinese argument. There’s the argentinian argument. There’s all the reasons why people will try and store wealth in this system

And that becomes a rationale for continuing to bet on it

And my observation is so many people that are active in bitcoin

Compare bitcoin to the price of the dollar which to me seems like it doesn’t make sense relative to the intention of bitcoin

Which is to not be part of the monetary system that uses the dollar as kind of a de facto, you know

system of value

And so why have the comparison to the dollar as the objective for bitcoin?

Why is the objective not transactions use cases number of people that are active on the network, etc, etc

And nobody buying it is buying it as a substitute for dollars. They’re buying it as a lottery ticket

So yeah, that’s that’s right

And so then it becomes this rationale that it’s like it’s an investment that you put money in

in the form of dollars or your local currency

With the intention that you will be able to get more of your local currency out at some point in the future

And the only way that works is if you expect someone else will buy it from you at a higher price in the future

Therefore it’s all about propagating the uh, you know the marketing around the bitcoin

Whereas if your objective was really about making this become a replacement currency system or replacement monetary

system you would ultimately

Care less about you know, what’s the dollar value per coin and you would care more about how many people are using it

You know how active let me build on that question

so sax or chamath if

the cbdc

And american’s currency, you know starts to move towards a bitcoin blockchain like experience

What would america start to look like if 10 or 20 percent of your dollars?

Instead of being held in a bank. We’re on a blockchain with an american a government a government-backed blockchain

Doesn’t accomplish anything. It’s still that people are it’s centralized and not only is it centralized but also

It’s still prone to debasement, right?

Yeah, and so look human beings have used everything from gold coins to seashells as money

We can make anything money that’s easy to transact if we all agree on it

That’s the sense in which bitcoin is the bubble that becomes true if everyone believes in it provided

Provided the number of bitcoins stay at 21 million and that the technology

Enforces the scarcity the problem we have with the u.s

Dollar is the government can just print as many of them as they want. Yeah, you change the denominator problem. Yeah, and

So I think there’s a positive black swan as well for positive for bitcoin

Which is stanley druckenmiller thinks in the next 15 years the u.s dollar would no longer be the world’s reserve currency

Well, what’s going to replace it the positive black swan would be that bitcoin becomes

If not the a world reserve currency an unofficial world reserve currency

Why because people trust it?

They trust the decentralization more than they trust any government

And that would that would be a big is that in?

Is the united states and china are they going to let bitcoin become the world’s reserve currency?

Well, it’s not a choice that they have you sure so yeah

There’s nothing they can do

What about the law and guns and jail and tax?

I don’t I don’t know what that means

There’s there’s nothing that they could there was nothing that they could do to stop it before there’s nothing that they can do to

Stop it now

Well, you can’t get the new york times in china and you can’t practice religion there

So they have a pretty easy system. They put you in jail. They want to stop bitcoin. They could just put you in jail



Finding out that you have bitcoin and just well because they have a hundred percent

Uh view into the internet there they have how on because they have routers

That’s how they capture all the uyghurs is they know their location?

Because they have mobile phones and when they use signal or any other encrypted technology they catch them

No, I don’t I don’t think that’s how it works

But that’s how they catch all the dissidents there is they they have them and they also have apple’s entire

Data center is controlled by the chinese government

There’s no ledger somewhere that says this specific wallet address equals david sacks and there’s not going to be one anytime



And so you’ll have these centralized wallet authorities that actually, you know have a lot of account information

But the reality is the sophisticated actors, you know

Use tumblers they they they wash sort of like their

Their paths in a way where it’s very difficult to figure out who these people are now

If you if you don’t if you use a site that doesn’t have kyc that’s always going to be the case and you know

People with huge amounts of bitcoin are sophisticated enough to know how to stay anonymous if they want to

For everybody else who doesn’t care because for them it’s sort of an investment asset class and an you know a hedge

Then they’re not going to care either and the point is when enough people own it

Governments aren’t in a position to track record of them. Just waking up one day and pulling the plug on anything is zero

That’s not how people do things

You have to have like centralized policy and support

And I don’t see it one way or the other of all the things that china and the united states will face over the next

30 or 40 years

This is like 50th on the list

Saks, what do you think?

Any closing thoughts?

I mean, I think we’ve said it. Um

So yeah, I mean look I think I think if you’re going to stay in a place like the united states

You need to comply with tax law. You’re absolutely going to report your bitcoin holdings if it’s required

But if the reason you’re buying bitcoin is because you’re fleeing a country

Or you’re worried about fleeing a country. You’re obviously not going to report it and that’s the that’s the advantage of it

Is that it’s a portable?

money supply

That again, you can just um, you don’t have to carry anything with you

You just put a password in your brain wallet. Tell me about ufos before we leave

I mean, can you believe this thing? This is the craziest thing. I I so there was a yeah

There’s a 60 minutes episode that just happened deputy assistant

Secretary of defense for intelligence literally said the crafts we’re seeing are and then in quotes far beyond

Anything that we’re capable of there’s nothing we could build

That would be strong enough to endure the amount of force and acceleration imagine a technology that can do 700 g-forces flight 13 miles

per hour evade radar

And has every no obvious signs of propulsion and yet can clearly defy the effects of earth’s gravity

That’s precisely what we’re seeing from the director of advanced aerospace threat identification program

I mean, is this real like how is what what do we do? What?

Our government says there are crafts that outstrip our arsenal by at least 100 years to 1000 years at the moment and we’re like

Meh, what do you think friedberg? You’re the scientist here. There’s a if you read the original

uh treatment written by arthur clark for the movie 2001 a space odyssey

Which was written before the movie and then the book was written after the movie

He makes a really compelling point

and the point he makes is that


civilizations achieve

a sophisticated enough level of technology

There’s no longer a need to physically transport yourself from star to star and transport yourself around the universe think about this for a second

Take what we have from virtual reality today and fast forward 200 years

And then take what we have in terms of you know

The ability to print and create anything we want on demand and fast forward two or three hundred years

Those two conditions alone

Might give us the ability to strap on something to our brain

And literally and remember our brain is simply sensing what our body is given

And if you can control what your brain is sensing through some strap-on device or whatever

You don’t actually need to physically be in the place where that happens

So if we can remotely sense what’s going on somewhere else in the universe or some other part of our planet

And we can remotely pick up those signals and view them or experience them

You don’t need to physically be there and then secondly all this sorry all this via strap-on, okay

Yeah, and then secondly, I shouldn’t use it. I shouldn’t use the term and then secondly if you could print it

Yeah, but think about if you guys ever watch the tv show star trek next generation

Which I would guess maybe one of the replicator

Or the replicator or the holodeck and you could walk in number three on my list of star trek

Yeah, seriously if you walk in and you could literally recreate the physical space that you want to be in to accomplish anything

The holodeck and then you could print anything

Why would you use all the energy and all of this work to transport physical matter?

From one part of the universe to the other when all matter is transmutable

And the only thing that differentiates things is the photons coming off that matter, which is just to sense it

So if you can sense things remotely

While you’re physically here, why go through the trouble why go through the trouble?

And so the argument the same reason that we go to hawaii and not just watch a movie

No, because we don’t have enough of the sensing capabilities today to truly recreate being in hawaii

But imagine if we did and and we are very much on the path to doing that and in two 300 years

We have the ability to physically recreate what it’s like for our body to be in hawaii in every form smell taste color

Everything about being there physically and our body experiences it. Why the hell would you fly to hawaii?

You could meet people you could socialize

So in a world short in a world where that technology exists, which could by the way be neural link, right?

Where you can, you know, put these signals directly into the brain, etc

Moving physical matter from one part of the universe to the other makes zero sense

All matter is transmutable. You can convert one atom to another using a technology locally

So you wouldn’t do that

And so that’s the premise of 2001 is that you’ve got these local communication pods that just transmit information from different parts of the universe

You don’t need to physically transport yourself

So that’s the that’s the the macro kind of argument against this notion that ufos or aliens are in a physical spacecraft visiting

It’s so old school technology that it makes no sense

It’s like saying, you know, oh my gosh

All these people are coming over to the united states on horses from europe, you know

Like it just like why would they do that? Why would they use a horse?

Uh, so so I think that’s the argument against

Ufos being aliens and spacecraft now, is there a really cool technology that has this advanced capability and they’re these crafts

That are in our sky and someone has that technology maybe

Um, but i’m not sure about this

General pieces, I mean you blew my mind with that. So yeah sax, uh, I you obviously don’t care so

I have no way for this to increase the irr of my fund or to get me another home

On planet earth. Why would I want to go?

I just somehow feel like if they’re really ufos it’d be like an even bigger story like we’d all know it

You know, it’s not going to be some like weird fringe conspiracy thing. Here’s the here’s the thing

I do not care about emotions of humans. I can tell you why I care about the emotions of others every single

Photograph that’s been taken in the last year is

Absolutely recognizably better than the one taken 10 years ago

And every single photo or video of these aliens looks like it was shot in a on a camera from 1950

On film that was left in somebody’s basement

And meanwhile pick meanwhile pixar movies can recreate literally the ocean

We’re recording this on zoom. Why can’t a jet get me a clear shot?

There’s not one clear shot of this show me the alien in 4k high def and then i’ll believe it

You ever see a spacex launch where it has a camera by the engine and we can see the engine like why can’t we get?

a shot of the

Until then I will be traveling between my homes living my best life. I am living my best life not in san francisco

We will get chesa budin recalled I will tell you sax

I don’t think you need to harp on the chesa point anymore because I don’t hear anyone making the case on the other side anymore

Dustin moskowitz

Yes, what from asana, yes, nick pull up the tweet so, you know, I’ve been basically because look there we fired him up

Here we go. No, let me get this

Insert corner here


Run rage function now

No, look we’re taking all this heat from these stupid reporters are talking about our donations

You know like asking what are we up to look?

We’re very public about what we’re up to but this is a terrible tweet from dustin there

There have been these tech billionaires dustin moskowitz reed hastings and mike krieger

And they’ve been donating money

To what to chesa budin and gascona. That’s disappointing

Yeah, horrible. So I asked I just said why are you donating money this insanity and dustin’s still defending it?


Said i’m gonna mute you now because you know, you didn’t want to you didn’t want to wait just in fairness

Let me pull this up

Dustin’s quote is I live in the city and i’m not going anywhere crime happens to me, too

Trust me. We write extensively about why are of our grants here? You know, here’s the thing. I think dustin reed hastings

um and

Their spouses are very involved in criminal justice reform

and what we have to do is give somebody like dustin or reed hastings the benefit of the doubt here and say

We understand your donations

were meaningful to you and you wanted to

um, maybe lower the incarceration of black people in jail for

Crimes that were not violent and we agree

Let’s no this conversation

I’m not giving them the benefit of the doubt. Let me explain why okay

So reed so this is a good example. This reed hastings thing is a good example

By the way, just today it was announced that he donated three million to gavin newsom

um in any event, so

You know, he keep he look he’s on that side of the spectrum, by the way

There’s a little backstory there. I don’t know if you guys remember when there was pressure

Uh on the facebook board to kick peter teal off back in 2016

It was reed. That was from reed. That was from reed hastings. Okay, so the guy is very close-minded

I think it’s his wife is actually handling this

He was the board member who pushed to get peter off because he couldn’t handle the fact

That there might be another board member who had disagree with him politically

So it’s a very close-minded point of view, but let’s take let’s take this example of crime in la. Okay, so we had this


Where george gascon who was a failure as da in san francisco?

He goes down to la and runs against the the veteran da down there. Jackie. Lacey who

It happens to be a black woman a veteran season da

Competent nobody had a problem with her. I think she’s a democrat. Okay. It’s not like this is a right-wing person

And so george gascon basically fails his way out of san francisco goes down to la and he basically

Um dislodges her from that seat with 15 million dollars an unprecedented amount spent a da election

Where did that money come from 5 million came from source 5 million came for reed hastings

5 million came from blm now

You know in any other context the idea that you’re going to fire

a talented competent seasoned veteran black woman and replace her with

An incompetent white male that would be seen as institutional racism, but nobody complained about it at all

But it’s outrageous. Yeah, what is there? What is the most charitable was behind that? What is the most charitable?

View of why they’re supporting

Gascogne and chesa well, there’s this decarcerationist agenda. And so yes, you’re you’re right that they see

Mass incarceration is a problem, but the problem is it is but the solution is not mass decarceration

That we need something in between and the problem with gascogne and chesa boudin

They just want to let everybody out. They don’t want to they also don’t want to add anybody

So I think if their agenda is to lower the number adding people is against that

There are people who need to go to jail murderers need to go to jail people dying every day

in san francisco

uh by at the hands of repeat offenders

Who chesa boudin has made the decision to let them out of jail, even though they should be in jail

These are dangerous violent felons

the problem with this is I think chamath I would like to get your feedback on it is you know you

When a person gives these kind of donations and they make it their public persona

And it doesn’t go well

How does one?

You know, I don’t know disentangle or

Reconcile they made a bet

That had a bad outcome because this is obviously a bad outcome. You don’t want the city to

devolve into chaos

I don’t particularly care about san francisco and I think I think the two

The two of you guys can talk about it on. No, i’m done

I’m gonna get rid of my place in the city on colin, but I I could I couldn’t care less about how that’s


I got nothing to say

Okay, I want to add this one thing. Look I so I care because I live there

But but this trend this is not just san francisco this whole idea of these radical

Decarcerationists, they are running for da in every major city. This is going to be a national trend

and they’re going to cause a lot of

Carnage a lot of death and destruction until the people realize

And there will inevitably be a backlash to this and hopefully just not too many people

Fair enough. I I don’t want to be too flippant. My point is it’s a really important debate

It’s going to happen in every city

But folks need to get engaged in those cities and do something about it

If you want to hear the argument of why this is happening

You can go watch the ted talk on youtube of adam foss f-o-s-s. He was the original like

Proponent of the da’s coming in to drive the decarceration

decarceration movements

Um, and you know, I just think it’s important to be informed of the other perspective

Uh in evaluating where folks are coming from that are that are proponents for this movement

Yeah, i’m trying to be charitable towards their position dustin and reed if you want to come on the pod and be a bestie guestie

I guess maybe doesn’t doesn’t respond to me and said listen

We don’t know what the counterfactual is if we had a more aggressive da that was his arguments

We don’t know the counterfactual. So I of course so I posted a list of people of innocent victims who’ve died

Okay, because directly because

Of a decision that chase abudin made that’s your counterfactual

Yeah, that’s your counterfactual

All right. Listen, it’s been an amazing episode and uh,

No plugs, no ads. No nothing if you like the show great

And if you don’t like it, how the hell did you make it to the minute 75?

for the queen of quinoa

The dictator himself chamalee papatia. I’m having steak tonight

If you’re vegan david friedberg, you’re not invited to steak dinner, you’re having beers tonight i’m having beers tonight

You’re having beers and roasted eggplant tonight. You’ve never eaten fish in your life. Never had sushi and sax

By the way, that’s true. I don’t know

Sax you’re gonna talk about sax’s help. Where’s your first second and third dinner tonight? I’m on a seafood diet

I eat I see the food and I eat it

Sax if we take out your postmates

How long is it gonna be eat it out

The fat guy on this pod

I just bought my third machine. This can’t be happening. It’s happening. This is your twilight zone episode

I just bought i’m going I decided i’m going twice a week with the trainer and I just bought the hydro

So now I have tonal

Peloton tread and I got the hydro i’m going from smart machine to smart machine. Hey, are you spack? Oh, I got it

Oh good question

No, no, no comment comment. Okay. Sorry

Tweet people have other things to do guys. I gotta go. I gotta go. I gotta go. All right, everybody

Yeah, get a salad, okay

And of course the dictator here

I write a minimum of 100 million dollars

Coincide when you see the other warriors, it’s hard to make good investments. It’s hard to build a company

I am a complete byproduct of a social safety net

Uh, and at some point you have to figure out whether you actually want your kids to have asthma or not

Or you care more about the land grass

I’m king of the spam impotent money is free and it’s not I pick up the slack

Impotent money is free, but it’s not

I get thousands of billions confused. I get thousands of millions confused. I get thousands of billions firing on also

You just want to be called king

Run over I just can’t stand

It’s hard to make it it’s hard to make good investments it’s hard to build a company

Because if it was easy, everybody would be doing it all the time

This one man for yourself, it’s all about you you can figure it out

with the rugged individualism, that’s just not realistic like

If anybody who want who’s listening to this who wants to go to the french laundry stay at home

Pour a bunch of salt on whatever you’re gonna eat

Okay, melt a stick of butter in the microwave stick of butter in the microwave drink it and then basically take it

1500 light it on fire

It’s hard to make it it’s hard to make good investments it’s hard to build a company

Because if it was easy, everybody would be doing it all the time

This one man for yourself, it’s all about you you can figure it out

with the rugged individualism, that’s just not realistic like