Yesterday, the game went off the chain.
It was, it’s, we started off at 500 and a thousand,
and then we were like, ah, these $500 chips are so annoying.
Then we started to play a thousand, a thousand.
Then it was a thousand, two thousand.
Then it’s a 1,000, 2,000, 4,000.
Then one, two, four, eight.
Then one, two, four, eight, 16.
One, two, four, eight, 16, 32,000 coming around.
Oh my God, how much did you lose?
What was the big winner and big loser?
I’m not gonna say.
Just tell us how much.
I put minus 800, minus 700.
Don’t say these fucking names, bro.
How’d you do Chamath?
I did okay.
Oh, oh, oh, he did okay.
You can tell that Chamath lost
because when you ask him, how’d you do?
And it’s like, just, he goes from this super effusive
talking about the game to just like one word, fine.
Yeah, how was your night?
He’s like, look, I shit $42 million for breakfast.
It was fine.
Here we go.
I’m going all in.
I’m going all in.
I’m going all in.
Don’t let your winners hide.
Don’t let your winners hide.
Don’t let your winners hide.
Rain Man, David Saks.
Rain Man, David Saks.
I’m going all in.
I’m going all in.
I’m going all in.
And it said, we open sourced it to the fans
and they’ve just gone crazy with it.
Love you guys.
I’m going all in.
I’m going all in.
I’m going all in.
I’m going all in.
I’m going all in.
Hey everybody, welcome to another episode
of the All In Podcast, 50 episodes down.
And yeah, we’ll definitely get three or four more in
before the band breaks up with us today.
Again, from an undisclosed location,
David Saks, the Rain Man himself,
Chamath Palihapitiya, the dictator,
and the Queen of Quinoa, David Friedberg.
How’s everybody doing?
How’s everybody feeling?
How’s everybody’s week going?
I feel really good.
I feel super grateful.
Right, your poker game last night?
Yeah, the stock market’s up today.
He feels grateful.
I feel grateful.
It’s been a good week.
It’s been a good week.
I feel so much equanimity.
Market’s up 4%.
Friedberg, how are you doing?
My wife went to the hospital three times this week,
all three times thinking she was in labor.
Hey, bro, are you, how, I mean,
we’re two centimeters dilated.
We’re still waiting here.
I mean, nothing’s happening.
We are there too.
And we’re just waiting any day,
like literally any hour.
So we were.
How do we get action on this?
Can we bet who’s gonna come first or?
I think Friedberg’s gonna come first
because it’s his third.
It’s only Nat, it’s Allison’s third, it’s Nat’s second.
So we’re gonna lay odds, two to one, what do we get?
I’ll take the over-under on, what day is it today?
Today is the 15th.
We’re getting induced on the 26th.
It’s 11 days from now.
I’ll take the over-under on the,
I’ll take the over-under on the 21st.
That you’re setting the line?
I’ll set the line at the 21st of October.
I’m going over.
I’ll go over for a thou.
This is for Nat?
I got the over, you got the under.
What do you got, Zacks?
Over-under on the 21st.
26 is the expected date.
What are we betting on?
We’re betting on Nat.
Nat and Allison’s due dates.
Some people pay attention when their children are born.
And when their children are born, shift.
Everybody get action.
Aren’t you guys a little too old to be having kids?
I mean, are you going to see them graduate?
What’s going on here?
You got a vasectomy?
I mean, Zack, some of us are a whole bar mitzvah
younger than you.
So you snipped.
I would, if anybody was snipped,
I would guess it would be Zacks.
Are you, are you snippy snippy?
Is this the type of vital information
you think the audience wants to know?
Yeah, I think they do, actually.
I think that’s a yes.
I think he’s been snipped.
Chamath is definitely not snipped.
You can, you can.
Friedberg’s not snipped.
Do you want to come over here and inspect?
Do the procedure?
Conduct an inspection?
I don’t think you can visually understand that, Zack.
Let’s, let’s, we gotta buzz this out.
Let’s not go, it’s not visually understandable.
Yeah, Friedberg’s definitely not snipped
as proven by his wife being pregnant.
I don’t think you say snip, bro.
I think you just say vasectomy, though.
Ah, I’m just, you know, I think you say snip snip.
I think Zack’s has been snipped.
That’s actually a good bet.
We could book it on Zack’s being snipped.
Okay, listen, a lot of topics to get to.
I think we were trying to get to this topic last week.
There’s been a supply chain interruption right now.
There’s some shortages, obviously,
of key components like microchips.
We all know this.
According to Car and Driver,
the top three models impacted by the chip shortage
were the Ford F-Series pickup trucks,
Jeep Cherokee SUVs, and the Chevy Equinox SUVs.
Basically, a lot of the cars
that have advanced driving systems are now removing them.
I was looking at getting an SUV for the winter,
and I was looking at the Cadillac Escalade,
and they took self-driving out of the 2022 model,
or the autopilot, basically,
because they can’t get the chips.
And we all know why this is happening, obviously, COVID.
And then also on top of it, demand.
So people are buying second computers, third computers.
Places like Dell are having,
and Apple are selling a lot of desktops, a lot of laptops.
And there’s also a labor shortage.
So the labor force, obviously, here in the United States
is much smaller than it was.
We all know that people are raising salaries
to try to get people to come back to work.
They’re turning off the bonus unemployment
early in some states.
We’re here in October.
This is all supposed to be turned off by now.
So I guess I’ll start with you, Chamath,
in terms of the markets here.
What do you think is happening?
And is this an acute risk
or just something that will pass?
I think the, well, this is where I think
I kind of generally disagree with the market.
I think that most people are under the impression
that these are short-term
kind of contractions and expansions,
and that this is just a thing
that needs to get worked through the system
as we readjust to a post-COVID world, blah, blah, blah.
I think it’s different.
And the reason I think it’s different
is if you just look at one thing and one thing only,
which is that we have a massive labor shortage in America,
and there is an incredible stat that I saw,
which was the average hourly earnings
of non-manager people in hospitality and travel.
And the average salary, the mean salary,
was around 20-some-odd dollars an hour,
and it’s now 33 bucks an hour.
And so what that, to me, says is that
we are going through a really sustained period
where you cannot get people to do the work
that needs to get done.
Biden had to call the Port of LA
and try to get these guys to be open 24 hours a day.
The President of the United States is calling a local port,
trying to get it to stay open.
But why can’t they stay open?
Because you have longshoremen,
you have all these unionized folks
who will expect to get certain levels of compensation,
which they deserve, in order to do that work 24-7,
but then all of that is gonna get put through the system.
And if you still have millions of jobs
that needs to get done in order for the economy to function,
the only efficient way that that’s gonna get resolved
is by raising salaries.
And those are consistent and persistent.
Those things are not just like, oh, you know what I gave?
Yes, I did say 50 bucks an hour,
but now I’m taking you back to 20.
Yeah, you can’t take that back.
You can’t do that.
That’s gonna be, that’s, yeah.
And then, so I tend to, so that’s one thing.
And then second, so there’s people, right?
So labor capital.
I just think it’s getting more and more expensive
to get folks to do work.
And then there’s the raw materials
that you use to make anything.
And everything that I see is that stuff is going bananas.
And so I put these two things together,
and I’m like, I think this stuff is here to stay.
I’m really kind of a little bit of a, you know,
and I had not worried.
And you can see in every episode before this,
I was always consistently like, there is no inflation.
You can fade the inflation trade.
Now I’m kind of positioning myself
to hedge myself in this situation.
All right, Freeberg.
We’ve seen the pictures of the Long Beach
and the Los Angeles ports.
There’s just ships out there,
like I think 70 or 80 is where it peaked at in July.
I don’t know, have the latest data here of when it updated.
But is there not a silver lining here
that if people are making more money,
then we’re going to increase the size of the middle class
and we’re going to, you know, increase upward mobility.
And that is a double-edged sword.
It’s great that we increased the middle class,
but then they’re going to want to buy stuff.
So if people are now making 35 bucks an hour
and they were making 20, now they got more disposable.
Now they’re going to go on Amazon and buy more stuff.
And it’s going to accelerate this problem, is it not?
The challenge is the rate of change.
This is what the Fed tries to manage.
And, you know, there’s a White House
Economic Advisory Committee that’s involved
in trying to figure out what’s going to happen here.
Because the current estimate is it’s going to take
at least a year or probably a year to work
through the current log jam and the global supply chains.
And during that period of time, as Chamath points out,
what’s happening is the cost for goods is climbing
because people have to charge more
because there’s limited inventory
and people are bidding up the value of that inventory.
As they do that, the businesses end up
needing to get more labor.
And so they have to pay more to hire people.
If they pay more to hire people,
those people end up demanding more.
And the cycle can actually go the wrong direction
where you have an inflationary spike that persists.
How do you taper that inflation?
It’s not necessarily great for economic growth
if you can’t produce the stuff.
And it can actually cause these runaway kind of effects
in the dynamic system of supply and demand
when you have these things clogging up the system for supply.
So it is a real risk.
And it is the biggest thing that the White House,
this economic task force is kind of trying
to figure out right now is where’s the balance lie
where you can basically try and taper
this inflationary effect that’s being caused
by this log jam in the supply chain
without causing economic disruption
by raising interest rates.
And so it’s a really kind of complicated
second and third derivative formula
that needs to kind of be resolved.
And that’s why so many of these little elements
are so important to get right.
By the way, rates, by the way,
central bankers around the world have raised rates.
The only place that hasn’t gone up is Europe,
ECB and the United States of Federal Reserve.
So, and let’s be honest, Europe and the United States,
we absorb labor and materials from all around the world.
We are the net importers.
We are the net ultimate buyers of last resort
of all of these things.
And so if you’re seeing inflation
in those other supply driven economies,
they are gonna come on shore.
They’re gonna hit us in the face.
I think prices are going up.
The other free market argument that could be made
is that these current trends will accelerate
a trend towards more automation of low cost labor
because it now will make sense for businesses
to invest in the capex, in the infrastructure
and ultimately for technology companies
to build that tooling to support that infrastructure
that will automate jobs like working in fast food,
like doing local delivery, like doing factory assembly,
like moving things across the country in trucks.
So self-driving trucks, factory automation,
biomanufacturing, additive and 3D manufacturing
and 3D printing.
These are all industries that could benefit
from the fact that labor now for kind of,
traditionally low income work has gotten so expensive
that it starts to make sense to switch
to the technology alternative,
which historically may have been too expensive,
but now starts to make economic sense to businesses.
And so there’s a number of these automation industries
that may significantly benefit
and that ends up ultimately being deflationary
and the market comes into balance.
So that’s another way to kind of think about the macro
on what may play out here.
There’s a bigger risk here than just inflation.
I mean, there’s also a risk of stagnation or stagflation
because it’s not just that prices are going up
and workers wages are going up, which could be a good thing,
but the goods and services just aren’t being produced.
So, I mean, I know like my own experience,
I recently ordered a Tesla.
When I got a Tesla a couple of years ago,
like I got it in two weeks, it was like almost instant.
This time they wanted me to wait two months
and it’s got an alert that it’s gonna take
two more months beyond that.
So we have no idea.
And if Tesla doesn’t get most of the money, I don’t think,
until I actually take delivery of the car, right?
That’s when you make final payment.
So now they can’t book that revenue and those earnings.
And Tesla isn’t even in the car company
that’s most affected by this,
the big traditional American auto companies like Ford
are even more affected.
So if companies cannot deliver their products,
that could cause an economic recession.
And I think like these are major storm clouds
looming on the horizon.
Now, what is the cause of this?
I mean, I think it’s multifactorial.
A lot of the things that Chamath said,
I just wanna really highlight this port issue.
There was a great tweet storm by Zach Cantor
earlier in the week where he said,
the supply chain crisis is a clever rebrand
that makes it seem like there are grand exogenous forces
at work rather than the unions holding ports for ransom
while dozens of ships pile up,
working just two shifts with a two hour break
in between the country at their mercy.
And he goes on to elaborate on that.
And that is why, I mean, Chamath’s point.
They’re allowed to do that.
But to Chamath’s point,
this is why Biden felt the need to get involved.
So the problem is if you read the fine print
on the story of Biden announcing
that the ports of LA and Long Beach will open 24 hours,
which they clearly need to to get the goods to market.
If you read the bottom part of the story,
everyone’s announcing their intention to go 24 seven,
but there is no date certain for when that’s gonna be.
It’s a negotiation with the union.
So Chamath, to your point,
they are gonna have to negotiate with the unions.
Initially, it looked like the story
was that Biden was gonna use his sway,
his clout with the unions
to basically push them to take a deal.
But I don’t think he’s really done that.
Everyone’s just announcing their intention to negotiate.
Well, if the ports are holding
the whole country hostage like this,
that could cause a recession.
I think that’s gonna rebound very badly on Biden.
Wait, hold on a second.
I think they’re running 24 seven now, aren’t they, Sax?
Long Beach and LA are both running 24 seven.
Well, I just posted this article that came out,
I mean, like yesterday.
And it says, it was published two days ago.
And it said there was not a date certain for when this,
oh, it’s updated October 14th, which is yesterday.
And if you read the bottom of the article,
it says they have not determined a date
for when 24 seven operations will start.
They’ve just merely announced their intention.
Oh, yeah, I’m just saying that the Biden administration
says it’s not really,
they announced it as if it was a done done.
Look, unless Biden is willing to, listen,
I mean, Chamath, you’re right
that they’re entitled to negotiate.
But here’s the thing.
I mean, they’re holding the whole country hostage now.
They’re holding the economy hostage.
So at a certain point, if their demands are unreasonable,
it’s I think proper for the president United States
to step in and say, guys, this is ridiculous.
You have to go back to work.
We’re gonna make,
we’re gonna help negotiate a deal here.
That’s what Reagan did with the air traffic controllers.
The air traffic controllers union
shut down the whole commercial aviation system.
Reagan got involved, said you cannot shut down
the economy this way.
You must go back to work.
So I think Biden is probably gonna have to get up for air.
Not that these longshoremen are, or the ports,
I guess they’re not striking.
They’re just not doing an extra shift.
But he could do an executive order.
Look, if they’re doing two shifts,
if they’re doing two shifts, two hours a day,
that’s like withholding, that’s like a partial strike.
Wait, wait, they’re doing two, two hour shifts
or two, eight hours? That’s what Zach Kanner was saying.
Eight hour shifts.
They can’t be doing two hour shifts.
That doesn’t make sense.
Why would anybody go to work for two hours?
Read what Zach Kanner posted.
He said that they’re working just two shifts
with a two hour break in between.
Okay, but those might be two eight hour shifts
with a two hour break in between is how I read that.
No, no, no.
He says, read the tweet here.
He says, before any changes this coming week,
the longshore routine at the ports involve two shifts,
8 a.m. to 4 p.m. and 6 p.m. to 3 a.m.
An overnight shift of five hours is available,
but is up to 50% more expensive and rarely used.
So basically you’re talking about, yeah,
it’s an eight to 4 p.m. shift with a two hour break
or 6 p.m. to 3 a.m.
So basically, yes.
So it is for that six hour, that’s two six hour shifts.
They should be running it like, you know,
Elon runs the Tesla factories when they’re building,
which is 24 hours a day, overlapping shifts.
Just get it done.
There has to be a sense of urgency here.
They’re going to have to pay him some reasonable overtime,
but they can’t, the unions can’t hold
the whole country hostage.
And look, if Biden, unless Biden steps in to solve this,
we will have a recession.
So it will rebound very bad.
Oh, so we do think that this could be a recession.
I think it’s bigger than just the ports.
I don’t think reopening the ports is the entirety of it.
I think there’s a lot of other things going on.
I mean, Jake, out to a point you’ve made,
we had 4 million people drop out
of the labor force last month.
I mean, that was unbelievable.
So yeah, the unemployment rate looks great,
but the number of people actually going to work
is significantly lower.
I mean, that was a huge shock to all the economists
seeing that many people drop out.
There’s still too many people who essentially
are being paid not to work in one form or another,
and that is hurting the economy.
You also have this issue in China,
which is very interesting.
This was, I think, covered in the New York Times
about how dependent Chinese factories are on coal,
and which, you know, is a bad thing.
Obviously, that’s not a clean energy source,
but because of restrictions on coal,
it’s actually started to impact manufacturing over there.
We can debate whether that’s a good thing or bad thing,
but it’s contributing to the effect.
I suspect that China has woken up to this,
and they’re not going to shut down their economy
because of concerns about clean energy.
So I assume this is a very temporary decision.
And then, of course,
you have the whole issue of COVID restrictions.
I mean, there are a lot of international COVID restrictions.
It wasn’t just in the US
where they were shutting down factories
or creating a lot of rules
that got in the way of keeping factories open.
They were doing this internationally,
and there’s a lot of regulations around seafaring as well
because of COVID restrictions.
So you have this pile-up, I would say,
of regulations, ultimately,
I’d say with COVID as the origin,
that have now caused this supply chain crisis.
And unless it gets fixed,
it could absolutely cause a 1970s-style
stagflation-type recession next year.
Chabot, do you buy that?
Do you think we could have this combination
of people refusing to go to work
or just opting out and saying like,
yeah, even if you pay me 35 or 40,
I’m just not interested.
I have enough NFTs, and I don’t want to go back to work.
I actually think that’s exactly what it is.
There was this really interesting tweet
that I saw on Twitter.
Hopefully, Nick, you can find it.
But it was some kid that basically said,
I’m growing up in Atlanta,
and there’s a bunch of kids that I used to run with
who would otherwise be in the streets, right?
Causing all kinds of trouble.
And these kids are now at home,
like specking NFTs and posting on TikTok or whatever.
It’s just a completely different reimagination
of labor and time spent.
And that’s just a very small example.
And so that maybe touches retail
or maybe touches quick service restaurants.
But there’s all these different things
where now that at the end of this pandemic,
people are making very different decisions
about their time and how to spend their money.
And again, I’ll tell you again, there is a lot of people.
You got to remember how many people in the United States
have died or are dealing now
with some reasonably important health issues
at the back end of coronavirus.
Half a million people, a million people.
I want you to keep in mind what I told you guys before.
There is 70 trillion dollars
that has to get transferred down
from all these baby boomers
down to these people in their 20s, 30s, and 40s.
And don’t think for a second
that they’re not making different optimization decisions
around perceived wealth.
So I just think inflation is here.
I think the labor shortage is going to get worse, not better.
I think we’re gonna have to pay people more
to get out of it.
I think prices are going up.
Input costs are going up.
Energy costs are going up.
So this is it.
And I think that probably the Fed and the ECB
are really raising this time next year.
They’re probably in a really, really tighter posture.
What do you think, Freeberg?
We should also remember
that there are going to be some responses from-
Sorry, Freeberg, last thing.
Tech stocks in the fucking toilet.
Because of the multiples?
No bueno for no cash flow growth stocks.
Everyone’s going to start buying yield when-
Nobody wants it.
Let’s explain this to the audience.
Why are you agreeing with Jamal?
I mean, once interest rates go up,
you’ll see that dividend yields will go up,
which means stock prices go down
because people will expect a higher return.
Because if I can buy treasury bonds
and make a few points of return on my money,
and I’m going to have to buy a stock,
I’m going to demand a few more points
of dividend yield on that stock.
And so the price for stocks will typically go down
to match the yield that you’re going to get
from these more risk-free investments.
To be more precise.
A stock is either a promissory note about cash today,
or effectively a promissory note about cash in the future.
The thing with tech stocks
is we tell everybody the same thing.
Your money’s going to come 30 years from now
because we’re going to be a monopoly by then.
And every dollar that I have today,
I’m going to reinvest into R&D and engineering.
And in an environment where interest rates are zero,
you’re happy to do it because you’re like,
well, great, these guys are investing
way better rates than zero,
which is what I get from my bank.
And so I want Facebook and Google and Amazon
and all these startups to be putting all this money
in the ground on my behalf.
But when interest rates start going up,
they say, no, hold on a second, I need more money upfront,
less money in the future
because the future becomes more uncertain.
And that’s the big trade-off for tech companies
where they get really pummeled.
Okay, well, is there a number in terms of the interest rate?
There’s a class of tech companies, right?
Sorry, like Microsoft, Oracle, Google,
where you are actually seeing an Apple,
you’re getting dividends and you’re getting share buybacks
where the cash is coming out of the business.
And those are the mature businesses
that also still happen to have growth attached to them.
And I don’t see how portfolios
are going to shed those assets.
You’re going to shed the more speculative,
hey, you know, we’re not yet at a point of maturity.
We’re still 20, 30 years out, whatever.
Yeah, the guys that are investing
and there’s no kind of line of sight to true cashflow
coming back to the shareholders.
But look, at the end of the day,
the point I was trying to make earlier
was that there is going to be a response, right?
So we’ve seen, remember when the pandemic kind of set in
and everyone started ordering from home,
Amazon rushed out and hired
100,000 local delivery drivers.
They bought all these trucks
and they built their own supply chain infrastructure
for last mile delivery to get products to people’s homes.
And we’re now seeing on the other side,
Walmart, Home Depot, Target, and other big retailers
integrating their supply chain to get product into stores.
And so they’re starting to buy trucks, hire people,
pay them significant wages to be drivers on staff for them,
rather than contracting to these third parties
that are saying, oh, we don’t have any inventory.
We don’t have any trucks.
We don’t have any drivers.
We can’t do anything for you now.
And so the response is, think about it.
You’re a product company, you’re Tesla.
Tesla just went out and did this massive deal in Caledonia
to source some mineral that they need to make batteries
or to make their cars.
I can’t remember exactly what it was.
You’re increasingly gonna see the businesses
that have a balance sheet step up
and actually start to integrate their supply chains
rather than have this-
Be full stack.
This disparate set of service providers,
each of which is only kind of,
is all typically operating at max capacity.
And then they can’t kind of respond
to these sorts of jolts to the system.
And so we’re gonna see a lot of investment,
I think, by businesses that make product
or deliver product to the consumer
as they try and integrate
the supply chain problem themselves.
And that may take some of the strain off the system
and some of this inflationary risk out of the equation.
We’ll see over the next couple of quarters.
But certainly in this last earnings report,
I saw some statistic,
a very large percentage of earnings reports
spoke directly about supply chain disruption
affecting the forecast for the business
and the ability for the business
to meet their forecast goals.
And that’s just hurting everyone.
Okay, so throwing to Sachs-
So they’re gonna have to do something about it
if they’re resourced to do it, right?
All right, so Sachs though,
there are some silver linings here.
Companies become more resilient.
They become more automated.
They build a full stack.
They build their own factories.
We’re seeing the Taiwanese semiconductor company
is doing a $7 billion project
to build a new factory in Japan
funded by the Japanese government.
So we’re seeing a lot of redundancy
and we’re also seeing the middle class grow.
If people are making 35 bucks an hour,
40 bucks an hour,
and they’re getting healthcare
and they’re starting to have overtime
and other concessions being made,
that builds the middle class.
It sounds like we’re solving some problems as well.
Dealing with this,
I guess what you call indecision.
Inflation is a good thing.
I know people think it’s a really bad, terrible thing.
There are certain kinds of inflation
that are really productive.
We have had to find a way to fight
the bad parts of technology.
Technology is great.
Nine out of 10 things, it’s amazing.
Efficiency, all these great characteristics
that it gives you,
but one crappy externality of technology
is that it’s deflationary.
You can do more with less
and that’s fundamentally not great for earnings.
It’s not great for labor participation.
It’s not great for all these things
that people are really upset about today.
It’s great for the individual company,
getting those gains.
I actually think it’s kind of like
it actually balances out the natural pace of technology,
which is like you have the natural ability
to just actually have cheaper, faster, better.
This inherent efficiency
that’s building up on one side of the ledger,
but then what’s great is on the other side of the ledger,
you actually have labor being able to balance it out.
And I think that that’s a really good thing
because they can demand more to do the rest of the work
that’s not covered by tech.
And I think that’s important.
What are your thoughts about this expanding middle class?
Isn’t it a great thing that people are saying,
I’ll stay home instead of making 12 bucks an hour.
It’s an unfair wage.
It’s not a livable wage.
And then all of these companies are saying,
you know what?
Okay, they folded so quick, the big companies.
They went to 18 to $35 an hour instantly.
They always had the money to pay more.
They just didn’t need to.
Increasing wages in real terms is a good thing.
I think you have to ask why the wages are going up.
Is it going up because of increased productivity,
which is a good thing,
or is it going up because of inflation?
If it’s going up because of inflation,
then the wage gains are somewhat illusory
because all the products that consumers want to buy
are also going up in price.
All we’ve done is sort of is devalue the dollar.
So we don’t know yet whether these,
but we do know that inflation is actually very high.
We don’t know exactly if these wage gains are permanent
or just a function of that.
But let’s go back to this inflation point for a second.
I think this is actually really important.
We’re at something like a 5.1% inflation rate.
It’s just about the highest since the late 70s, early 80s.
Now we have this threat of a supply chain crisis.
This is, you know, this is potentially-
No, we have a supply chain crisis.
It’s not a threat.
I mean, if people can’t sell cars, it’s a crisis.
Right, this is a recipe for stagflation 2.0.
Now, I think there’s an assumption
that if inflation persists,
the Fed will simply just fight it.
They’ll increase interest rates somewhat
and they’ll control it.
But I actually think that the degrees of action
that the Fed can take here might be more constrained
than people think.
I just want to flag.
So one of the primary sources I use for the national debt
is this website, fred.stlewisfed.org.
It’s a good website that has a lot of charts
by a branch of the Fed.
So they have this chart.
We’ve seen that federal debt as a percentage of GDP
is at sort of all time, peacetime highs.
You know, we’re now, we were at 100% for a few years
and now because of COVID, we just rocketed up over 120%.
We’re close to 140%.
Now, the argument by mostly liberal economists
that the debt didn’t matter
was because the debt service remained very low on this debt.
So we had a huge increase in debt,
but because interest rates were so low,
the debt service was still very, very small.
And I think, you know, they have a good piece
on this website about this as well
that I’ll just post here in the notes.
But I think, I don’t know if you guys remember
back to a pod we did in May,
where we talked about Stanley Druckenmiller
came out swinging against the Fed
and he warned about this very situation.
I just want to like, I want to just read this article
that we covered back, I think in May.
It feels like an eternity ago,
but do you remember when we just talked about this?
What Druckenmiller warned is that
if yields on the 10-year treasury
rise to the projected level of 4.9%,
which is simply the historical average,
the government spending would be close to 30% of GDP
each year, simply paying back interest expense
compared to 2% last year, unless it monetizes the debt,
which experts think is unlikely
and Druckenmiller believes would have
horrible implications for U.S. dollar.
So in other words, we now have this enormous debt.
The only reason why debt service payments
aren’t crowding out the entire federal budget
is because we’ve had interest rates
at historically abnormal lows, zeros basically.
So how exactly is the Fed going to fight inflation?
If they jack up interest rates to where they should be,
say 4.9%, then the entire federal budget
will be going to debt service.
They’re actually working against themselves, right?
It’s like you’re the bank
and taking the loan at the same time.
This is like somebody who gets a variable interest mortgage
and they get five, 10 years into their mortgage
and then all of a sudden they go from interest only
and some low interest rate
and then they have to pay market rate
and they realize they can’t afford the home.
We might not be able to afford the budget
we’re putting out there is what you’re saying, Sax.
Well, I’m saying the Fed may not have the tools,
all the tools they want to fight inflation if it comes back.
Or I mean, it’s gonna be politically very unpopular.
I mean, can you imagine the pressure the Fed will be under
not to raise rates if it means
that all of these discretionary programs
basically have to be cut,
that we have an austerity mode in the federal budget?
How are we gonna pay for all this debt service?
And then the first thing they’re gonna think about is,
hey, maybe we should cut military spending
since it’s the largest at the time
when China is doing sorties in and around Taiwan
and the South China Sea
and we’ve got six navies doing coordinated sailing there,
which I think is a adjacent issue here.
Historically, historically great powers
that want to remain great
don’t owe over 100% of their economy,
especially when a lot of it’s held by foreign powers.
I mean, that is a situation that makes us fragile,
not anti-fragile, right?
Because if we hit a crisis,
if there is some unforeseen military conflict,
what glass do we break now in case of emergency?
We’ve already spent, we’re already at,
we’re in peacetime and we have wartime levels of debt.
And now inflation is making a return
and the Fed is gonna have to make some really tough choices
about whether to control inflation
and essentially impose austerity on government spending
or whether they monetize the debt,
which will lead to a runaway depreciation of the dollar.
Neither one of those things is a good situation.
How would the Fed impose austerity?
Well, they can’t, but again,
if debt service rises to 30% of the federal budget,
where’s that money gonna come from?
You have to raise taxes and cut spending.
You got to do both.
Which is why, and I think this is Joe Manchin’s point.
And if you’ve been listening to Joe Manchin
talk about the current reconciliation bill
and he says, look, 3.5 trillion doesn’t make sense.
We don’t know what situation
we’re gonna confront in the future.
We don’t know what crises are coming.
We’re gonna reduce our ability
to tackle all those future problems
by overspending right now.
That’s been Joe Manchin’s argument.
And looking at this risk of stagflation
in the forms of the supply chain shortage
and this 5.1% interest rate number,
you’d have to say that if we want to preserve
any flexibility next year to raise interest rates,
you better be really careful
about how much debt you incur now.
Jamal, agree, disagree?
Yeah, look, when Druk said that the 10-year break-even
was sort of at a five-year high at the time,
we’re back there now.
Look, I’m just gonna, I said this on CNBC,
I’ll just say it again.
I think it’s coming.
I don’t think it’s a short-term blip.
And I think that we are in a period
that will resemble the late 70s.
And I think that you kind of want to be risk-off
and not own risk assets.
And by the way, it is hard, okay?
Because we are all, all of us, all four of us,
both risk, we’re both risk-on,
and all we own are risk assets that are,
it’s one thing to say, let’s take risk,
but you could take risk in lower of all things.
This is like taking risk in the most risky thing.
That’s what we all do.
And at a time when people have run up the valuations
of private market companies to a level
that just nobody can understand.
I mean, look, I think you got a year to 18 months
to kind of clean this stuff up,
meaning like as market participants,
we can shuck and jive and get everything
into a decent place, but it’s coming.
And I hope I’m wrong,
but I think we’ll look back on this
and we’ll say we said it probably eight to 12 months
before it really reared its ugly head, but it’s coming.
Freeberg, any thoughts on what’s happening in Taiwan
and what, you know, even a modest conflict
there would do to markets,
given how to Sax’s point,
this is the opposite of anti-fragile.
We are in like full fragility here.
I mean, this is like, you know,
a tray full of champagne glasses on a boat in rough seas.
At any point we could trip and everything comes
Does it feel like that to you, Freeberg,
or do you feel like we’re going to be able to navigate this?
I mean, I don’t know about Taiwan,
but I think we’re just going to keep inflating our way
out of this mess.
Remember, like that’s what we did last year
and it’s what we’ll do again this year.
The biggest losers in that equation are the middle class
because, you know, the middle class actually owns assets
that are now going to be worth less.
Folks who are not in the middle class
that are below the middle class don’t own assets,
so it doesn’t really affect them.
They just make higher wages, but stuff costs more,
so they’ll be fine.
And then, you know, wealthy individuals
will end up getting taxed away to fund some of this.
And I think that’s the inevitable kind of way
that the equation balances.
Right, but I mean, think about how much tax rates
are about to go up right now in this reconciliation bill.
We haven’t even gotten to like any of these crises.
By the way, we don’t know for sure if they’re going to happen.
I think we could describe these things
as storm clouds right now that are very much on the horizon.
Multiple storm clouds, right?
Sort of like they’re converging.
Right, and if they do materialize in the way
that we’re talking about, what weapons will we have left
in order to fight them?
What weapons of fiscal policy?
What weapons of monetary policy?
We’re already going to have taxes at an all-time high.
Yeah, we’re going to have taxes.
No, we’re going to print money
and we’re going to pay ourselves.
We’re going to go to the central bank.
It’s what you said, we’re going to monetize our debt.
And taxes will go up.
That is a disaster.
Remember, the top marginal tax rate was what?
70, 80% in the 60s and 70s?
I mean, that’s likely where we’re going to go back to.
Well, I think we’re already going to be back there
as a result of the reconciliation.
The spending we’ve already done, yeah.
Right, so we’ve already broken the glass
in case of emergency.
We’ve already done.
You’re going to see some of these wealth taxes
get chased down.
You’re going to see the top marginal tax rate
go up 70, 80%.
I think that’s the way the equation balances.
It’s not like the world’s going to end.
We’re going to solve it by taking assets away from some
and we’re going to inflate all assets.
That sounds pretty bad.
Yeah, I mean, 78, if you make a tax of 78%,
it’s not going to affect most people.
That’s not a solution, Freeberg.
It will affect most people.
It will affect most people,
even though they don’t think it will
because it’s going to affect the quality of our economy.
I’m just trying to predict what’s going to happen, Sax.
I’m not saying this is the solution to our problem.
I mean, I think the solution to our problem is technology,
but the question is, does that come to market fast enough?
Say more about that.
I feel like we need a deflationary set of technologies
that can mitigate all of these effects, right?
So software, automation, self-driving trucks,
things that take the labor force,
because people don’t want to work low-income jobs, factually.
And now that there’s a world,
now that there’s, in America,
now that there’s a world where people don’t have,
where people have other options
because other jobs have been created
because we’ve pumped so much money
into these other industries,
we’re seeing people migrate away from low-income jobs.
Driving a truck for $10 an hour
or working at McDonald’s for $8 an hour.
And so to fill that gap and avoid the economic collapse
that will occur in those sectors of the economy,
you need to automate and you need to find solutions
that can replace the labor
with some alternative technology solution
that actually allows the product to be fulfilled
to the consumers that demand it.
Or you’re going to see rates go up.
Like you’re going to be paying $12 for a hamburger
because you’re going to have to pay everyone $25
for working at McDonald’s.
Would an easy, or Chamath or Sax, either you can take it.
I’m sure you’re both going to have opinions here,
but we’ve been battling over immigration
and nobody even seems to understand
how many people are coming into the country
or under what system.
Should we not tie the number of jobs available,
you know, over the trailing X number of months,
to how many people we’re bringing to the country?
And couldn’t we solve this by allowing 5 million people,
a million people, whatever it is,
per year, a half million people
in to take those low-income jobs
and utilize that group of people to, you know,
get businesses back on track?
I think it’s too convenient to say
that these are all low-income jobs.
I don’t think that’s necessarily true.
And I think that it then starts to introduce
a whole bunch of other constraints to the system.
These are folks that then need healthcare.
These are folks that need childcare.
These are folks that need, you know,
that they are also a tax on resources as well, right?
We are all taxed on the natural resources
and the infrastructure of our country.
And so, you know,
I don’t think that that’s the solution necessarily
to that specific problem.
So what if the jobs that were,
the people who are coming in-
We have enough people here to do the work.
But they won’t do it.
What we don’t have is the market clearing price
for that work to get done.
And so what I’m just trying to say is
I think that the simpler and more obvious solution
is to raise salaries until you get people
to fill these jobs.
And I think that that’s happening.
And so I do think that over the next year or two or three,
you’re gonna see, you know,
labor rates basically go back up
and employment rates go back down
and salaries go back up and inflation go back up.
All of these things are gonna happen together.
That’s the solution.
I think immigration is a solution
to a completely different problem.
Which is that we’re not competitive.
Oh, so you’re talking about bringing an elite,
highly educated technical people.
Look, I really think that running a country
should really be like running a sports team.
You know, and-
Recruit the best talent, period.
And you should really be recruiting the best talent.
You should be looking at game film.
You should be coming up with plays.
You should be running and testing those plays.
You know, you should have different plays
that you run in the first quarter
versus the fourth quarter.
Different plays when you’re on the goal line.
You know, and I think that like,
when you look at professional sports,
one thing is that they don’t see color,
gender, sexual orientation.
They see ability to be performant.
At a task and statistical excellence.
And then they go seek statistical excellence.
And if you translate that to a country,
my simple rubric on immigration is every year,
there’s a draft.
And America is the free place
every free agent wants to go.
We’re the Yankees.
Yeah, we’re the Warriors.
I fuck the Yankees.
We’re like the Warriors.
The Yankees are trash.
I’m just going with who historically has won the most.
We’re the New England Patriots.
Okay, we’re the Chicago Bulls.
We’re the, you know,
we are the team that everybody would want to play for.
It’s up to us to have a good GM
and a good president of the team
and a good front office
that just picks off all these smart geniuses.
This should be,
I think your great point here, Chamath,
is you’re saying let’s take the emotion
out of this immigration
and let’s make it a point-based system,
which by the way,
the point-based system is what Australia, New Zealand,
the UK, Canada all do.
And Americans don’t even know
what the point-based system is.
Sax, what are your views
as somebody who I’ve heard
leans a little bit to the right
on opening up immigration
or maybe sweeping all this amazing talent globally
who have the highest statistics?
I like Chamath’s sports team analogy.
We want to get the biggest stars
from all over the world to come to the US.
I mean, I think that makes sense.
I think, you know,
this so-called immigration issue
gets so confused with so many different things.
I mean, first of all,
and then there’s border security, right?
And immigration or just having a border period.
And so many people think that
if you’re pro-immigration,
you basically can’t have a border.
I mean, that makes no sense.
You know, we need to have a border
and we need to have actual,
like have an actual immigration policy.
It shouldn’t just be like,
okay, you make it across.
I like what you’re saying.
If you were president
or if you’re a guy Ron DeSantis becomes president,
what should his,
what will you tell Ron
since you’re holding a fundraiser?
I like what you’re saying with the point system,
having it be skills-based.
I mean, that makes sense, right?
Would the Republicans do that?
They’ve been so emotionally tied to this issue
because of Trump.
Can they actually,
tie themselves to something performance-based
and be not emotional about it?
Can they change their position?
I think Trump actually did endorse
like a more skills-based immigration system.
I think that,
and I don’t know that Republicans
are the ones being emotional about it.
I mean, the people who are here-
Well, no, both sides are clearly
super emotional about it.
Yeah, I mean, the side that I think is like insane
are the people who don’t think we need a border.
I mean, you clearly have to have a border.
And even Obama came out recently
and made a statement that you have to have a border
because the progressive left had gone so far.
It’s almost like they wanted to be,
whatever Trump was doing,
they wanted to do the opposite of.
You know, it’s like pull the 180.
And so it’s almost like the Biden administration policy
became to stop doing whatever it was that Trump was doing,
including finishing the wall.
I don’t really understand why that was like such a problem.
Yeah, building a wall also seemed like ridiculous.
We could just put up fences.
It’s just one piece.
It’s just one piece of the solution,
but to stop it in mid construction.
Let me ask you a question.
It broke this week that you’re hosting
a fundraiser for Ron DeSantis.
You got a little bit of blowback from that,
from the woke, you know, in the San Francisco crowd.
But in terms of your influence with somebody like that,
do you think you can actually influence them
to get Ron DeSantis to listen to this episode
and maybe talk about the point based system
and change the framing of that?
Do you think you have enough influence to do that?
I don’t know.
I mean, I don’t know exactly what his position
on immigration is.
That’s not like the set of issues
that I respect him for.
I mean, the reason why I wanted to support DeSantis
is that he was the first governor
to end these insane lockdowns.
And I mean, this was back in,
it should have been obvious to everybody by May of 2020
that the lockdowns didn’t work.
And he was the first one to roll them back.
And Florida did very well,
especially considering that they have
so many old people in Florida.
So, you know, on the whole,
not what I have done everything exactly the way he did it.
No, you know, but-
Nobody did it perfect.
But is he a Trump supporter and a Trump acolyte,
or is he distancing himself from Trump?
I think, honestly, I think that like point of view
is coming from the point of view of somebody
who’s not in the Republican Party.
It doesn’t have to deal with the dynamics
of winning support in the Republican Party.
No, no, no, that’s what I’m saying.
Yeah, so you have to basically toe the line
with Trump to get the nomination.
I don’t see it as toeing the line.
I just think, look, I think he’s his own person.
He’s the governor of Florida.
He’s setting policy over there.
He can be supported or not
based on what he’s doing in Florida.
I think like Trump is the issue
that everybody on the other side will want to talk about,
but I don’t think it’s relevant to what he’s doing.
I don’t think it’s relevant to what he’s doing.
But wait, isn’t there a civil war
inside of the Republican Party over this?
And should we support Trump?
I wouldn’t say it’s a civil war,
but there definitely is some conflict.
And yeah, I mean, look-
How does it resolve?
I hope it resolves in,
oh, look, I think elections are always about the future.
I don’t think people want to relitigate the past.
And I think that the Republican Party would be wise,
I think, to find a candidate of the future
and not try to rehash or relitigate the past.
Another good reason for me to support DeSantis,
I think he is a future-looking, future-oriented candidate.
I do think that, look, I’ll say it,
the stuff I hear Trump doing now in these speeches
where he’s relitigating what happened last year
and attacking other Republicans like McConnell
because they failed his personal loyalty test,
it’s a little bit like what he did, frankly,
in Georgia with the runoffs,
where he sowed so much chaos
that the Republicans lost a seat, the Perdue seat,
that they had won on election night
and then they had that runoff.
And you have to say that a huge part of the reason for that
was Trump attacking Rafflesberger and all the Georgia GOP
because he thought they were insufficiently loyal to him.
And then you had the tape come out of,
can you just find the 11,000 votes?
I mean, I think voters in Georgia
punished the Republican Party for that
by giving that seat to the Democrats.
That margin created the Democratic majority,
which will now give us probably an incremental
four to six trillion of spending and tax increases
that we wouldn’t otherwise have had.
So I do think these elections are very important
and it would behoove the Republicans.
Look, I’m not like one of these never-Trumper people who,
I’m just not obsessed with Trump, period.
I just think the Republicans need to run
a future-looking candidate,
not a backwards-looking candidate in 2024.
And I think DeSantis could be that guy.
It’s very, very early to say.
I mean, the first thing he has to do is run for governor,
for re-election, which I think is next year, is 2022.
So I will support him for that.
Did you guys, anybody read the Ted Sarandos memo?
Yeah, this is great.
They should definitely jump into this.
We talked about the Chappelle performance,
Sachs and Freeberg.
You guys watched it?
You hadn’t seen it, did you watch it?
Yeah, did you watch it?
Oh God, what nerd.
You haven’t watched it yet?
Oh my God.
You guys are culturally bankrupt.
What were you guys doing this week?
Like fucking beakers and like, you know,
Sachs, you were just like-
Were you like in like some laboratory
doing like Sachs testing?
Yeah, they’re beakers.
They were doing their beakers.
I haven’t watched it yet,
but I don’t need to watch it to know I support it.
Ah, he’s just, yeah, he doesn’t have to click on the link.
All right, so just-
There’s almost nothing Chappelle could say
to make me want to cancel him.
I mean, and by the way, I’ve seen a lot of Chappelle
and I love Chappelle.
So I think I understand the gist of what he was doing,
but I do need to see it still.
But look, he should not be canceled, it’s ridiculous.
I don’t think he is.
He’s going to survive.
Well, this goes beyond this.
Let me read you from it.
So everybody knows the name of the special he did
was The Closer.
It was released on October 5th.
A lot of outcry from GLAAD and advocacy groups
and actually people inside of Netflix.
There’s been some resignations.
There have been some people who contribute content
to Netflix who are now saying
they’ll not work with the company.
And it’s really interesting.
Ted Sorrento sent a memo to the entire company on Monday
and this is the second one he sent.
And he says,
we know that a number of you have been left angry,
disappointed and hurt by our decision
to put Dave Chappelle’s latest special on Netflix.
Very interesting opening.
He’s addressing their feelings.
This is a masterclass in a memo
because in that first part, he just addresses,
I understand you feel that way.
With The Closer, we understand that the concern
is not about offensive to some content,
but titles which could increase real world harm.
So now he’s framing their argument
as it’s not because it’s offensive,
it’s because of real world harm.
You’ve brought this up before Saks,
the real world harm concept with Apple and Antonio.
While some employees disagree,
we have a strong belief that content on screen
does not directly translate into real world harm.
It’s not exactly true.
We’ll get into that.
The strongest evidence to support this
is that violence on screens has grown hugely
over the last 30 years,
especially with first party shooter games.
And yet violent crime has fallen significantly
in many countries.
And so he goes above and beyond
just talking about offensive material.
Adults can watch violence, assault and abuse,
or enjoy shocking standup comedy
without it causing them to harm others.
Standup comedians often expose issues that are uncomfortable
because the art by nature is highly provocative.
As a leadership team, we do not believe
that The Closer is intended to incite hatred or violence
against anyone per our sensitive content guidelines.
So basically he says,
if you don’t like it, change the channel.
If you’re a customer, you can cancel your subscription.
Or if you work here and you don’t like it,
you don’t need to work here.
But is this the end of cancel culture?
This combined with Brian Armstrong’s positioning?
Sax, this is your-
I don’t think it’s the end of it for the simple reason.
Let’s assume that this comic
had not signed a $60 million deal with Netflix.
Let’s say he had signed a $60,000 deal, okay?
Or 6 million, yeah.
Or 6 million or whatever.
And he didn’t have the legions of fans
that Dave Chappelle had.
Do you think that Sarandos would be making
the same decision?
I mean, I think that special by a Netflix comedy
by Dave Smith would be swept under the rug right now.
That would never see the light of day.
I think the same thing was true
with Joe Rogan and Spotify, right?
I mean, Spotify made a $60 million deal with Rogan.
Oh, 100 million.
The employees all protested
and Spotify stood tall for Rogan.
But they had every economic incentive to do so.
I don’t completely trust these companies
that if it wasn’t massively in their bottom line interest,
that they would have stood up for free speech.
I suspect that if it was, you know.
They would not have.
They would not have.
I think we all kind of know that.
He said in the email,
Sticks and Stones is one of the most watched,
you know, pieces of content we have.
And this, The Closer, was like top four or five in America
over like the last few weeks.
So there’s a huge economic incentive.
And Reed Hastings said the same thing
when he posted the other co-CEO
into a group forum, which said,
listen, our job is to please our customers.
And all this data says is that we’ve pleased our customer.
And I think in the case of-
That is pretty-
That’s what they said.
To me, that’s him putting his foot down
and saying we’re going to make the content we want to make.
I don’t think it’s a principle.
I don’t think it’s a super,
look, I don’t want to look past it
because I think that it’s so rare
to get a memo like Sarandos wrote
where he’s defending artistic freedom
or freedom of speech or what have you.
I mean, it’s so rare to ever see that
that I don’t want to gainsay it too much.
But I also do believe that this sort of special treatment
is really reserved for the artists, the creators,
like a Chappelle, like a Rogan.
They’re basically too big to cancel.
I mean, these companies have spent too much money
on their programs to just summarily cancel them.
They also, again, like I said,
have legions of fans who would rise up
and protest if they were canceled.
But I don’t think these companies
would make the same decision for the mid-level creator.
And in a sense, Rogan and Chappelle,
they’re post-economic, right?
I mean, they’ve made so much money
that they’re free to do what they want
and they’ve got a big enough audience
to protect themselves from these companies.
But it’s the little creator who’s still on their way up
who can never take the kinds of creative risks
that Chappelle is taking or that Rogan’s taking.
Well, they can take it.
They just can’t do it on Netflix.
The tone of this, to me, sounded like a manifesto
and the end of the discussion from dad.
Like, we’re doing this.
If you don’t like it, get off the ship.
But this is the way the ship is going.
That’s the way I read it.
And I think Spotify did a similar thing
with Joe Rogan, to your point,
which was, hey, listen, there was some content out there
from like Alex Jones or some people
who are just conspiracy theorists.
They took down those episodes.
And Joe Rogan was like, I don’t care, I got paid.
But yeah, it does feel to me like this is a tipping point
when you put Brian Armstrong, Joe Rogan,
and Chappelle together that corporations are gonna say,
you know what, the mob is fine.
You can have your opinion,
but your opinion stops where we have to run a business.
Freeberg, what are your thoughts?
I think Netflix has a appreciation for artistry,
certainly evident by the money they’ve spent
and the product they’ve put out.
And I think good artists and good artistry
can be provocative.
It’s designed to make you change your opinion,
look at things differently, think about things differently
and be challenged in the norms of your everyday life.
And I think that’s important in art in all forms.
And that means seeing and being exposed to
and being engaged by things
that you don’t normally get exposed to and engaged by.
And I think that’s what Chappelle is fantastic at.
And I think that’s what other great art is great at.
And I think that as long as Netflix maintains that ethos,
that artistry does that,
and the good thing is people appreciate it.
And they appreciate that form
and they appreciate being challenged in that way.
And I think that as a result,
the market will, as Reed Hastings identified,
continue to demand it.
And as much as some people might be offended,
it’s the fact that it is offensive
that I think makes it good.
So let me ask you-
And I think that they appreciate that.
Hold on, let me clarify.
Michael, I hope you’re right about what this means.
I mean, to me, let me be really clear.
I mean, I hope it goes down
exactly the way that you’re saying,
because that is what I want to believe is happening.
I’m a little bit skeptical
that this is a little bit more of a bottom line motive
because they got so much money at stake
that they can’t afford to cancel Chappelle.
But I hope you’re right.
I hope you’re right that it’s a statement of principle,
and they will apply that principle to lesser known artists
who can’t protect themselves as much.
And, you know, hopefully this is kind of like,
you know, what it reminds me of is the Jon Stewart lab,
the Wuhan lab leak moment,
where you had Jon Stewart go on Colbert’s show.
And he, all of a sudden, he made it okay
to talk about the lab leak theory.
It was like, you couldn’t talk about it before.
He cracked the Overton window open.
And so hopefully Chappelle will do that
for this like woke cancellation mob
is to finally get everybody to realize,
oh, like we can stand up to this.
Chamath is the Overton window on a go forward basis.
Do you see it closing more,
staying where it is, or perhaps even opening?
There’s a really great philosopher.
This is my, maybe my one and only
grand tribute to Peter Thiel,
but he is a huge supporter
of a philosopher named Rene Girard.
And I agree with a lot of that.
A lot of Rene Girard’s philosophies.
And basically it’s called mimetic theory.
And the idea is you’re born without preferences,
and then you kind of just copy what’s around you.
And so what the other person wants is what you want.
And that’s what ultimately leads to a lot of conflict.
And the only way to resolve conflict
is with a huge grand sacrifice of some kind, okay?
And if you think about it here,
if you’re going to really put, you know, cancel culture,
if you’re gonna kill it,
there needs to be some just massive escalation
and conflict around this idea
that allows us to resolve it in one way or the other,
in one direction or the other.
And I don’t think this is it.
I think it’s not big enough, quite honestly.
I think it’s a little bit sort of like, you know,
there’s folks like us that love comedy,
and we’re willing to keep it in a very strict box,
which is let people say what they’re gonna say,
be shocked with it, and don’t take it onto yourself,
and go and reflect it into the world.
It’s entertainment, and you can, you know,
it’s like, I choose not to watch violent stuff,
because I don’t like it.
I find it very offensive.
Or, you know, I don’t play first person shooters.
I find it really unsettling.
You know, Grand Theft Auto, I found it really outrageous.
And other people will feel like that about Chappelle.
My whole thing is we should all be allowed
to make those judgments,
because I think we’re all still pretty rational people
at the end of the day,
I think, in the normal world.
But this isn’t the thing that’s gonna get
this issue to be resolved.
So I don’t know how it comes.
There needs to be some huge escalation around this thing.
I suspect what happens is it actually
just dissipates and goes away.
And the reason is because everybody
who’s much younger than us has such a huge
digital footprint that they’ve created
through their whole lives.
They’re at risk.
There is so much shit that’s out there.
Oh, God, yes.
That they just have no choice
but to let everybody else off the hook.
We are in a very different situation
because we were doing some fucking shady stuff,
always on the down low, always hidden.
Whoa, easy there.
But that’s how it was.
Our childhoods were largely anonymous.
You would roll deep and you would just,
you would pretend, you would not, you know.
And now the culture is very different.
And I think with that comes a lot of acceptance.
Every, you know, every kid at some point
may or may not be on Tinder, Bumble, Ria,
you know, Grindr, whatever.
So there’s going to be a body of that content that’s out.
Every kid will have said something crazy,
you know, on TikTok.
And all of this stuff will be there.
And so you’ll have a choice,
which is if you’re going to hold me accountable,
I’m going to hold you accountable.
And so it’s mutually assured destruction.
And I think that’s what causes
cancel culture to go away in time.
It’s the last vestige of very guilty people
of our generation.
What do you think, Freeberg?
Is the Overton window opening, closing,
or about the same over the next year?
What Timoth is saying is right.
I think I’ve referred to this book
called The Light of Other Days before when we talked.
I think so, right?
The book is like all about this notion
of all information is available to everyone everywhere
and societal norms completely change.
People no longer find things offensive
and they no longer,
and everyone basically shifts to a mode
of much more kind of open dialogue
because, you know, keeping things behind closed doors
and then positioning one person against the other
completely changes when you can see everyone’s cards
all the time.
And so I think, yeah, generally we’re headed that way.
I don’t think we’re going to,
information wants to be free.
More information is being generated
about each of us all the time.
I don’t think that we’re headed in the opposite direction
kind of back to a Victorian era.
I think we’re going in the other way.
So there’s going to be blips and starts
that’ll kind of be setbacks on that general trajectory.
So yeah, I do think it’s a moment, you know,
it’s a moment in time right now where this is happening.
I mean, Saxon,
if you look at the two examples we’ve discussed,
Brian Armstrong and Coinbase,
that was about essentially Black Lives Matters
and talking about social justice at work.
And this one is about trans and trans rights.
And essentially, I don’t want to say poking fun at
or, you know, discussing,
I mean, he basically says in it that he’s team Terp.
If you were to take two organizations
that standing up against
would be the most challenging and difficult,
I think those are the top two.
I guess so.
That’s why I think this is the most telling
is that you have two different organizations saying,
hey, we’re going to put our foot down.
Just for background, Netflix had a very strange,
I didn’t see the actual film,
so I won’t make judgment on it,
but it was a very strange trailer for a film called Cuties,
which was really over-sexualizing young girls,
like eight, nine, 10-year-old girls.
And they didn’t take it down in the United States, Netflix,
but they did take it down-
It was in France, it was in France.
It was a French movie.
Yeah, it was a French movie.
And they have a different view of kids and sexuality.
And yeah, I think people found it a little dark
here in the United States,
but they survived that one as well,
or they weathered that one as well.
So I think what people are finding is
if you put your foot down at a certain point-
I think what Saksis says is right,
these guys have realized that
if we have this very specific message
around artistic freedom and we never violate it,
because that’s one of those things where
if you take that hill, you have to be there forever, right?
You can’t have asterisks around that idea.
But by doing that, they basically dominate
the content production game in Hollywood,
which then allows them to field the most content
at the cheapest average price,
which then makes churn less and customer acquisition higher.
And they’re already the largest media company in the world,
and they’re only going to get bigger.
And Netflix has, what, 200 million subscribers?
They’re going to get to a billion subscribers.
It’s just inevitable.
And so for them, I do think it’s a very rational
business position to take,
which is that I have to appeal to a billion people
over the next seven or eight years.
You don’t have to watch everything on Netflix.
You do not have to listen to every album.
Netflix is a fucking mess.
I mean, if they should spend 10 minutes
and improve the UI so you can actually find something,
my God, it’s so bad.
And, you know, he basically, Sarandos,
made the point that, you know,
along with Chappelle’s show,
they’re funding a ton of content by people of color,
probably more than anybody, and trans people.
It’s a big focus of what they’re doing at Netflix.
And it’s, you know, it’s essentially,
to Sax’s point, more speech is better than less.
All right, do we want to go tether?
FDA, chaos, or questions?
Why don’t you take,
why don’t you do your reverse victory lap?
Because after all your shit copy-
It’s not a victory lap for me, Bob.
Bro, it was the exact opposite.
It’s a fraud.
It is not a fraud.
It’s a fucking fraud.
Can you please stop saying that?
Apparently the CFTC went in, did the work,
and is actually now refuting
what you thought was the case, Jason.
So why don’t you just own that?
How about I read you the quote?
From at least June 1st, 2016 to February 25th, 2019,
tether misrepresented to customers and the market
that tether maintains sufficient US dollar reserves
to back every USDT in circulation
with the equivalent amount
of corresponding fiat currency held by tether
and safely deposited in tether bank accounts.
In other words, they told everybody they were one for one.
They were not.
They lied to the public.
What were they, Jason?
And that’s why they’re getting a $41 million fine.
That’s why they’re banned from New York.
And that’s why they’re banned from trading in Canada.
I think, and they’re supposedly a Department of Justice.
These guys are shady as F.
AF, shady AF.
Mark, do you have an economic interest in tether?
In crypto, he does.
No, no, no.
How can anyone have an economic interest in tether?
All it is is a one-for-one tokenized dollar.
Well, no, it’s not.
That’s what they claim it is, but it’s not.
You’re right that it should be.
And we need an audit to establish that it is.
And they won’t audit.
They’ll do an attestation.
And when they did their attestation,
all they have to do is show a document
that says there’s money in an account.
They don’t have to show how long that’s been in the account.
This certainly feels like a security to me.
And I would think the SEC should get involved
in regulating this.
Stable coins are the number one thing
on Gensler and the SEC’s mind right now.
Yeah, I mean, they make a claim
of a secured interest in something,
unlike a lot of other crypto.
This is like the easiest part of crypto.
This is the easiest part of crypto to regulate.
Why is it easy?
Just look at a bank account.
You audit it, you’re done.
It’s a tokenized dollar, that’s it.
It is not, actually, I’m not even sure it’s a security.
It basically is a digital representation
of a dollar that should be sitting
in a bank account somewhere.
It’s a money market fund.
Yeah, it’s a money market fund.
But money markets are securities
and they’re regulated as securities.
Okay, fine, but my point is,
there are complicated securities
and then there’s securities that aren’t complicated.
This is definitely the least complicated.
The least complicated, that this company
only has, to their own attestations,
like 6%, 3% to 6% in cash in a bank account
and the rest is in highly volatile corporate paper.
Here’s the point that I was trying to make
to you in the group chat.
When a company who’s got billions and billions
and billions of dollars of some stable coin,
or something that you think is zero, okay?
It’s a multi, multi-billion dollar market.
Tens of billions.
Oh, sorry, tens of billions.
They have 70 billion in tether out there.
And could you imagine if they,
let’s just say there was 70 billion of tether
and one billion of securities?
That would be a fraud of gargantuan proportions, right?
It might not be that far off.
If they siphoned the money out for their own use,
that would be a fraud.
Yeah, we’d be beyond talking about fines.
What I found comical, Jason, is your claims
make it seem like Bernie Madoff,
Enron-level corruption craziness.
And the fine was 42 million, which is like,
who fucking cares, 42 million?
And it was between them and another firm.
So either the CFTC completely got the fine wrong
and they missed a zero or two zeros,
or this was not nearly as big as you thought it was.
I’m shocked that Jaycock got overly excited
about some perceived hoax.
Here we go, another hoax.
You are a conspiracy theorist, Jaycock.
I’m not a conspiracy theorist.
I was right about Theranos.
Yeah, Jason didn’t fully understand something
and got very emotional about it.
Wow, all right, that’s it.
I’m off the, that’s it.
Here’s the best case scenario
for making sense of J. Cal’s points,
which is it’s possible that Tether,
the company behind Tether, has all the money.
They’ve just not chosen to keep it in dollar reserves.
And so they’ve put it in corporate bonds
and a whole mishmash of different things.
To get the float.
To get the float, to make more money,
so they’re sold it. Maybe they were
trying to merge it.
I don’t, my guess is that Tether is solvent.
I don’t think it’s, it lacks solvency,
but I personally would feel better about any stable coin
if it was 100% dollar backed.
I think it should be.
Which is what Jeremy Lair is doing at USDC and Circle.
I had him on the pod this week.
I hope they bought the GitLab IPO.
Well, I mean, the issue here is
they also co-mingled funds,
which is what got Foltzholtz in trouble.
The user’s accounts with their money in it
was mixed with the operating capital.
So they were using the deposits to operate the business,
which is the biggest no-no.
They were co-mingling the funds
that people thought were backed.
And Bitfinex and Tether were the same company.
That’s why they both got the fines at the same time.
They’ve also been banned from doing any,
having any customers in New York,
and they’ve been banned in Canada.
And there’s apparently a DOJ wire for it.
So I think this is the beginning of the end,
not the end of the beginning.
That’s my personal belief.
I was just wanting to get your reaction
to what seemed like a really pathetic fine
for what could be a $70 billion fraud.
I mean, Facebook got a series of speeding tickets too.
I mean, I think that’s,
I mean, that’s a big issue for our government
is that the scale of these companies-
Bro, they paid $5 billion.
They paid like $5 billion or something, right?
Yeah, and they’re a trillion dollar company.
I mean, it’s nothing.
It’s a speeding ticket.
I understand, but 5 billion’s a big number.
That’s a big number.
Not in relation to their market cap
and how much cash they throw off every year.
I mean, that’s a tax payment.
It’s a quarterly tax payment.
For you, Tramont, not for us.
Or maybe for Sachs.
He’s doing pretty well too.
All right, do we want,
we promised we’d do some questions.
Should we do a couple of questions?
I mean, we could also talk about the FDA.
Oh my God, the FDA.
My gosh, Freeberg, do you want to lead this?
Freeberg, you want to tell us about the chaos at the FDA?
Well, I don’t think it’s chaotic
like you guys think it is.
I’ll make that a counter-
Why don’t you make your chaos point first
and then I’ll make yours.
That’s not my point.
It’s just kind of what people believe in.
Yeah, people are perceiving this.
So like, you know,
there’ve been a couple of these changes in recommendations.
Now, all of these recommendations that,
and you know, these statements and approvals
that have come out of the FDA
are predicated on these independent advisory panels
that are put together to look at research data,
assess the research data,
and make a recommendation
on what they think is appropriate.
So we saw this happen with the Pfizer booster shot
a few weeks ago,
where initially the advisory panel,
which again is made up of independent doctors
and scientists who generally don’t have
any sort of economic interest in the outcome here.
They voted 16 to two against everyone getting a booster shot
and then they voted 18 to zero
in favor of everyone 65 and over
and those at risk of getting a booster shot.
And then recently there was, you know,
similar sort of consternation around the Moderna
and they ended up looking at data
that indicated that maybe a half dose,
which is 50 micrograms instead of 100 micrograms
would have a reasonable amount of efficacy
relative to the side effect risk for people over 65
and therefore they made a recommendation
to approve that as a booster,
which the FDA is now approving.
And so again, the way this process is run,
and I think it’s a good process,
is independent advisors of doctors
and scientists come together.
And the one that recently came together
was around this generalized use of aspirin
as a heart attack deterrent,
because it thins the blood
and limits the risk of people getting heart attacks.
But it turns out that such a large percentage
of the population or a large enough percentage
of the population were having bleeding issues
where your stomach bleeds.
I don’t know if you guys have this,
but you know, you take ibuprofen or NSAIDs,
your stomach can bleed.
That that was causing more of a problem for people
than they were seeing in the data
in terms of a reduction in heart attack effects
for people that were not highly at risk.
And so they revised the recommendation and said,
hey, let’s give people that are only at risk
and over a certain age aspirin,
not just like give it to everyone over 40 or 50.
And so it took in account new data.
And I think this is an important point.
Science is messy, right?
By definition, science is about gathering data,
forming a hypothesis, testing again,
iterating, restating your hypothesis.
And it’s designed to be circular.
It’s designed to be a learning system,
not designed to be a system that defines absolute truth
and absolute fact.
And it’s good to see the FDA doing this work.
And it’s good to see scientists reviewing new data
and changing their recommendations.
And we’ve seen this in health,
we’ve seen this in the food system
and the USDA changing their diet guidelines
when people used to be told, don’t eat dietary cholesterol,
it turns out saturated fat
is what causes cholesterol in your blood.
So there were a lot of changes that kind of emerged
as new data was gathered.
Remember when they told us to eat a lot of carbs?
Remember the all carb diets?
And then they learned
and they made a lot of change in those days.
Wait, wait, can we bring that back?
I used to eat pasta every day.
First it was rice in my 10s and 20s.
Oh, I’ve seen you eat rice.
It is, oh, the shoveling of rice, my Lord.
So Freeburg, I mean,
if we’re going to be just intellectually honest,
if we’re going to be intellectually honest about this,
the fact that, you know, official health officials
can be wrong about positions they’ve maintained
with, I guess, seemingly total certainty for decades.
And now they can revise those positions.
I mean, doesn’t that lend some credence
to some of these like anti-vax arguments when they say,
well, gee, I’m skeptical about injecting our mRNA
I think it’s a totally,
you just got the episode banned on YouTube.
We just got a warning.
I’m glad I got the Pfizer vaccine.
And I think, look, it could have saved my life.
I mean, I had a very mild case of Delta.
Yeah, I had one of the first breakthroughs,
but it was very mild.
And I think that was because I got Pfizer.
I think the risk return was completely worth it.
But I can also see why people with like five-year-old,
like kindergarten age children might not want to get it
for their kids when the upside is absolutely tiny,
given that it doesn’t really affect five-year-olds
And the downside is not, there’s no proven downside,
but how is that any different than the aspirin thing?
Wait, am I the only one that wishes
you had gotten really sick with Delta?
Yes, you are.
There’s a bunch of people on the left.
I don’t disagree with the framing that,
here’s what typically happens.
The scientists or the FDA panel will say,
based on the data that we have,
this is our recommendation on what should happen.
And then the framing that people then assume is,
oh, this is what they believe to be absolute truth.
And with absolute certainty, this is what we have to do.
And I think the translation layer to the general population
is such that this is the 10 commandments.
I came down from Mount Sinai,
and this is what I’m saying has to happen.
When the reality is, it is based on data
and that data changes over time.
And I think that your point is right.
There is no absolute certainty that the Pfizer vaccine
is gonna be absolutely perfect for everyone.
And it’s gonna absolutely reduce the risk
more than it increases the risk
for people five years old and younger.
And it’s a very fair point that like,
but the problem as we’ve seen on all sides
is that the framing is that these things are binary
and they’re not, right?
There’s a probability distribution
which is defined as the risk
and the things that might go wrong
and the probability distribution of the benefits.
And then people assume that it’s just binary.
Yes or no, good or bad.
I think you’re making an excellent point there.
I just want to underscore.
Let me kind of translate what you’re saying
is that the people at the FDA are in these positions
who actually understand the science
make a cost benefit analysis.
And what they’re saying in approving it
is that the costs outweigh the risks.
Sorry, the benefits outweigh the risks.
To the broad population.
To the broad population, okay.
By the way, that’s why I got the vaccine.
I don’t know for sure
that there’s no downsides in 10 years.
All I know is there’s an upside immediately
and I benefited from that.
So I was very happy to take it.
But in any event,
instead of this complicated cost benefit analysis,
the media translates that into good, bad.
It’s almost like a moral case.
And then the politicians translate that into laws and rules.
And if you question the rules,
you’re now a bad person
because you’ve opposed the quote unquote
good side of the argument.
I mean, for example,
Gavin Newsom just signed a bill in California
saying that if you are a public school child,
elementary school, kindergarten,
you have to get vaccinated in order to go to a public school
even though the vaccine doesn’t even exist for them yet.
I mean, you could be pro-vax,
which I guess I would consider myself
to be clearly pro-vax.
I mean, I got it.
My 13 year old got it.
I support it.
I think it’s a smart decision to make.
But to require a five year old to get it
in order to go to public schools in California.
Well, you can also wait until we get the FDA data.
Here’s a question for you, Friedberg.
You know, having this,
one of the complaints has been the FDA restricts progress.
I mean, I think actually Peter Thiel
had this position for a while
that we should just get rid of it and disband it.
Well, what do we think about having the FDA
being framed as these are recommendations
and then each state gets to make a decision
with their local FDA?
So then if Colorado or Texas or Florida
had a difference of opinion about psychedelics,
about vaccines, they could run their own studies.
It’s a really important matter of ethics.
What are your ethics that you believe
should be the guiding principles
for how the government plays a role
in individuals making choice
about their health and their body?
And so if you believe that the government,
and there’s no right or wrong here,
it’s simply a framing of what you believe.
If you believe that it’s appropriate for the government
to make the decision about what’s safe and not safe
for you as an individual to do,
then the FDA should stay in place
and they should have their criteria
of when they’re ready to make a recommendation.
There’s enough data to define the benefit
and the cost of a particular thing
that you might put in your body
and then telling you, yes, you should or shouldn’t do this.
If you, and if not, they’re gonna take their time
and figure that out.
Now, if you don’t believe that,
then yes, the FDA should be disbanded
and drug companies will go around
and they will tell people, take this drug,
it will save your life and people will take it
and there will be people that will suffer from that.
There will be people that will have side effects from that.
Or maybe something in between.
There will be people that will die from that.
There’s local FDAs and federal.
And remember like the criteria for the FDA is do no harm.
So that is the criteria for a doctor in general.
It is a very difficult criteria to meet
when there are costs to a drug
or costs to a therapy or treatment.
When people get chemotherapy for cancer,
there are awful deleterious side effects to their body.
But the benefit of saving their life
and getting rid of the cancer
or having at least a shot at doing that is great enough.
And the FDA has made a judgment call
that that cost and that benefit kind of create an equation
that says this is an approved drug now.
And that’s really their goal.
And if they don’t have enough data
and they haven’t taken enough time to figure that out,
they don’t feel comfortable approving a drug
and making that recommendation.
But then if you let them get out of the way
and you let individuals make choice,
you could see this being a disgusting free-for-all
where drug companies will hawk snake oil on people
and a lot of harm will be caused.
And that’s the counter argument.
And I’m not saying one is right or one is wrong.
Well, I was thinking there might be something
in between with states having certain rights.
I mean, it’s really about
what is the role that you want any government,
whether it’s states or the federal government,
to play in deciding what you can and can’t do with your body
and what you can and can’t put in your body.
And ultimately what companies that are making products
for you can and can’t say to you
about the benefit and the cost of that product.
And there’s no simple solution, right?
I mean, like, if you want to say like-
Look at Kyrie Irving.
I mean, he’s basically, he’s walking away
from a $200 million extension and he believes in vaccines.
Not every individual is equipped to look at the data
and make a judgment call on their own.
And so the question then is what authority
will they look to?
And if the alternative authority that they will look to
is not as good as a research team of 18 scientists,
then they’re probably going to end up getting bad advice.
What do you think the odds are Kyrie retires?
I think it’s 60% right now.
I think it’s more than 50%.
So wait, he’s giving up $200 million
because he won’t get vaccinated?
He has a $200 million extension.
He gets paid like 30 or $40 million a year.
He refuses to get the vaccine.
He said the reason he’s not getting the vaccine
is because of all the people who don’t have a choice,
the pilots who are being forced to get it
or not go to work.
So he is a privilege, he says,
and he wants to make this decision for everybody else.
He also believes that the earth is flat.
Stop, that was a joke.
I don’t think it was a joke.
Where are you getting that from, Jayco?
Typing, Kyrie Irving, flat earth.
He talked about how do we know the earth is actually round
and he basically was holding it in two days.
That sounds like a media distortion to me.
Yeah, two days later he came out
and he was like, you guys misinterpreted.
Anyways, that’s nothing under there.
He’s, oh, he’s unique and wacky.
He sounds, so I wouldn’t make that decision.
Why are you so pejorative?
I know, I know.
Because it’s infuriating that he-
Just because someone disagrees with you,
you say that they’re wacky.
Because KD wanted to come to the Knicks.
These are Taylor Lorenz tactics.
KD wanted to come to the Knicks
and Kyrie convinced him to go to Brooklyn.
That’s the reason.
Jayco, you’re still a member of the media.
You have like a vestigial tail here,
is that you just bought in to the framework
that Freeberg laid out,
which is the media takes complicated issues,
cost-benefit analyses, and turns them into right or wrong,
good or bad.
He didn’t come to the Knicks.
He didn’t come to the Knicks.
So now he’s bad.
Now he’s bad because-
He’s bad for not coming to the Knicks, that’s it.
He sounds to me like a man of conscience.
No, a man of conscience,
who’s willing to stand up on principle,
turn down $200 million.
I got the vaccine for free.
I sure as hell wouldn’t turn away $200 million
not to get it.
So, I mean, it’s not a decision I would make.
If they offered you $200 million to not take it,
would you have taken it?
Would you have not taken it?
Yeah, I think so.
I think I’m not taking it for $200 million.
There was a, I heard a great story yesterday
at the poker table.
One of the guys was telling me.
It’s his backgammon teacher.
And he says his backgammon teacher,
is an incredible, you know,
good backgammon teacher and a magician, blah, blah, blah.
20 years ago, he was asked
to get female breast implants for a year for $100,000.
He did it and he kept them for 20 years.
That’s quite a free roll.
So, you know, the bar for people to do things
is really not that high,
is really what I took away from that story.
And what I took away from this story is.
So let’s go around the horn.
No, but Kyrie is willing to draw the line
on something that he believes in
and it’s gonna cost him $200 million.
There’s a lot of things that come with all of that noise.
He should be allowed to make that decision, in my opinion.
And I don’t like the way that he’s characterized
because I think this is a good human being.
He’s a phenomenal basketball player.
There’s no doubt he’s phenomenal.
Could you imagine how strongly he feels about this
if he’s willing to walk away from the game that he loves
and that’s, you know, been an enormous part of his life?
Well, why is it so important to foist on Kyrie Irving
the need to get vaccinated?
I mean, it’s not-
Because in New York City, indoors, you have to,
there’s a vaccine requirement
and he can’t play at home games.
He could play in Texas or Houston.
So they’ve talked about trading him to Houston,
but then when he went to New York
and he also can’t practice with the team
in New York, New Jersey, I guess, Massachusetts.
There’s a bunch of states
where you can’t go indoors without a vaccine.
They’re in close proximity to each other.
You get the idea.
I just think we’re turning a good thing into,
which is the vaccine.
I genuinely think it’s a great thing
that it got done so quickly.
It’s a miracle of science.
And I think it’s helped a lot of people.
I mean, all of us.
I mean, it’s the thing that’s going to end the pandemic,
largely already has.
But we’re turning into a bad thing.
But why were we demanding that these holdouts,
like every last person must get vaccinated?
Well, what about a flight attendant?
Should a flight attendant be for us
if they’re on a tiny tube going to the sky?
Or should they be work somewhere else?
You get so much protection by being vaccinated yourself
that I don’t think you should be circumcised.
So you don’t believe in mandates now?
Well, I think private companies have the right to require it.
NBA is a private company.
I know, I get it.
But I’m just starting to really question here
whether it’s truly necessary
to get every single one of these last holdouts.
There’s something un-American about imposing
on free people this decision.
They can’t just make up their own mind.
You in a previous episode said you were in favor of it
if people were dying at a higher rate,
if it was more acute.
No, no, no, no.
Well, hold on a second.
You did say that.
You said if it was killing kids
and a lot of people were dying,
you were in favor of it.
If it was some sort of like Ebola,
like yeah, of course,
it’d be a whole different cost benefit analysis.
But look, what I said,
and I think this is still my position,
is that government shouldn’t require,
shouldn’t stick a needle in your arm.
I think private businesses can do it.
Or you don’t use that service.
So I mean-
How much would it take for you
to get B-Cups implanted for a year?
For $1 billion, would you do it?
I’m not saying like a strong D or something,
just like a modest B-Cup.
I mean, is that a real story, Chamath?
Yeah, I’ll send you the link.
There’s a huge article about it.
It’s in Wikipedia as well.
Yeah, that’s an old story.
Jason, you’ve already got B-Cups.
I hope someone’s paying you for that.
I’ve lost 16 pounds.
I’m just like a perky A right now.
B-Cups be gone.
The show has gone off the rails.
We promised the audience we’d take two questions.
The first one is for Friedberg.
And the first question comes from Daniel Nielis.
Alphafone made great progress
in predictive protein folding.
Is there anything similar for chemical synthesis?
Could a similar system finally predict
a less energy intensive pathway to ammonia
than the Haber-Bosch process, for example?
I don’t see a difference.
This is a great question.
When molecules interact,
a molecule is a bunch of atoms stuck together.
And there are electrons and protons
that make up that molecule.
And therefore there’s this kind of variable
electric potential, energy potential
that surrounds that molecule.
And it’s very difficult today
to deterministically model
how two molecules might interact
with one another in physics.
And it turns out that that resolves using quantum physics.
And so today we can’t really
kind of put two molecules together
and say, here’s what happens when you put these together
and have a computer program very quickly
and easily solve that.
Quantum physics is involved
and we don’t have a good way
to simulate quantum physics in binary computers.
So one of the theories,
and there’s been some work on this
on the research basis,
creating the framework for it,
is that we can use quantum computers
to simulate the quantum states of molecules
and use that to figure out
how molecules might interact with one another.
And as a result,
you could kind of see us creating simulations
that resolve certain enzymes or proteins
that might break apart molecules
or stick molecules together
or other molecule combinations
that might cause something to happen.
The Haber-Bosch process,
which is being referred to,
was discovered through trial and error
in the early 20th century
by a German physicist and engineer.
And they realized that if they compressed atmospheric air
to 200 times atmospheric pressure
and ran it over an iron catalyst with electricity,
it zapped, it broke apart the nitrogen bonds
in the atmosphere and in the air that was compressed
and trickled out ammonia,
which is nitrogen and hydrogen.
And so this was like this amazing invention
and it saved the world and fed the world.
There’s a great book called The Alchemy of Air
if anyone’s interested in hearing about this.
But it was through trial and error
and we got so frigging lucky as a species
that we figured this out.
Using quantum computing in the next 30 years,
hopefully we’ll be able to deterministically
model these behaviors on a molecular and atomic level
and as a result,
build new systems to make things.
And that’ll be an incredible toolkit for humans
that’ll advance a lot of science
and a lot of engineering forward.
I’m still really strongly of the belief,
and this goes back to your point earlier,
I’m sorry I’m going on a bit of a rant.
No, it’s great.
In 100 to 120 years from now,
I do think we’ll all have a replicator in our room.
That replicator will make all the things we wanna make
nearly instantaneously with very low energy
and very low cost.
Including an organ, a new brain, a new heart.
Some food, the next car you wanna make.
I mean, we could see, and by the way,
this is a crazy concept.
It’s not just about, oh, you know, quantum stuff
or whatever was described in Star Trek.
But the general principle that you can locally make things
and locally make things cheaply
with very little energy and very little input
changes the whole supply chain model.
We’re seeing this increasingly with new technologies,
with 3D printing and biomanufacturing.
You start to put these all together
and you take a nonlinear track out
in the next couple decades.
And you get to a point that all this nonsense
we’re talking about where we’re mining stuff in one place
and making it in another
and shipping it and combining it all in another.
Yeah, I think that solves the Long Beach port.
Saks, Saks, you’re gonna be able to print a conscience.
And it’s gonna be incredible.
I’m so glad.
Freeberg, you’re gonna be able to print an emotion.
I’m so glad we took this audience question.
All right, here’s a question for Saks.
Matty, or I guess me and also Chamath,
and I guess all four of us.
Matty Chavez asks,
between being a VC founder, angel, corporate employee,
which has been the most fun, rewarding, and why?
What advice would you give someone early in their career
hoping to be like you,
multi-channel investor thought leader when they grow up?
Well, I didn’t become a VC until after I had already done
a few tours of duty as a founder and operator.
So, I mean, my recommendation would be
to get involved in startups first,
generally get some operating experience,
and that would serve you well.
Startups or even bigger companies.
I just think getting some reps
inside of an organization is critical.
I tell everyone that’s coming out of college
or early in their career,
it’s important you go get that perspective
and work at a bigger business.
I mean, I spent a few years at Google
and it was 1,000 people when I joined,
grew to 10,000 by the time I left.
But I learned so much just in that role
and seeing successful products,
successful models for operating a business.
It was really impactful for me long-term.
And then you go and make all the mistakes
as a founder building a startup.
And a lot of people end up with bad confirmation bias
if they work at a startup that didn’t work out
and they think, and all they can draw from
is a failed model for operating,
if things didn’t work right.
Which was your favorite?
Which role has been your favorite to date, Freeberg?
You know, when I was an executive at Monsanto,
it was really nice to have that private jet
that would come out and take me places.
They had a whole security requirement.
I already have that anyway.
Yeah, you guys have that.
Oh, wow, the 1%.
I have this impression of the 0.1%.
We’re not editing it out.
We’re not editing it out.
Stacey and Henry Belltester’s making a video.
I’m setting the tape.
Do not edit it out.
That’s it, you said it, it’s in your heart.
You own your words, David Sachs.
What was your favorite, Sachs?
My favorite stint?
I mean, obviously what we did at PayPal
has gone on to become a legend.
And then, you know, PayPal, I was the founder CEO,
we led that to a unicorn exit.
So you got to say those would be
the two best professional experiences.
I was joking about the private jet thing.
Honestly, like to me, and Sachs, I’m sure,
you know, and the rest of you guys can feel the same,
but like making a great product and selling that product
and, you know, working with a customer with that product
is honestly like the most rewarding thing you can do.
It’s like, you know, getting your hands dirty
and actually delivering something of value in the world.
There’s nothing more rewarding than that.
I mean, all the financial engineering and making money
and all the nonsense that goes on
is really kind of a zoom out of that.
But that’s really where reward comes in.
Yeah, I feel that way too.
I was joking about the private jet too.
I think Nick caught me misspeaking.
So yeah, it was the first experience was PayPal,
the second experience was Yammer.
We may have to do some audio work there.
Which is your favorite private jet that you have?
Yeah, which one, which?
The Global 7500.
By the way, I just want to defend myself
on stealing toiletries on Chamath’s plane.
Don’t defend yourself, don’t do it.
It was a mini bottle of Scope.
I drank half of it.
What are you supposed to do?
How many did you take?
Put it back in the drawer.
How many did you take?
On your plane or on Chamath’s?
On your plane, I took a, true story,
I did take the half bottle of Pappy Van Winkle.
You took my Pappy Van Winkle?
It was like a half left.
That’s a $5,000 bottle, it’s 2,500.
Actually, I’ll tell you a funny story about Pappy.
I boosted a half bottle of Pappy.
So, yeah, okay.
So here, I got to tell you this funny story.
So I was going on, you didn’t take it.
I drank it.
I was going on a business trip
with a couple of friends, coworkers,
who they’re actually founders now of a company I backed.
Anyway, we were going to an event in,
I think it was in Atlanta.
So it was like a four hour flight.
So they opened the liquor drawer or whatever
and saw the Pappy Van Winkle
and they asked if they could have,
I was like, sure, take whatever you want.
And then I went in the back and went to sleep.
So by the time we land like four hours later,
the entire Pappy Van Winkle like stash has been,
they’ve gone through it.
And it’s like, yeah,
it’s all these different types of Pappy.
You’ve got the Pappy 23.
You’ve got some of these,
you’ve got some of these antique ones.
So they asked me,
you know, they’d never flown on a private plane before.
They asked me, you know,
hey Sax, how much did this flight cost?
And I said, it costs about $6,000 in jet fuel
and about $8,000 in Pappy Van Winkle.
Pour the Pappy into the jet.
Oh my God.
Listen, I’m from around the way.
I’m leaving with something.
I’m leaving with something.
You know, like if I’m Bobby or PJ,
I’m gonna leave with something.
I think we found a way to end this podcast
in the most insufferable way possible.
Insufferable way possible.
Delete all the private jets.
All right, Nick, edit it all out.
Edit, no, edit nothing.
Highlight it, make it the opening.
All right, for the Queen of Quinoa, David Friedberg,
for Rain Man, David Sax,
and the dictator of South Somalia, Kali Hafti.
We’re playing next week at Saksipu’s place.
At the mausoleum.
We’re playing at, beep, next week.
At the mausoleum.
No, we’re playing at the mausoleum.
Nobody knows where the mausoleum is.
Nobody knows where the mausoleum is,
but it was where Sax was.
I’ve been docked so many times.
We better get security.
Chamath is coming.
Don’t bring him.
I’ll bring him.
All right, we’ll see you all next time.
We’ll let your winners ride.
Rain Man, David Sax.
We open-sourced it to the fans,
and they’ve just gone crazy with it.
Love you, West.
I’m the Queen of Quinoa.
I’m going all in.
Let your winners ride.
Let your winners ride.
I’m going all in.
Besties are gone.
I hope they’re deep.
That’s my dog taking a notice in your driveway.
Wait, no, no, no.
My avatars will meet me at Saksipu.
We should all just get a room
and just have one big huge orgy,
because they’re all just useless.
It’s like this sexual tension,
but they just need to release it now.
You’re the bee.
You’re a bee.
You’re a bee.
We need to get merch.
Besties are back.
I’m going all in.
I’m going all in.