Dude, Sax, I love that look.
Look at that shirt.
Look at that, man.
Is it too noisy for a podcast?
No, you look very relatable.
You’re like an American man, just like at home doing stuff.
Is he trying to go full Tucker on us?
It is a really, really horrendous shirt that you’re wearing.
That is a horrible, I mean,
that was the same shirt Tucker was wearing last week.
Oh my God, Sax is gonna be so appealing
to middle America right now, he’s like.
Absolutely, look, he’s going for the everyman.
Yeah, he’s an everyman.
He doesn’t have a blazer on.
He’s trying to get the purple pills.
Are you gonna go chop wood with Tucker?
I may not be a man of the people,
but I do try to be a man for the people.
♪ I’m going all in to let your winners ride ♪
Rain Man David Saxon.
♪ I’m going all in and instead we open sources to the fans ♪
♪ And they’ve just gone crazy with it, love you guys. ♪
Ice Queen of Kinwan.
♪ I’m going all in. ♪
Hey everybody, welcome to another episode
of the All In Podcast.
It’s obviously been an intense week
and there is a topic,
there’s really only one topic to talk about this week
and that’s the Russian invasion of the Ukraine.
With me to break all this down,
I’m gonna take it from a couple of different angles.
The rain man, David Sax with his power flannel on today.
He’s gonna go chop some wood after this,
trying to appeal to the everyman.
It’s a power flannel, it’s a power flannel.
I think that was gifted by Tucker.
And the sultan of science, hot off the-
How do you know it’s a flannel instead of a cashmere?
How do you know it didn’t come from one of Chamath’s little-
Chamath would never wear that shirt.
If you sent that shirt to Chamath, he’d burn it.
That would go right in his pizza oven.
I wouldn’t burn it, but I would wipe my butt with it.
Here we go, folks.
And hot off the launch of the Cannabeverage printer,
replicator, the sultan of science himself, David Freeburg.
And back from a little holiday.
The dictator himself, Chamath Palihapitiya,
with a Jedi robe.
Tell us about the Jedi robe that you elected for this week,
Well, this is-
Darth Palpatine Hapitiya.
Well, I mean, this is, look, this is, yes, it is cashmere.
We’re running out of time.
I have to wear it through the rest of my few garments,
my new garments, before it’s springtime.
And then I have to go to the, you know,
the linen and the cotton.
So you’re enjoying the final days of cashmere.
Well, I do, I did find some baby cashmere.
Light, thin, you know,
you can wear them probably until April, maybe even May.
So we have that going for us.
All right, well, there you go.
And is there a specific date that you shift over
from, to the linens and-
To be honest with you, I have a,
I have a team I consult with.
The team’s working on that.
They’re working on that.
They’re working on a recommendation.
All right, so we can still laugh.
It’s kind of hard to talk about other topics
when a war has broken out.
I don’t know if I have to go too deep
into recapping what’s happening
because it is a static situation.
But there’s been massive fallout from the war,
both economically, lives lost,
and it’s escalated pretty dramatically.
We had a pretty crazy moment last night.
We’re taping this on Friday.
March 4th, last night, a nuclear facility,
the largest one in Europe, was involved in a firefight.
It seems to have been secured
and the Russians have taken control of it,
but there were people bombing it.
Where to begin here?
I think maybe, Sax, you can start us off
with a little bit of your assessment
of the situation as it stands in week two.
Yeah, I mean, when we broke up last week,
this war was just breaking out
and we were still talking about ways
that we might defuse it.
Obviously, that was too late.
And I think everybody, probably Putin first and foremost,
felt this would be a cakewalk
and it has turned out not to be.
The resistance by the Ukrainians has been fierce
and it’s been sort of galvanized by their leader, Zelensky.
At the very beginning of the hostilities,
he made the decision to stay and fight.
He had that video that came out
with his cabinet standing behind him.
That galvanized all the people of Ukraine
to stand behind them.
And then the West now wants to stand behind
the whole country of Ukraine.
So it’s really been amazing leadership
by Zelensky and it’s too bad in a way
we didn’t have that kind of leadership among our allies
in say Afghanistan.
We had this guy Ghani who got in the first helicopter
out of there when the trouble started.
So his leadership has been strong and admirable
and it’s basically galvanized the West.
And I think that Putin, I think must have underestimated
the level of resistance he would face
and also the unity of the West in terms of sanctioning him.
And providing support for the Ukrainians.
All that being said,
I think we’re now at a very dangerous sort of crossroads
because the situation is very volatile
and you’ve got so much variance
in the outcomes that can occur now.
I think you’re seeing people prognosticate everything
from Kiev gets turned to rubble in the next week
and the Russians basically power through and win
to this turns into a long-term insurgency
to there’s gonna be some sort of uprising in Moscow
and regime change there.
And I think because the variance is so high,
because the two sides are playing for all the marbles,
so to speak, and you’ve even got, I think,
intemperate and insane remarks by Lindsey Graham
basically calling for Putin’s ouster,
which I think is gonna give-
I mean that quote just to pause there.
Yeah, it’s gonna give the Kremlin,
I think a propaganda tool,
but for rallying people internally.
But the point is just,
it seems like we’re playing for all the marbles right now.
And I think that’s a very dangerous place to be.
And I’m seeing insane rhetoric and commentary
by people trying to push us into war.
And so just the other day,
one of the things I tweeted about
is one of the craziest things you hear
is we’re already in World War III.
Well, Kasparov said this,
I mean, he’s kind of known to be a little bit of a hothead,
but you also had Fiona Hill,
who’s supposed to be a Russia expert
from the State Department,
who frequently is the go-to source
for CNN and other publications,
also saying we’re already in World War III.
Well, no, we’re not.
I mean, if we were in World War III,
you’d see the mushroom clouds,
assuming you were still alive and not vaporized.
So it is incredibly reckless
for people to be saying things like this.
And there is just this drumbeat of war
that is being pushed by cable news
and by the Twittersphere.
And just today, thankfully this morning,
NATO announced that it would not be imposing
a no-fly zone over Ukraine.
That was another-
And why is that important?
Well, because there’s all these people who are saying,
well, we shouldn’t send boots on the ground to Ukraine.
We don’t need to get militarily involved,
but let’s do a no-fly zone
to basically help the Ukrainians.
The problem with that is-
Yeah, how do you enforce that?
What a no-fly zone means
is that you’re gonna shoot down Russian planes.
You are going to war.
It may not be boots on the ground,
it’s boots in the sky.
So had we done that,
had we given into the emotional appeals,
and I think we all feel the tug on our heartstrings,
but had we given into that,
we would be potentially in a shooting war with Russia.
And that would be the most serious-
We’re already in, I think,
the most serious foreign policy situation in my lifetime,
and I’m almost half a century old.
So, you know, it’s very dangerous.
And, you know, I’ve been saying for the last month
on this podcast, I’ve been actually advocating
for the cause of not getting militarily involved.
And a month ago,
it seemed like an argument I didn’t need to make.
But now it really does,
because both sides are sort of,
there’s almost a unanimity in Washington
that we need to continue escalating the situation.
Sax, my concern is less about the Washington intent
to put boots on the ground or boots in the sky.
And I’m much more concerned about NATO allies.
There’s 30 member nations in NATO.
And if any one of them does something stupid,
if there’s any action by any even rogue element
within the military or some statement,
even by some politician, some NATO member,
you know, you could see a reaction potentially from Putin.
And then Article 5 kicks in,
which is this collective defense article in NATO.
And then the United States has an obligation
to enter the conflict.
And that’s the one scenario you didn’t mention,
which is the scenario I am most concerned about,
most frightened by,
is we don’t know when or if a Franz Ferdinand moment
could occur here.
That someone does something stupid,
some Polish tank rolls across the border
and shoots down some,
shoots at some Russian, you know, tank,
and then the Russian tank crosses over.
And then all of a sudden,
we’ve got to go to the rescue
and we’ve got to go defend that NATO member.
And then all of a sudden,
this whole thing sparks into a wildfire.
It felt like last night could have been that
when you look at the fog of war,
you know, it was basically this nuclear reactor,
if it explodes, if it has, you know,
an episode would do just tremendous damage
to the whole continent.
I mean, if you’re living in a NATO country or in Moscow,
if that thing had gone up,
which I know is a very,
would be a rare occurrence
and they were shutting it down, et cetera.
So, but there was that rumor last night,
it felt like there could be a tipping point.
Nuclear material is like a whole nother level.
It’s like, it has nothing to do with war at that point.
It has to do with extinction.
You know, a nuclear reactor
is almost like a temple on earth to God.
It’s like this holiest of holies.
No one can, should, or ever could consider that
to be a point in conflict ever.
It’s nothing should be touched,
let the wars of humans continue
on the rest of the earth surface.
But nuclear weapons, nuclear reactors,
that’s unleashing the fury of the gods on Olympus.
And when they come down,
they scorch the earth and nuclear material,
you know, is an extinction kind of,
or is, you know, kind of a cataclysmic event
for this planet.
And so, you know, that goes well beyond this idea of like,
is it NATO or did someone shoot at someone?
Let’s all go fight.
It becomes like almost existential
to the condition of humans.
Well, so what does that say about Putin then?
I mean, Putin targeted that facility.
No, hold on a second.
Hold on, I think that’s fake news at this point.
Do you see the tweet by Michael Schellenberger?
Hold on a second.
You said this is Fog of War.
Last night’s tweet, I did see last night’s tweet.
Okay, so I don’t necessarily think this is Fog of War.
I think this might be disinformation.
So here’s what happened is,
and it wasn’t just misreporting.
Zelensky tweeted out a video
where he basically was saying,
this plant has been attacked, it’s on fire,
it’s gonna be Chernobyl times 10 for all of Europe.
And then the foreign minister of Ukraine
came out with another statement
just like that simultaneously.
So this was coordinated.
And then I saw on all the cable news networks, all of them,
there was no difference between Fox and CNN, MSNBC,
same reporting, they were all in a panic about this.
And then we find out very quickly the truth,
which was confirmed by the White House,
which is no radiation, no explosion.
The fire was sort of tangential.
It wasn’t core to the plant.
So I think we have to be very careful now
to guard ourselves against disinformation
that is designed, frankly, to escalate the situation
and pull us to draw us into a war.
Simultaneous with this,
there was a New York Times op-ed by Zelensky
and one of his aides who was standing next to him
sort of transcribing,
and the headline was something like,
I’m fighting to the last breath.
Look, that is heroic.
I mean, I think we can all recognize Zelensky’s bravery
and courage in doing that.
However, the point of that article
was to tug on our heartstrings,
to get us to involved in the war.
And what he said in that article was,
you don’t need to send boots on the ground,
but impose the no-fly zone,
which we just talked about is a declaration of war.
Yeah, but no, no,
what I was talking about with the nuclear power plant
is not that it wasn’t being hyped up by the media,
certainly like this was becoming like their ratings bonanza,
and they were definitely hyping it up.
And maybe Zelensky was giving a warning,
hey, this could escalate.
But the Russians did target that.
They were bombing around it.
They were firefighting.
So to Freeberg’s point,
this is, I think, crazy behavior by Russian troops,
by Putin to actually try to seize a nuclear power plant.
It seems pretty crazy.
Chamath, you’ve been silent thus far.
Let’s get Chamath involved here.
There’s a 17th century phrase that says,
adversity makes for strange bedfellows.
And I think what happens
when you are in the middle of enormous adversity,
you need to do whatever it takes to win, right?
That’s, I think, why Zelensky is so patriotic
and viewed so heroically around the world now.
He’s trying to defend his country and his people.
I wanna take the counter of, David, what you said.
I actually think we are at war,
but it’s the most positive form of it
in the sense that we are learning
a different kind of warfare.
Now, if you think about how we used to fight
up until basically the Persian Gulf War,
it was armaments and tanks.
And then that evolved in the Middle East
because we had to fight insurgents
and urban terrorism in many ways, right?
I think this is a way in which we are learning
that there’s a different kind of warfare as well,
which is fundamentally economic.
And so it may not take the same shape
as drones and missiles and fire and guns and bullets,
but I think you would be foolish to make the mistake
that we are now not at economic war with Russia.
And at the end of the day, the outcome is the same,
which is either they survive or they don’t survive.
And everything we’ve done points to
that we are willing to fight,
and we are willing to put a lot of economic collateral
and chips on the field in order to win this battle.
So I think in that respect, we are kind of at war.
Did we, are we on, is this a nuclear level
But this is my point,
is like everybody has a historical framework
where they want to go back
to how the natural path of escalation works.
And I think this is a very different form of escalation
that we need to consider.
And I think that this is the kind of warfare
that may actually, you know,
be the way in which wars are fought in the future.
You seize assets, you shut off access to supply routes,
you make it impossible for anything to work.
So, you know, I’ll give you a simple example.
A form of warfare is what’s happening right now
in the sense that, you know, for example,
the Russian skies are completely clear,
not just because that, you know,
no external airlines will necessarily fly there,
but because Boeing and Rolls Royce and GE and Airbus
basically pulled all of their support,
all of their parts, right?
We’ve gone to war with respect to their petroleum
and LNG supplies, how?
Not necessarily because we won’t still stop payments,
which we are still enabling,
but because the actual refiners won’t take the oil
and the LNG,
because they then would be subject to sanctions.
The people who would ship that
are no longer taking those payments
or those barrels of oil into the marketplace
because they can’t get insured by international banks.
So in all of these various ways, we are actually at war.
And I think, you know,
maybe this is the way war should be fought in the future
because it’ll save thousands of lives
in the more classic way of describing
how lives are sacrificed for.
I want to make a counterpoint.
My concern, Chamath,
is that we’ve rushed into a reactive response
with respect to sanctions and seizing assets
in a way that may be not be calculated over the long run.
Meaning like, are we setting ourselves up
for another Iraq, Afghanistan situation
where we rush into a war
and we don’t have an exit strategy?
And the issue is that a lot of the assets
that we’ve effectively wiped the value down to zero
have a repercussive effect on global businesses
and the global economy.
As an example, you know,
this company that we were texting about called Luke Oil,
they were worth $60 billion a few days ago.
We effectively wiped them out to zero.
And 65 to 70% of the shares in that company
were held and owned by public retirement funds,
pension funds, mutual funds
that are used for retirees in Europe and the United States.
And so, you know, a significant amount of-
I think this is a complete red herring.
I’ve told you this in the private chat.
I think this is a complete, complete red herring.
And the reason it’s a red herring
is that the global total market cap
of all of these businesses
is meaningfully different than the amount of total capex
that these guys represent.
And in as much as you are going to take the equity values
of certain of these companies to zero,
it’s in the grand scheme of things,
not that much equity value.
We can absorb it.
We’re not talking trillions of dollars.
Forget about the equity value.
Just think about the economic repercussions
where there is leveraged positions
and swaps and derivatives in place,
counterparty swaps in place with a lot of these companies
that are now going to default.
And we’re not going to know that till the end of this month
when everything has to settle
and no one’s going to be able to make their payments.
Small price to pay, Friedberg.
Well, hold on one sec.
This applies both to Russian companies
that are suppliers and buyers of assets,
products and services from international businesses.
And all of a sudden that line item just zeros out.
I don’t believe the economic value of all of that oil
exceeds the market cap of luke oil.
I don’t believe it.
And I don’t believe further
that the economic value that’s held by non-Russian actors
is meaningfully more than a few 10s of billions of dollars.
We’re going to find out pretty quick.
By the way, Russia and the Ukraine combined
account for roughly 25% of global wheat exports.
Let me say it differently.
That wheat goes to Egypt
and from Egypt it goes throughout Africa.
And there’s a lot of nations and a lot of people
that depend on that food supply.
And that food supply is now cut off.
Okay, I understand.
But now we were talking about something different.
You want to talk about wheat, we can talk about wheat.
I’m just talking about generally,
I’m talking about zeroing all this stuff out
and cutting them off completely.
Hold on a second.
One of the things you have to realize, Friedberg,
is that the purpose of sanctions
is to create massive pain that stops a madman dictator
from invading other countries and causing a world war.
So while it is tragic that some pension,
hold on, let me finish, Friedberg.
While it is tragic that people will suffer
and people maybe can’t get their Netflix
or can’t get their Facebook
or some wheat will get disrupted,
all of this is the better choice
than going to war with Putin.
And it’s meant to create pain and suffering.
It does not create pain and suffering,
then Russia will not change.
That’s the point of sanctions.
Jake, I totally get it.
I totally understand the intent.
And I totally understand the point.
My point is, have we really done the calculus?
Because when you make this much of an impact this fast,
when you rush into what we might call an economic war,
with such significant abrasion
in such a significantly short period of time,
do we really have a sense of where the calculus is?
Because I don’t know where the wheat imports
are gonna come from for Egypt now.
And I don’t know where the millions of people
that depend on that wheat supply
are now gonna get fed from.
And I don’t think we have an answer.
If we had a strategy that said, here’s the solution,
here’s the solution from an energy perspective,
from a food perspective, from a capital perspective,
to fill all these holes.
Otherwise, we may all end up sharing that cost
over the long run.
And it’s gonna be a big cost to bear.
I think you’re wrong.
And the reason why I think you’re wrong
is we’ve already seen how this has played out before.
In the last two years,
we learned what governments are willing to do
when you have supply shocks and demand shocks.
And what they do is they turn on the money printer
and they create enormous amounts of stimulus.
And what we have now is a point
where if these shocks are really, really,
really meaningful globally,
I think you’re going to see the Federal Reserve
and the ECB and the Bank of Canada
and the Bank of Japan step in in a very coordinated way
to provide liquidity to these markets.
And I think what that has the byproduct of doing
is blunting the economic consequences to everybody
but the person who is sanctioned.
Do you think that’s inflationary as well?
And the other thing, in fact, it’s the opposite.
Look, David and I have been the ones that said
the risk is to a recession.
We are now teetering towards a recession.
Nick, you should throw this thing
that I sent to you guys before.
If you look back over the last 30 or 40 or 50 years
and you look at every single period
of when there has been a recession,
what’s interesting to note is that
it’s not always been the case
that the price of energy has risen by 50% in a recession.
But it is always the case
that when energy prices spike by 50%, we enter a recession.
We will contract as an economy.
The government will have to become more accommodating.
That is the price of this economic war
that we have started.
And I think it’s a just price
because what’s happening is not supportable.
So, Tamar, you are sure that we’re,
or you feel strongly that we’re not entering
into a condition of significant stagflation
where we’re not able to re-stimulate the economy
and we inflate everything with all this money printing.
I don’t even know what stagflation is
to be completely honest with you.
I don’t think I’ve ever seen it.
I know how it’s classically described.
I think it’s like pseudo-intellectual
kind of gobbledygook speak.
What I can tell you is,
I think that prices are too high
in certain core commodities and goods.
I think what’s gonna happen is we are going to find a way
to subsidize those prices coming down.
And I think the simplest way to do it
is for the government to step in and become a buffer.
And it will drive massive deficits.
It’ll drive increasing amounts of debt.
But I think that is a simple way for us
to make sure we put and ratchet the pressure.
And just to speak on this other point,
we have only just begun.
Meaning just today as we started the pod,
Biden came out with an incremental new set of sanctions
on Russian crude.
So we’re not at the, even in the beginning,
we’re at the beginning of the beginning.
I’m just worried this is a new kind of nuclear war.
I mean, it’s frightening.
If this is the new nuclear war,
then it’s a blessing
because we’re not gonna have millions of people die.
Sachs, are the sanctions just right?
Too strong, too little?
I think vis-a-vis like versus going to war.
I think what Freeberg’s saying
is that we’re on an escalatory path here
that starts with sanctions,
then leads to more and more sanctions,
then includes arming the Ukrainians.
And on and on it goes.
That’s a big leap.
And I think-
No, we’re already arming them.
Germans gave the Ukrainians Javelin missiles last week.
Oh, that’s true, sorry.
I know, absolutely.
And there’s a lot more coming.
So, you know, what I would say is,
back to something Jamal said,
which is we’re already at war.
I, you know, call me a non-binary,
call me a non-binary thinker,
but I don’t like dividing our options
in that simply into war and peace.
I think there’s like a spectrum here.
And you could call that spectrum an escalatory path.
So there’s sanctions, there’s arming them,
and so on down the line.
And I don’t like characterizing what we’re in
or what we’re doing as war
because once you’re in war,
then it justifies anything.
And for the other side too.
You’re such a pacifist, Sax.
Look, we have to remember-
Wait, no, let me just clarify what I’m saying.
Let me just wait.
I didn’t say we’re at war.
I said we’re at a form of a war.
It’s an economic war.
It’s just a different kind of-
Well, I hope it stays economic then.
You know, I don’t like using that metaphor,
but let’s not debate semantics.
But to Jason’s point, am I a pacifist?
What I would say is, you know, during the Cold War,
we have to remember that this philosophy of containment
that we had,
the goal was to prevent the spread of communism
while conceding that the countries
that were already communist,
that were behind the Iron Curtain,
we would not challenge.
We would not seek to roll that back.
Because we did not want hot war with the Soviet Union.
And everything was calibrated to make sure
that we did not blunder ourselves into nuclear wars,
mutually assured destruction.
And yet it almost happened anyway,
most notably with the Cuban Missile Crisis.
But rules of the game evolved, right?
And so we did things like arm the Mujahideen rebels
in Afghanistan with Stinger missiles.
So that would be sort of the equivalent of the Javelins.
But we sure as hell didn’t put the American flag
or a NATO flag on the boxes
and on the trucks delivering those weapons.
We delivered them through Pakistan, through intermediaries.
There were rules of the game that we all understood.
Now, I hope we are following similar rules,
but it feels to me like we are.
And I think one good thing is that both Biden
and certainly Putin remember the Cold War.
They were very involved in the Cold War.
They’re old enough to remember it.
And hopefully we remember those rules.
The most encouraging thing I’ve heard Biden say
this entire time was when he reiterated
at the State of the Union
that we would not get militarily involved.
It’s very important that he keeps saying that
because the Russians are looking at these statements.
So we just have to remember that, again,
we’re on this escalatory path.
And one of the things that’s going on here
is a purity spiral.
So there’s a social media version of this,
and there’s like a partisan version of this.
So the social media version of this
is that the way that you show
that you’re on the side of the good of Ukraine
is you advocate for the no-fly zone.
You advocate for the escalation.
But if you advocate for slowing down or deescalating
or just taking a breath,
you’re called a Putin bootlicker.
You’re called Neville Chamberlain.
I’ve already gotten about a thousand reply tweets
coming at me saying that.
So the purity spiral on Twitter
that we’ve seen in so many other contexts now
pushes everybody into World War III.
Similarly, there’s a partisan dynamic
where no matter what Biden says or does,
no matter what new sanctions he imposes,
the Republicans will always announce him for weakness.
And the media and Fox News
will always announce him for weakness.
It’s a one-way ratchet.
How much more do you want him to do is the question.
And I think Freeberg asked a great question,
which is, what is the end game here?
What are we trying to accomplish?
And what I’m worried about is the dynamic,
this frenzy that, what Balaji has called
the chimp frenzy of social media, right?
With cable news and now social media and partisan rhetoric,
it all pushes us towards continual escalation
at World War III.
And who are gonna be the grownups who say,
listen, this is foolish, stand down, take a breath.
By the way, we might wanna keep
some of these cards in reserve.
We don’t have to play every single thing right now.
To your point, I saw Lady G trending.
I guess this is his nickname.
But Lindsey Graham literally explicitly said
somebody in Russia needs to assassinate Putin.
I mean, this is a crazy escalation.
And then on the other side, inside the,
you have people saying, Putin’s a genius.
We are gonna continue to ratchet up
these economic sanctions, guys.
This is the beginning of the beginning
of the economic sanctions.
We’re not even in the middle of them.
What do you think he’s gonna do, Chamath?
What is the exit ramp for Putin if we keep doing this
and he’s in a corner?
I have no idea, but I think that it’s clear,
it’s pretty plain as day if you’re going to be unemotional
and just look at this from the American
and European perspective, which is the only end game now
is regime change, right?
And one step before regime change
is a complete sort of detente and somehow
surrender by Putin in the sense
that he pulls back from Ukraine.
Not if 70% of his people support him,
which is what a polling figure showed this morning, right?
Be careful with those polls.
I mean, people in Russia are not exactly gonna say
I’m anti-Putin in a survey.
Well, J. Cal, I mean, look, you can say that
to kind of defend what you believe about-
No, I’m not saying it to defend what I believe.
I’m saying it pragmatically.
Just suspend it and assume for a moment
that maybe that is the position of those people.
Maybe they do believe in pride of nation,
like the United States would believe in pride of nation.
If we were attacked,
if everyone took economic sanctions against our country,
would we not stand up and defend our president
and our nation and say that our country
is the prime country and our way of living
and our life and we should be left alone?
This is not an issue for the world to get involved in.
Okay, but let’s clean this up.
And so how do you end up, assume that is the case,
how do you end up having a regime change
where you don’t have a country that’s actually in revolt,
but you have a country-
I have no idea, but let’s play this out.
Like, look, let’s just say-
Where people are rallying for what this guy is doing
if that is the case, right?
Let’s move our conversation to exit ramps.
From where we are, there’s two options, right?
There’s two options.
Option one is Ukraine successfully defends itself, right?
And option two is Russia, quote unquote, wins, okay?
Let’s just go down that branch for one second.
Before they settle, there’s a third one, Jamal.
They come to a peace treaty,
which is what’s happened previously.
Oh, there’s a third, and then there’s like,
I guess what you’re saying, Jason,
is like everybody just kind of stops
where they are in place.
Yes, they do a peace treaty.
They give them the east of Ukraine.
Well, let’s play it.
So then what happens to all of these economic sanctions?
Are they undone?
That would be part of the negotiation, right?
Maybe undone based on conditions?
The question is, are their reparations paid
one way or the other?
And how do those get funded?
Well, those reparations-
And does the IMF get involved and say,
hey, we’re gonna fund your $300 billion war damage bill
to the Ukraine?
And, you know, there ends up being a-
Do they just confiscate the $650 billion
sitting in foreign bank accounts
that’s owned by the Central Bank of Russia?
Again, like how do you go back and lead a nation?
And how does a nation accept that?
How do they accept that their sovereignty
has now been challenged when a few months ago,
they were the aggressor, right?
I mean, look at what happened to Japan, by the way.
I mean, it’s a very similar kind of psychological shock
that may not be as easy to swallow with modern Russians.
Don’t all roads then lead to,
this is going to take a really long time to figure out?
It’s either gonna take a long time
or it’s gonna catch on fire.
I thought Georgia took like 11 days.
So, I mean, there’s a Sun Tzu quote,
which I don’t wanna butcher,
but it was, build your opponent a golden bridge
to retreat across.
There needs to be a golden bridge here.
We don’t see that.
We did talk about it two episodes ago where we said,
well, we’re not the people running the country.
I’m talking about like, where’s Biden
and where’s the rest of the State Department
in saying, here’s an exit path for Putin
and clearly stated over and over again
and give him something to win, right?
I think we gave a suggestion, David, correct me if I’m wrong
if you suggested or I did two weeks ago
when we started talking about this, which was,
hey, why don’t we just say,
hey, we’re not going to allow Ukraine
to join NATO for a decade.
If you leave now, you know.
We’re so past that.
We’re so past that.
That has nothing to do with, I think, what’s going on now.
I mean, you had countries,
you had countries like that came off the sidelines
and have done things they haven’t done 30, 40, 50 years.
And in some cases ever.
I mean, their industry just got gutted this week, J-Cal.
So like, there’s a hundred million people worried about,
there’s a hundred million people worried about food.
If we had done it preemptively, would it have made a difference?
I think it would have made a huge difference.
Like look at Germany as an example.
Germany undid 40 years of policy.
You know, they had consistently been under-investing
relative to their GDP in the military.
And they made an explicit commitment
to basically just ramp that up back above 2%.
You know, they’ve also made commitments
around their energy independence.
You know, Switzerland is freezing bank accounts,
something that they’ve really never done.
And they’ve always stayed neutral.
Sweden sending military support.
So there’s a lot of countries in Europe,
in continental Europe that have found a voice.
Well, it’s terrifying, right, Chamath?
I mean, to live with this threat just east of you,
this would be like us living with this threat
in Central America or something.
This is like two steps away.
And I think that’s what people forget,
is the geography here of, you know,
France, Germany, Poland, Ukraine.
I think this NATO commitment
doesn’t necessarily get it done at this point.
Yeah, I agree with that.
I mean, it didn’t have to be part of anything.
What’s the exit ramp for Putin?
Well, the exit ramp, in my opinion,
is that you ratchet these economic sanctions up so severely
that then, you know, look, the thing is,
hopefully, in the aperture of war,
memories are short in the sense that, you know,
if you ratchet these things up very aggressively,
now all of a sudden something from even two weeks ago
seems like a much, much better place to be, right?
And so that could be an off ramp,
which is like you basically find a way
to take a lot of pressure off these economic sanctions
in return for a detente.
I mean, I don’t know, but I’m making this up.
I have no idea.
I mean, it feels like there’s no exit here
because Putin has a lot of pride and nuclear weapons.
Is this a no exit situation, Sax?
I think there’s always an exit.
We have to be willing to contemplate what that is.
I think, to your question,
let’s go back for a second to your question
of would it have made a difference
if we had taken NATO expansion off the table,
say, last year?
I think this year is probably already too late.
But I think the answer is yes,
regardless of whether you believe
that NATO expansion is a real issue for the Russians
or whether you think that’s a pretext,
because people are in one of those two camps.
Putin has been saying since 2008,
in 2008, there was a NATO summit in Bucharest
in which they basically declared,
they proposed that Ukraine and Georgia
could eventually be eligible for membership.
That basically started this whole thing.
The Russians at the time said
this is an absolute non-starter for us.
It’s a red line.
No way will we allow this to happen.
And in fact, later that year,
they rolled the tanks into Georgia
to put a stop to that idea in Georgia.
In Ukraine, the conversation was deferred.
They had this basically pro-Russian,
democratically elected prime minister,
who was deposed in a coup in 2014,
a coup that was supported by our State Department
and probably the CIA, okay?
In reaction to that, Putin seized Crimea,
not a year later, not months later, days later.
The reason why he was able to seize it so quickly
is the Russians actually have a naval base there
at Sevastopol, okay?
It’s a leased, the area’s leased from Ukraine,
but they have a naval base there.
It allows them to control the Black Sea.
So the Russian thinking on this,
if you believe it, goes that,
listen, we’re about to have a pro-Western ruler
come into Ukraine, installed by an American-backed coup,
and now we’re gonna lose our main naval base
in the Black Sea and it could be replaced with a NATO base.
There’s no way that’s happening.
So they moved to seize Crimea.
And then after that, they started backing Russian separatists
in the Donbass and the civil war began, okay?
So that basically is what’s been leading up to this.
And then last year, they started getting very exercised
about the possibility of this NATO proposal,
which again, goes all the way back to 2008,
becoming formally recognized and Ukraine joining NATO.
And again, this is from the Russian perspective, okay?
And we could talk about whether it’s a pretext in a second,
but from the Russian perspective,
they said that, listen, and Putin gave a speech like this.
If Ukraine joins NATO, because of Article V,
the next time we have a border dispute,
which is all the time, right?
We could end up getting drawn
into a World War III with you guys.
And so there is no way we’re gonna allow Ukraine
to be part of NATO.
And so they basically by December
had given an ultimatum to the State Department.
Now, what was the response to that?
Lincoln came out at the critical moment and said,
NATO’s door is open and will remain open.
Basically said, you guys can take a hike.
Now, obviously that was extremely provocative thing
and the Russians invaded Ukraine days later.
Now, I think it’s pretty obvious
that if you take the Russians at their word,
that they believe,
forget about whether you think it’s true or not,
but if you believe, take them at their word,
the same word they’ve been saying since 2008,
that this is a red line for them
and they have a serious vital national interest there,
then you should have diplomatically
tried to resolve this issue.
But even if you believe it was a pretext
and Putin is making up this whole red line thing
and his real goal is the expansion of Mother Russia
and all that kind of stuff.
Let’s say that’s his real goal.
It still would have been a good idea
for Blinken to basically declare
that we were gonna take NATO expansion off the table,
which is simply an affirmation of the status quo.
It’s not appeasement.
You’re not giving anything up.
You’re reaffirming the status quo.
Why would that have been a good idea?
You’re blocking something from happening in the future.
Why would that have been a good idea?
Because the polling on this showed
that the Russian people by two to one
were in favor of basically taking
this kind of military action against Ukraine
to prevent NATO expansion,
but they were not in favor of doing it
purely for reunification.
So you would have, if this was a pretext
by Putin for his expansionist dreams,
you could have taken away that card
and it would have changed his calculus.
Would it have prevented the war?
We can’t say, but in his calculus,
he’s gotta think, well, wait a second,
maybe the people won’t be behind this.
Here’s the good news too.
If you had given him that chip
and said that we’re not gonna let them into NATO
and then he does invade,
now you’ve proven that this person
is in reunification mode and he’s deranged
and he’s a warmonger and that this could go
to other places and Finland and Poland
and other people have a real reason to be scared.
Yes, he would have much less internal support.
It would have been a much better chess move.
Right, so there was a failure to listen
and this is what concerns me.
So I wanna, you know, George Herbert Walker Bush,
who I think was a great foreign policy president,
only sort of wasn’t so good on domestic,
only got reelected, didn’t get reelected,
but everyone recognized him
as a great foreign policy president.
And he has a quote about this style
of foreign diplomacy that his son practiced,
Dick Cheney and Rumsfeld and the same people now
in the Biden administration,
it’s all the sort of neocon foreign policy.
He said, he called this iron ass foreign diplomacy.
He called Cheney an iron ass
and he called Rumsfeld arrogant.
And, you know, what he basically said
is that these guys he’s talking about,
Cheney and Rumsfeld, they don’t listen.
They just wanna kick ass and take names.
They never wanna listen to the other guy’s point of view.
And, you know, he thought this was tragic.
He thought it ruined Bush 43’s presidency.
And I gotta wonder, I mean,
are we practicing the same style
of iron ass diplomacy here?
You know, well, now it’s too late.
We’re already at war.
I mean, I think if we had practiced,
I think if Herbert Walker Bush and James Baker,
it had been president last year
and James Baker was secretary of state,
do you think we’d be in this mess?
I don’t think so.
I think James Baker would have figured out
a way to defuse it.
Now it’s too late.
Who is the political scientist
that you shared that link from in the group chat
from the University of Chicago
this guy, John Mearsheimer,
who’s sort of king of the realists.
I watched the video from him.
It’s quite convincing that we should have an approach
that was, hey, we don’t need to incite Ukraine to break off.
We could let them make their own decisions
and that we’re kind of taunting the Russians.
And I don’t think, you know,
he makes a pretty convincing argument there.
And I don’t think you need to be a Putin apologist.
You can keep in your head, this person’s a dictator.
This is a communist country.
He’s a murdering sociopath.
And at the same time, we should not provoke him
and let the Ukraine make their own decisions,
but not encourage them to come into NATO.
And we should have taken NATO off the table.
It’s pretty clear that that would have been
a better decision here,
but we still can’t think of an exit ramp here,
which, and I don’t hear Putin talking about,
Putin has never said, I want X.
Well, no, I think, no, there have been times where he,
well, I mean, look, I think his demands
have been an on starter with us.
I think at this point, he wants Crimea.
He wants the Donbass to be independent,
maybe under the suzerainty of Russia,
some protectorate basically.
And he’s talked about this denazification,
demilitarization of Ukraine.
I mean, so now I think the demands are escalated
because they’re at war and-
He’s lost too much.
He needs to get more, right?
I mean, part of the problem is-
You’re saying he’s stuck?
He needs to-
No, I think once you’ve, you know,
once you’ve invested a hundred dollars,
you got to make 150 back.
Whereas before he had invested $10,
he would have been happy taking 50 out.
You know, and I think at this point,
he’s put too much in to walk out
with the same sort of deal, you know,
he was looking at before.
What are the chances he’s overplayed his hand?
Like the economic cost at this point to him,
the loss of jobs, the loss of customers,
the loss of the value of his currency.
I mean, you add all this stuff up,
so much has been taken away.
It’s very hard to see him coming,
feeling like he can come out of this thing ahead.
And so he’s only going to keep plowing forward.
Does he face the risk of ruin, Chamath?
I mean, is this like, at this point-
Well, here’s what I will say.
In 2020, Russian GDP was $1.483 trillion.
Now, what percentage of that do you think
is actually exports versus a domestic economy?
Let’s say half, let’s be, just take a guess, right?
So you’re talking about $750 billion of exports.
So let’s just say that, you know,
between the BOJ, Bank of Canada, ECB,
and the Federal Reserve,
we all just collectively printed $5 trillion.
You can absorb many, many years of Russia’s export loss.
Now, it does have some gnarly implications.
You know, you probably have to work more closely,
for example, with Iran.
You have to get an Iran nuclear deal done.
So that we can get access to their oil, right?
So it blunts the loss of the Russian reserves,
as an example.
You know, we’d have to do some clever things
on sustainability and farming.
My point is, though,
that I think the economic calculus of this decision
is not as grandiose as it once may have seemed
post the COVID scenario where we were printing,
you know, hundreds of billions of dollars a month.
I think there’s a,
the only good news I can take from this, Ax is,
you know, the free world has now learned about
what a dependency,
like we’ve literally woken up from the delusion
that we can intertwine.
Hold on, let me just finish this one statement
and I want to get your feedback on it.
We have woken up from a delusion
that we can intertwine our economies with
rich and nuclear powered dictators in communist countries,
both China and Russia.
And now I think the great decoupling
and the great independence is upon us
with us moving semiconductors back on shore,
going nuclear, maybe fracking seems,
I think even any environmentalist will take fracking
in Europe, fracking in the United States
over a dependency over a dictator.
So is that not a silver lining here?
Yeah, I mean, look, I think it’s so obvious now
to everybody that we need to be energy independent,
that it was insane for us to throw away
that energy independence.
We’ve restricted it.
I think that if there was a bill introduced,
and I think it’s being talked about
to repeal all the restrictions on fracking,
it would pass the Senate 75-25,
meaning all the Republicans would vote for it
and half of the Democrats would vote for it.
So I think everybody’s on board now.
And there was some remarkable,
you see the tweets from Michael Schellenberger about it.
It has come out that, you know who was backing all these-
The anti-fracking, yes.
The anti-fracking environmental movement in Europe.
And they fell for it.
And they fell for it, exactly.
And the Germans fell for it and turned off nuclear.
And now all of a sudden, they’re dependent on Russia.
And he has the pretext to now invade.
Right, these environmental groups in Europe
have been useful idiots for Putin and the Kremlin.
Yeah, that’s what’s so sad.
I think I saw a tweet, it was something to the effect
that 25 years ago or 30 years ago,
Europe actually produced more liquefied natural gas
for Europe than Russia did.
And the whole thing flipped
because all these environmentalists forced Europe
to shut down. They outsourced their guilt.
They outsourced their guilt,
but it turned out that a lot of those organizations
may have been funded by Russia
to basically affect that change.
I wanted to say something, Jason, before,
you know, there’s a common thing that you hear right now,
which is, oh, economic sanctions don’t work.
And I just wanted to talk about that for one second,
which is, I think there’s a lot of people,
there was a lot of chatter
that historically economic sanctions aren’t enough,
which is why you can’t draw a very clear, bright line
between that and military intervention as well.
And I thought, and I, as I thought about it,
this is why I think you can actually fight
an economic battle and an economic conflict
without it pulling you into a military one.
And the reason is actually because of what’s happened
in the last 40 or 50 years.
You know, you have like the most critical infrastructure
in the world, I think is the financial infrastructure,
whether we like it or not, right?
Because, you know, energy infrastructure
tends to be more localized,
other forms of infrastructure are localized.
But the one real asset that is absolutely global
and universal is the financial payments infrastructure.
And, you know, what has really happened
is that you can really cripple a country or an entity
when you blacklist them from these organizations
and these networks.
And so this is why I actually think people underestimate
the severity of economic sanctions if done correctly.
And I think before, you’ve never really,
other than, you know, Venezuela
and a couple of other, you know, North Korea,
North Korea, Cuba, Venezuela, Cuba,
you’ve never really explored the totality
and the impact of this kind of sanctions
on a large global actor, which were
this is almost greater than sanctions,
you’re being you’re not allowed to participate.
It’s not even like you’re saying you can’t export this,
you can’t import this, it’s you’re now not allowed,
you have no seat at the table.
I think the crude oil example
and the airline industry example
are two incredible examples
of the ripple effects of these sanctions, right?
So again, just to reiterate,
like if you’re a European based refiner,
in order for you to go and buy that oil,
you may have, you know, a working capital line
from a German bank.
Well, that would violate the terms of that bank now.
And so you can’t go and get that, right?
If you actually have that oil on hand,
and you refine it into gasoline,
and you want to put it into the open market,
and you call Flexport as an example and say,
help me get this stuff to XYZ location
or Merced or somebody else, they won’t do it.
I mean, and you look at the tech sanctions
that have started, it sounds minor,
but you have Netflix is pulled out of the country,
Apple is not selling products in the country,
Google is starting to restrict services in the company.
And this is going to have a massive impact
on their ability to just participate in society.
They just turned off proactively this morning.
I don’t know if you saw that,
it was right as we were getting on air.
Facebook’s been banned.
Instagram is still on Twitter still on,
but the Russians now are turning off information
into the country, while every other country,
every other company is turning off their services there.
I think the global economy,
or not even the global economy,
I think Japan, Europe, Canada, America,
can collectively support five, six, $7 trillion
of subsidies to blunt the economic impact
of these sanctions.
That’s effectively shutting Russian exports off
for eight, nine, 10 years.
Think about the, so, you know, this is, that is the damage.
Any thoughts here as we kind of come to no way out here
and just the Russian economy being decoupled?
So I think that if we’re going to figure out a way out,
we need to assess what our objectives,
you know, what our objectives are.
And we talked earlier on the show
about this idea of regime change
and that there wouldn’t be an answer without regime change.
I disagree with that.
You know, just those two words, regime change,
should make everybody cringe
because regime change was the justification
for the Iraq war, for Afghanistan, for Libya, for Syria,
and every single one of those things has been a disaster.
When has the United States of America
successfully achieved regime change in the last 20 years
without creating enormous blowback?
There’s an assumption that somehow,
if Putin gets toppled by an internal coup,
that we end up with Gorbachev 2.0.
Well, maybe we do.
Maybe we end up with a hardliner who’s even worse.
I don’t, you know, I don’t.
So what should the goal be?
Obviously, regime change would be wonderful
if the Russian people chose that.
But what is the-
I’d say ceasefire.
Ceasefire and peace, right?
Yeah, I agree.
I think Putin miscalculated the resolve
of Zelensky and the West.
You know, Zelensky was like this TV actor,
He was very, before this, he was like 25% popularity.
Now he’s at 90 something percent.
I think Putin underestimated his resolve.
Would you say Putin has lost the information war?
I mean, that’s pretty staggering.
I mean, it’s pretty clear that Putin thought
he could win this information war.
This is the first meme, the first meme war.
I think it is a meme war.
I think we’re being heavily propagandized.
But the West is winning the propaganda war.
Well, it’s not just the West.
Look at, yeah, but I mean,
look at where you’re sitting, right?
Ukraine is engaged in that effort too, right?
I mean, you had the whole Snake Island thing
where basically the, you know, the Ukrainians-
Did that wind up being confirmed as fake news?
That was fake, okay?
You had Snake Island where the 13 Ukrainian soldiers
said we’re gonna-
Tell them to death off, yeah.
Bring us death rather than surrender.
It turns out they actually surrendered.
You had the old woman walking up to the Russian soldiers
Tell them to get the hell out of here.
Yeah, exactly, that was a fake.
I mean, I think this-
This Chernobyl 2.0 was fake.
Well, that was half fake.
The fighter pilot, the fighter pilot,
was the ghost of-
The ghost of Kiev.
That turned out to be a fake.
So look, we are being heavily propagandized.
Now, I don’t blame Zelensky or the Ukrainians
for trying to propagandize us
because they’re a small country fighting for their lives.
And if they can pull us into the war, it would help them.
It might also cause World War III.
Or just win hearts and minds and flip Russian sentiment.
There’s something else that’s really interesting.
I just went to the World Bank site
just to check whether the GDP number
that I just gave you was right.
And it is right, but what’s even more interesting
is that Russian GDP has actually decayed 35%
in the last decade.
It peaked in 2013 at $2.292 trillion.
And so, and all the way down to now 1.483.
So I think the point is with, you know,
all of these other things
that they’ve been having to deal with
because of their foreign adventurism,
you’ve seen a contraction of their economy already.
Freeberg, did we over, did the West
and everybody overestimate Russia’s capabilities here?
I mean, is that a possibility?
Because they seem like they’re getting beaten pretty,
they’re being fought back
at a way people didn’t think they would be able to.
First of all, I have no frigging clue.
Second of all, I don’t know like what people think
that they thought they knew or do or don’t know.
But I think importantly,
we don’t really know what’s going on over there.
You know, we are hearing stories every day
that we feel is conclusive and factual
and on the ground reporting.
And then a few hours later,
we find out may or may not actually be true.
You know, this is the fog of war.
And I wouldn’t take anything that I’m reading on Twitter
or seeing on CNN or hearing some commentator
from the United States making some comment about,
nor would I feel the same about any commentator
in the Ukraine or Russia or anywhere else for that matter.
Facts are gonna be facts.
I’m not sure facts are necessarily gonna get to us.
And so I don’t know what’s going on the ground with Russia.
There’s a convoy supposedly
that we know we can see from satellite imagery
that’s moving towards Kiev.
We don’t know why it stopped.
There’s claims by one group of people
that says they’re out of food and they’re defecting.
There’s claims by another group of people
that say they’re waiting to encircle the city
and then command pressure
and use this as leverage effectively
to try and get a good negotiated deal to exit.
We don’t know.
And so, you know, for us to be like, you know,
four guys commentating at Starbucks,
I think is a bit of a mistake
because there’s very few facts
that we can actually say is objectively true at this point.
Now, what we do know is Russia has a lot of nukes.
And so regardless of what’s going on the ground
with tactical stuff, you know,
any sort of assumption that leads to our belief
that an alternative intervention
or some other force can ultimately win against Russia
is completely false
because Russia has thousands of nuclear warheads.
And, you know, if Russia wanted to exert
its military authority over anyone in the world, they can.
And so I wouldn’t kind of take any of this stuff
that Russia is gonna lose a war, you know,
a war on the ground in the Ukraine.
I mean, at the end of the day,
they’ve got the ultimate trump card.
Well, and also they haven’t brought out the heavy,
the heavy army.
They’ve got bombers.
Yes, they can bomb Kiev into rubble.
They’ve got those bunker buster bombs.
They’ve got stuff that, yeah.
And what is the strategy here to just-
Listen, they can pull a Grozny.
They can pull a Fallujah.
I mean, look, you know, we, they, we can,
a Dresden, let’s not pretend like we haven’t done it too.
They can bomb the cities into rubble from the sky.
And they’re not, because it would be too bad.
You know, their pullback would be too bad from the West.
We don’t know.
We don’t know, but there’s certainly a strategy.
These guys aren’t a bunch of idiots scrambling around
trying to figure out what to do.
They’ve got the second most powerful military
on planet earth that can literally destroy
every human on planet earth.
They are, they are pretty smart
and they’re going to figure something out
to get themselves some sort of an advantage, ultimately.
What that is, we don’t know.
You know, we’re sitting here trying to figure out
how to play chess and we’ve never played it before.
I mean, Sachs, that might be something worth discussing.
There is a contingent that say, listen,
Putin isn’t thinking about this strictly logically.
Yeah, I understand that point of view.
You hear it a lot on, on the press.
What do you think?
Here’s what I, well, here’s what I think is,
I think Putin underestimated Zelensky’s resolve,
Ukrainian resolve, and I’d say the West resolve.
I think it would be a mistake, however,
for us to underestimate his resolve.
And that’s what I’m afraid of next
is that he doesn’t want to give up.
And listen, to go back to, you know, the Mearsheimer point.
So there’s a school of realism and what Mearsheimer says,
and he predicted a lot of this.
So you have to-
It’s amazing, yeah.
He gave a great talk in 2015.
I watched him right before we got on air.
Right, one of the ways-
We’ll put it in the show notes.
Yeah, one of the ways I assess who I want to listen to
and learn more from is when I see someone
making farsighted predictions that come true,
I’m like, okay-
Pretty good one, yeah.
You’re like, okay, this guy has a mental model
that seems to predict the world, right?
I mean, like Karl Popper said famously
that the difference between science and religion
is that science makes predictions that are falsifiable.
If you make predictions, one prediction after another
that ends up becoming true,
maybe you have a way of thinking about the world
that is predictive.
This guy, I would just say,
I can’t summarize all of his thinking here,
but I would just say,
I mean, I went down kind of a rabbit hole on YouTube
just watching his stuff.
Obviously, not all of it is right, okay?
But the media has been demonizing this guy
because for the few things he’s gotten wrong
about the situation,
instead of all the things he’s gotten right,
and if you were to do the Washington establishment
by the same standard,
they’ve gotten far more wrong than he has,
especially since the Iraq War over the last 20 years.
But anyway, the point he makes
or one of the points is,
listen, this situation in Ukraine is to the Russians
what the Cuban Missile Crisis was to us,
meaning it is not a pretext for Putin
to go in and expand his empire.
What is really going on here
is they have defined this as a red line
they see as a vital national security interest.
And so we should be thinking about them and their resolve
the way that we thought about the Cuban Missile Crisis.
So in other words,
the Russians are acting like the Americans did
in the Cuban Missile Crisis.
And remember, Fidel Castro thought he had the sovereignty,
he thought he had the right
to go make a treaty and a deal with whoever he wanted.
And he went to the,
freely went to the Soviet Union to try and make a deal.
And the Americans said, no way.
And you know, not in our backyard.
And we imposed a blockade and we were flying the bombers
and Kennedy had advisors and generals
who were willing to go to nuclear war
to win that standoff in that confrontation.
And ultimately the way that they solve the problem
is JFK sent Bobby Kennedy
to go secretly cut a deal with the Russians
to pull the Jupiter missiles, the warheads out of Turkey.
So there’s a quid pro quo.
They kept it secret for six months.
Kennedy got to declare a victory,
but the Russians, the Soviets got something out of it too.
They were able to diffuse the situation.
So if there’s any way to make a deal like that,
I think it would be a good idea.
Yeah, I mean, the reason, don’t you think the reason he is,
don’t you think the reason, Sax, that he is misunderstood
is because we are propagating democracy.
And when we do something, well, it has the shine of,
hey, we want people to be free.
We want individual freedom.
We want individual human rights.
We want individual expression.
These things are the height of human existence.
And when communist countries do it,
well, they’re trying to spread communism and authoritarianism
and reduce human’s individualism and freedoms.
And that is a valid argument.
But he says in his talks, like, listen,
you can put that aside and just say,
you know, missiles in your backyard, not good.
So this is the fundamental dichotomy
in sort of the foreign policy thinking
or international relations
is between idealism and realism.
Idealism says it’s all about values.
And so we’re going around the world.
We’re promoting democracy.
We’re supporting allies who we think will spread democracy.
There’s good guys and bad guys.
We’re on the sides of the good guys
and that’s who we support.
And we change the regimes that are the bad guys.
But the realists think of this as great power rivalry.
And we have to understand the way
that great powers have always reacted and behaved.
And great powers, whether it’s Russia or the Soviet Union
or us will behave viciously and ruthlessly
towards anything they perceive as a threat
to their national security,
their vital national security interests.
What are your thoughts on this being the moment
we make the next big transition?
We were in a bipolar world order.
We’ve been in unipolar for the majority of our lifetimes
where we only experienced the United States.
And now is this the moment we move to multipolar sex?
Where we’re gonna, or have we moved there already?
It’s a transition that’s happening mainly because of China.
So we’re in, you know, it seems like what we’re doing
is pushing Russia irrevocably into Xi’s arms.
He’s gonna be part of that.
It’s a huge mistake.
He’s part of that.
Well, I’m surprised to hear you say that, J-Kal.
Well, I said it two weeks ago.
I mean, I said, this sounds crazy,
but if we could get Putin to be, you know, in talks with us,
then he’s not in talks with Xi Jinping.
And when you saw him with, you know,
taking pictures with Xi Jinping,
that should have been a red alarm bell
to everybody that our foreign policy is not working.
Because if he’s talking to Xi Jinping, supposedly,
who knows if this is true, again,
fog of war to Freiburg’s point, you know,
maybe Xi Jinping told him,
can you wait till after the Olympics to do this invasion?
If they’re coordinating at that level,
that’s really problematic for the US.
We need him on our side.
We need to get Pakistan on our side, India, South Korea.
We need to build an alliance to deal with the eventuality
of China going into the South China Sea
and taking over Taiwan.
So Chamath, what are your thoughts on,
does this give Xi Jinping a window or not?
And is there any path to getting Russia back
in talks with the West?
Maybe he can help get them restarted
in a way that could normalize relations.
Is this, well, the real question is like,
if you’re Xi, do you look at this and say,
it emboldens me?
Or I have to be even more strategic and crafty?
What do you think?
I say the latter, yeah.
It’s the latter, right?
If Russia had rolled.
This is one good thing and I’ll sort of contradict
what I said a little bit before.
Look, I don’t, I’m not passionately attached
to either the realist or the idealist school of thinking.
I think they’re interesting.
We need to consider both perspectives.
What I would say is that the resilience,
the ferocity of the Ukrainians,
the resistance defending themselves,
giving Putin a punch in the nose,
we can all support that
because we know that Xi is watching.
And if he sees, wow,
the Russians really got a tough time with Ukrainians,
what, you know,
am I going to be facing a similar situation with Taiwan?
And what’s interesting is that the way the Ukrainians,
they basically were willing to arm every man, woman,
and I don’t know, child, but every man and woman there,
they were handing out the AK-47s.
Basically they Israelized, right?
You want to know how Israel has survived in a neighborhood
where everyone wants to kill them?
Every single adult serves in the army and they get guns.
It’s like, you know,
second amendment over there.
So I think that the Ukrainians have shown a model
that’s really based on the Israel model,
which is, listen,
if Taiwan really wants to be independent,
every adult there needs to learn how to fight
and they need to have weapons.
And that’s going to be the best guarantee.
We can be their ally,
but that’s going to be the best guarantor
is creating a credible deterrent to Xi moving on them.
I mean, do we transition to another story here?
I mean, this is one of the problems
when we’re living in these kinds of times
is that if you talk about anything other than
this horrible man.
I saw a tweet,
when all the decision trees can go to zero,
meaning that like there’s a 1% chance of,
or 0.1% or 0.01% chance of war three,
the nuclear war, then yeah,
it’s hard to talk about anything else.
It’s hard to think about anything else, so.
I watched Ozarks this week.
Is that good?
Is that good?
Ozark is great.
Jason Bateman, amazing.
Jason Bateman is so frigging good on it.
Breaking Bad 2.0.
I just started that series twice
and I’ve fallen asleep in episode one both times.
No, no, no, you gotta keep going.
It’s basically Breaking Bad 2.0.
I started season two of Euphoria.
Oh my Lord.
Oh my Lord.
That is, I will never let your kids watch it.
Oh my God.
It’s either that,
or it’s like the best deterrent.
So like you make them sit and watch it
and they’ll, not only will they never not do drugs,
but like they just won’t do anything.
They’ll just like stay in the house.
It’s basically Requiem for a Dream
meets like Disney plus afternoons.
Like these are Disney stars living in Requiem for a Dream.
Do not watch it.
I need to decompress after I watch it.
If you have kids, it’s terrorizing.
It’s absolutely terrifying.
It’s very artistic too, I have to say.
I give them a lot of points.
Should we talk about markets?
I feel like there’s a really kind of important discussion
because the markets are so volatile
during these kind of volatile information times,
times of information that’s changing day to day, intraday.
Where do you guys think about
kind of spending your time right now?
Are you kind of just putting your head in the sand
and saying, we’ll pull it out afterwards?
I mean, how do you guys kind of…
I mean, well, what’s funny is like I…
Sax is curled up in a ball.
You know, in times of uncertainty,
you actually want to be deploying.
So, you know, I announced, what was it last week?
I think it was.
The solar deal.
The solar deal, you know,
I put $228 million into this thing.
And then I did another deal.
I put 45 million bucks into this thing
you guys know about, which we haven’t announced yet.
So, but other than that,
I’ve been literally white knuckled.
I don’t like to open the stock app.
There’s no point.
Take some Dramamine before you open
your Morgan Stanley account.
The stock app.
The stock app.
And what’s so funny is like my Bloomberg terminal,
which is right beside me here at my desk,
I have not logged into it.
Put it in a drawer.
There’s just no point.
At the end of every week, I get a report, right?
Kind of like our P&L.
And I just look at the top line,
like Connor always sends me the top line.
It’s like, you know,
and the last like eight weeks in a row,
we’ve lost 1%.
We’ve lost 2%.
We’ve lost 3%.
The time that…
Sax wishes he lost 1%.
I got so drunk that night.
I was like, finally.
This is where it really does help, right, Sax,
to think in decades.
Like if you think in decades
and you’re a venture investor,
you can kind of just put this stuff out of your mind,
which is what I’m doing.
And the great thing is I’m seeing amazing companies,
Deals are taking longer to close.
People are starting to do diligence again.
And people are discussing what the right valuation
for this early stage startup is,
which is good.
I don’t know what you’re seeing
in the early to mid-stage market privately,
but I’m seeing really healthy discussions
and late stage madness is gone.
I mean, I think a hundred times ARR is over,
but no one really knows where it’s landing.
So I’m seeing some deals get done at 60 to 80 times,
but no one really knows where it should be.
I sent you guys this tweet from Morgan Housel,
who is a great guy.
And he has this fabulous tweet.
He says, it says the shock cycle.
And it’s this beautiful cycle.
Assume good news is permanent, oblivious to bad news.
Then you ignore the bad news.
Then you deny the bad news.
Then you panic at the bad news,
but then you accept the bad news.
And then you ignore the good news.
You deny the good news.
You accept the good news.
And then you assume the good news is permanent.
That starts a cycle.
If I could just put it out there,
I don’t know today if you guys saw non-farm payrolls,
but we had a huge print in unemployment,
like really great print,
meaning like a lot of employers
were able to find people to take jobs.
It was a big number.
But the interesting thing about it
was we didn’t see wage inflation tick up with it.
And if I had to look at that,
and if you actually look at a bunch of the earnings reports
that have come out in the last three or four weeks,
I actually think we’re in the part of the cycle here
where we’re starting to ignore the good news.
And we’re so negative,
and we’re so emotionally wrapped up in everything
that people forget that actually the world
tends to keep moving forward, right?
We are not in World War III.
By any measure, we are not anywhere near that, okay?
And so I just think it’s important for people
to take a step back and take a really deep breath.
But I think that there’s a lot of good news out there.
There’s a ton of good news.
And for people who don’t know the term-
And we’re ignoring it.
For people who don’t know the term print,
when we say there’s a print,
that is just a colloquialism in the financial markets
that something was formatted for printing previously
and you got good news.
So an official report is sometimes called,
we got a print.
I agree with, I think what’s going on
is there is some underlying good news, right?
But there’s this overhead of a small chance
of something catastrophic happening.
So how do you price that in, right?
It’s like a one outer, right?
Quads were set over set.
It’s a one outer to the apocalypse, basically.
If a tiny probability thing happens, the game is over.
So, you know, why even worry?
So it doesn’t matter.
It doesn’t matter.
It doesn’t matter.
The cost of your house doesn’t matter
if there’s a nuclear war.
This is the thing that people underestimate
is like, that’s not a risk
that one should be hedging in any way financially, right?
At that point, the only thing that matters
is the health and safety of your family and your friends.
But really, in your immediate family,
like, can you take care of them and make sure they’re safe?
And so, you know, if you’re an investor
in the financial markets or you’re building a company,
managing for that externality, in my opinion,
I’m not sure it makes a ton of sense
because I don’t think you can manage to that externality.
You have no impact on it.
It’s something completely out of your control.
Yeah, so I think you have to manage
to the 99.999% of normalized outcomes.
And I think right now,
there are some what’s called green shoots,
meaning like some positive news in the world
and some positive data.
By the way, the other thing that we saw today was,
or this week was Jerome Powell.
And, you know, the Jerome Powell testimony
was also in the middle of massive amounts of bad news,
some actually pretty decent good news,
which was, he said he’s gonna raise
by 25 basis points in March.
Everybody knew that, right?
So we took the 50 basis pointer off the table,
but then he was very clear
that they were going to be data-driven.
And in the language of the Federal Reserve,
what that essentially means is like,
we’re gonna be patient and wait and see.
And if you couple it with what I said before,
which is the economic cost
of these economic sanctions towards Russia
can be calculated.
And I think that we have proven a willingness
to print capital and money.
And so if you put those two things together,
I think there could be a real possibility
that Powell becomes very accommodative.
And, you know, he and Biden
and the entire administration come together
with Europe and everybody else and say,
get the money printer back going,
because we are gonna stand the line
on these economic sanctions.
And we’re gonna, you know,
sort of soft land the economy here,
because we think there’s recessionary risks afoot.
Let me just provide a little bit of a counterpoint,
which is where I’m most concerned.
We don’t know what the repercussions are fully
in a dynamical system of global capital,
of pulling out this much capital
and devaluing assets at this scale so quickly.
The shock to the system,
I don’t think has yet been realized.
And I think we’ll know at the end of this month
when books close,
what things actually do to businesses,
to swap agreements, to trades, you know,
trade balances that are outstanding.
And you could talk about economic stimulus
as being the way to solve that,
but we don’t yet know what’s broken.
And they’re like,
let me just give you guys another example.
Today, corn, I think is trading at 760 a bushel.
That hasn’t happened, guys,
I can’t tell you in how long.
This was a commodity that was trading at 350
a few months ago.
And so we’re now talking about that,
the trickle down effect of that price into the beef,
the trickle down effect
as we’re already seeing in California or San Francisco,
where the average price per gallon of gas at over $5.
The trickle down effect on purchasing behavior,
on businesses defaulting
because suddenly their counterparties dry up.
We don’t know, and we won’t know,
and it’s not just about-
Actually, we know some of those.
We know some of them,
but we don’t know what we don’t know.
And the thing I’m concerned about is this is,
imagine when I say dynamical system
from a physics perspective,
it’s like, take 100 slinkies and tie them together
into a giant graph of slinkies.
And you start punching one of the slinkies like this.
If you punch one or two of the slinkies hard enough,
you don’t know how the repercussions will cause
a slinky all the way over there to suddenly shoot up
or shoot down, but there are-
You’re also denying your ability
to change a difference slinky.
That’s the whole point of a dynamical system.
You could put energy back into it,
but we don’t know what’s broken.
And there could be something that’s irreparably broken.
We’ve gone through these things before,
and I think you’re not learning from history
or you’re at least not willing to admit it, but-
No, I think we’re-
Hold on a second.
We’ve seen it in TARP, okay?
We did not know the total extent of what happened in the GFC.
And we had to invent a financial framework
to soft land the global economy.
We figured it out.
When we went through LTCM and John Merriweather blew up-
Explain what that is.
There was a huge hedge fund in the late nineties
that basically had a massively levered exposure
to the financial markets,
to the tune of like tens or tens
or hundreds of billions of dollars.
Go read the book, When Genius Failed,
if you want to read the story.
It does a good job summarizing it,
but it’s a great story.
Yeah, go ahead.
And again, we had to step in with a governmental framework
and a broad infrastructure of actors across the world
to soft land the financial economy in a way,
not knowing what the actual, what part was broken.
So I just fundamentally disagree with this idea
that we’re running blind.
Yeah, look, we’re talking about,
I’m talking about capital and energy and food.
And some combination of those things
are going to cause some serious deleterious effects
on people and on markets.
And look, I get it, Chamath.
I know that there’s solutions for repair,
and I know that we’re going to act swiftly and aggressively.
And every time, by the way, I just want to point out,
in each of those scenarios you’ve talked about,
we’ve acted more swiftly and more aggressively
than we did in the scenario prior.
And it’s getting to the point that,
what is the value?
How much debt, how much deficit
are we really willing to take on?
Everyone obviously has these kind of
intrinsic existential questions
about how much we really can act long-term
without the dollar collapsing.
But certainly in the context of a global economy collapsing,
the dollar will always be the safe haven.
But there are other things at play here,
like, you know, the cost of gas for the average American,
you know, the amount of wheat and the amount of food
that people in Africa are going to have access to.
What you’re saying here, Freeberg,
is that some of these things we have been through,
and if you look at gas as one example,
I think you’re bringing up the important ones here,
food and energy, gas.
We actually know what happens when gas prices go up.
We saw that not long ago.
People bought more hybrids
and the miles per gallon per car.
You know, when you raise prices, consumption goes down
and people get creative.
Those are long-term adjustments, J. Cal.
I’m talking about the short-term acute effects.
The thing that America has the ability to do
is they have the ability to change the financial incentives
for actors all around the world in a split second.
And behavior can change.
And so I actually think, Freeberg,
the nuanced thing that you’re saying,
which I completely agree with,
but maybe we should say more explicitly is,
it probably is a reasonable way to manage risk
in America, Europe, Canada, Japan.
But what’s going to be very, very difficult
is the impact that this has on emerging markets
in Southeast Asia, Asia, Africa,
could be really, really deleterious for some amount of time.
And sad, and it’s gonna cause a humanitarian problem.
It’s really friggin’ sad and it’s, you know,
whatever progress has been made could be unwound.
I think you’re right.
By the way, I think that that is actually
really the risk that I think
holding the line on these sanctions really does.
It pushes the risk towards EM countries.
And then I think we’re gonna have to figure out
what our moral resolve is to go and fix those.
And that’s my point earlier,
which is we’re gonna bear the cost ultimately.
The United States is gonna have to step up
in a really outsized way to solve this problem.
And while we might not be sending troops on the ground,
we’re gonna end up paying several trillion dollars.
I don’t know that it’s gonna be
just the United States, Freeberg.
The United States seems to be working in coordination
with our allies in this situation.
We’re not acting unilaterally anymore.
That’s a good news.
We’re gonna have an economic cost, right?
There’s gonna be something.
If you’re asking me, there’s no amount of money
that you can actually put on human life.
And so if we can avoid a military war,
I just think that there’s no red line on cost there.
And so if we end up running massive deficits,
and now we’re at 150, 250, 300% of GDP,
I think that morally that is the right thing to do.
Sachs, is the world becoming more idealistic and realistic?
Let me bring Sachs in here.
Sachs, is the world becoming more anti-fragile
slash resilient, pick one of the two, I guess,
to these kind of upending events because of COVID,
because of China pulling out of financial markets?
We just went through this.
Freeberg was like, hey, this is unprecedented.
Actually, I think we have a little bit of precedent here.
We have the complete shutdown of the economy from COVID
in recent memory.
And we have China deciding that all these companies
are no longer public.
We’ve seen, they did their own economic sanctions.
They sanctioned themselves and pulled out of markets.
So what do you think, Sachs?
I think the current crisis is a reminder
that it’s not too anti-fragile.
I think we are in a transition.
The Cold War ended about 30 years ago.
And since then, we’ve been engaging
in this sort of unipolar foreign policy
where America calls all the shots.
Now the world is becoming more multipolar.
I’m not sure it’s all the way there yet.
And you have countries like Russia and China
and that’s making the world a more dangerous place.
Well, you also have the EU working together in unison,
and they seem to be,
maybe they’re gonna become a bigger actor here
because of this, right?
We’re seeing them take a bigger-
That was sort of a positive surprise,
as long as they don’t pull a Franz Ferdinand,
like Freeberg said,
and inadvertently blunder us into a war.
Okay, folks, this is This Week in Dystopian Outcomes.
No, no, let’s talk about something good.
In other good news, let’s talk about the big Cartier
breakthrough this week.
There is good news, guys.
Good news is there.
There must be.
The good news is that we’re managing crises after crises.
Freeberg, do you want to tell people
about this revolutionary breakthrough in cancer?
I mean, look, there’s just,
there was another Cartier therapy approved,
two of them approved in the last week for myeloma.
Cartier just, I think we’ve talked about it in the past.
You know, every human body has T cells.
They’re a core part of your immune system.
T cells are programmed,
so they have a sensor, you know,
that tells them where to go and what to destroy.
And so, as T cells learn what to destroy,
you know, they can be really effective
at clearing bad things out of your body,
clearing pathogens and invasive things out of your body.
And so, a few years ago, you know,
humans gained the ability to engineer T cells
by adding the genetic code to a T cell,
effectively engineering it to go after a very specific thing.
And so, the big revolution in Cartier therapies
has been in oncology and cancer.
So, you know, programmed T cells
to destroy specific cancer cells in the body
that, you know, you would historically
have had to use really difficult,
systemically challenging drugs like chemotherapies
and so on to wipe out lots of cells,
and in many cases, doesn’t eradicate all the cancer.
And Cartier turns out it can be extremely effective
at finding very specific cancer cells in your body,
and in many cases, causing complete remission in cancer.
And so, you know, there was one Cartier that was approved
that showed, I believe it was an 88 or 90%
complete remission in multiple myeloma,
which is a form of blood cancer.
So, they take your T cells out of your body,
you just get a little blood draw basically,
they go in a lab, they’re zapped with electricity,
which causes them to open up slightly
and an engineered, a little CRISPR edit happens,
and those cells are now edited,
the DNA in those cells is edited,
and now those cells know to go after the cancer target.
You put them back in your body after they grow up
for a few days, and they filter them and test them,
make sure they’re safe,
and after they go back in your body,
the T cells go to work and they clear
all the cancer cells out of your body.
It’s an incredible technology.
Cell-based therapies are unbelievable.
Is the name of the company involved in this A2 Bio?
Is that the company?
No, A2 did something else,
so that breakthrough was even more important,
I think, in the long term.
What he’s talking about is Janssen and Legend
are the two companies that basically
got approval from the FDA.
The thing with CAR T is like,
CAR T has been incredibly believed in blood-based cancers,
but that’s an entire category
that excludes solid tumor cancers.
What you’re talking about, Jason, this week as well,
what happened was A2 Bio basically figured out
how to modify these T cells in a way
where you can actually attack and target
a very specific solid tumor.
So there’s a lot more work for those guys,
but if you play that out,
now you have this incredible ability for your own body
to be trained to fight and kill cancer,
whether it’s in your blood or whether it’s the solid tumors.
Now, the price of these therapies today,
they’re charging, call it 400 to $450,000 per treatment.
And by the way, the treatment, it’s a one-time shot.
I mean, it’s like-
Yeah, they pull the blood out of your body,
and then the expensive, challenging part
is how do you take the cells, isolate them,
engineer them, test them, screen them,
make sure they’re safe.
The way that is done today
is very expensive and time-consuming
because the volume is low
and there haven’t been as many kind of engineering
breakthroughs over the last couple of years.
How long does it take, do you know?
It takes months?
It could take a week to four weeks,
so before you get-
For one person, 10 people?
Is it the equipment that’s expensive?
Oh, no, no.
Like, I actually, I invited Chamath to come with me.
We went and visited one of these labs a few weeks ago,
but I won’t get into it.
But it’s unnecessarily inefficient
in the sense that you can charge so much
because when you spend half a million dollars
to treat a cancer patient,
you just save yourself millions of dollars
in long-term care for that cancer patient.
So the price is determined by the alternative cost.
That’s how a lot of drugs are priced.
It’s like, how do you save money over the long run
for the payer, you know, the insurance company?
And so if the insurance company knows over the long run
they’re gonna pay $3 million in care for this cancer,
this type of cancer-
You save them 2.5.
They’re willing to spend half a million dollars
to, you know, to end the cancer.
Is that the right financial calculus for this, Chamath?
So here’s the thing.
So if you look at the actual cost of doing this,
there is a university in the Bay Area
that is doing CAR T therapies,
and their cost is about 40 grand.
They built their own lab to do this.
And that, by the way, is also extremely inefficient.
We, I think that over the long run,
we can get the cost of cell therapies below 5,000 bucks.
And when you can do that, by the way,
CAR T can be used not just to go after cancer,
but you can get it to go after autoimmunity.
So people with lupus and rheumatoid arthritis,
there are known B cells in your body
that are making antibodies
that are causing the inflammation in your body,
destroying your own body.
And so down the road,
we could use CAR T to destroy lupus,
to destroy antibodies,
B cells that are producing antibodies
that are, you know,
fundamentally causing autoimmune conditions,
including what we talked about a few weeks ago,
given that we now have a strong belief
that if you can get rid of the EBV,
Epstein-Barr virus from your body,
you can wipe that out.
So CAR T can in the long run be harnessed,
not just for cancer,
but autoimmunity and potentially other pathogens
in the body in a really targeted way.
And this is kind of the beginning
of what will likely be a multi-decade
kind of new therapeutic modality.
That’s, you know, accelerating.
I had a question for you, Shabazz, though,
on the pricing model here of,
hey, the way we price this is
how much are we saving the insurer?
Is that too much price optimization?
Is there a better model here?
I have no idea.
I would like to talk about something else.
Related to this, Jason,
there’s this massive patent battle going on
for CRISPR. Oh, CRISPR, yeah.
And I think it’s worth, J Cal,
if you can give just a two-second primer,
because I think we should talk about patents
just for a second.
And, you know, there are,
there’s the extreme version,
which is what Elon has done.
And then there’s the other extreme version,
which is these two folks fighting over
what could be a critical vaccine.
Obviously, Elon has gone with putting the patents out,
making his patents open source
and putting them out there
and using them as a deterrent,
like nuclear weapons have been.
But the US Patent and Trademark Office
published a ruling on Monday
in favor of MIT and Harvard over Berkeley.
The ruling cancels certain patent applications
made by the University of California and its partners
regarding a CRISPR system known as CRISPR-CAS9.
The ruling states that they failed
to provide persuasive evidence
that they got the gene editing technology to work
before the broad group did.
The central question and dispute is
which group got to the CRISPR-CAS9 tool?
Basically, the whole thing here, Jason,
is like there was a group
led by these two incredible scientists
who they won the Nobel Prize,
Jennifer Doudna and Emmanuelle Charpentier.
They’re Berkeley and she,
Emmanuelle, I think is,
she’s at a university in Germany, I think.
But then there was a different team
trying to develop a system for CRISPR-CAS9
from MIT, Harvard, at the Broad,
and they all filed patents on top of each other
and this whole thing was a thing.
You know, the big implication of all this
is what are companies supposed to do, right?
Because if you are a company that wants to build
a CRISPR-CAS9 gene editing thing,
look, there’s a lot of situations
where a single point edit or a broad edit
can have a meaningful change in your health.
So these are businesses that should exist.
You didn’t know what to do
because if you licensed the IP from the wrong person,
you’d get sued.
And many companies now are like trying to license
both sets of patents.
And I just think to me,
it frustrated me when I read this article.
And you know, this is the conversation I had
with you guys in the group chat,
is I think we need to think of
and imagine a new way for patents to work
because it shouldn’t be the case that,
you know, folks are competing
for what is really effectively credit.
And then what stops behind them
are all the commercial companies and investors
and just the normal individual day-to-day people
who want solutions to solvable problems.
But the reason it doesn’t get to the starting line
is because of patent credit
and having to deal with patent trolls.
And I just think that that’s a terrible situation
for us to be in.
Especially if it’s something
that could change the course of humanity,
almost feels like an arbitrator has to come in here
and force a settlement.
What do you think Freeberg is the right thing to do?
Obviously, we have a tradition of people getting to,
you know, monetize, dare I say.
They’re innovations for some period of time with a patent.
I have multiple businesses I’m involved in
where we leverage CRISPR.
And I will tell you that the, you know,
the group at Harvard,
so the history is the group of Harvard
and the group at Berkeley argue,
each argue that they discovered CRISPR-Cas9
around the same time,
or each argue that they have a right to CRISPR technology
based on their discoveries
that were made around the same time.
And so for years,
each of them have been starting companies
and licensing CRISPR technologies to different companies.
And all of those companies now,
including several that are public,
it turns out that if this ruling, you know,
is to be believed,
they actually have a license to a technology
that they may not actually have a license to.
So there was a company that emerged a few years ago
and actually made an open-sourced version of this system.
And so I have at least one company
in plant gene editing,
where we leverage this open-sourced version of this system.
And many more companies,
many more businesses are embracing
that open-source alternative.
I don’t think that we see this turning out
to be any different than what we saw
with the proliferation of Linux in computer software,
where, you know, Microsoft or whomever was trying to,
you know, make everyone pay a licensing fee
to use their operating system.
And guess what markets discovered?
They discovered that,
hey, if someone is able to make something free
and open-source it, everyone will embrace it.
And here we are,
where most of the internet is run on open-source software.
So, you know, I don’t know what the right thing to do
with respect to patents are,
because, you know, the truth is,
a lot of very difficult, very expensive technology,
R&D dollars go into developing a technology
that is theoretically,
someone could look at it and make a copy of it.
And so I do think that there are rights to defend
with respect to patents.
I think that there is,
if there is something that is a critical resource
that an entire industry really needs to access,
an open-source solution will emerge.
You know, the markets take care of it.
And I think we’ve already seen that with CRISPR.
So, you know, it’s hard to say.
At the end of the day,
you want to license a, you know, patent a molecule
and be the only person that can make that molecule
and make money from it?
But if everyone’s going to need that molecule
to run their business and to change the world,
someone’s going to make a cheaper alternative
or a free alternative.
That’s just the way markets work, so.
Saks would like to recite a poem for peace.
At the end of the podcast, he’s gone totally soft.
The pacifist, David Saks.
No, I’d like to address what you said
when you called me a pacifist.
Cause I think actually-
Oh my God, here we go, after hours.
This is all in after dark.
Here we go.
He’s an existential pacifist.
Go ahead, Saks.
Read your poem.
When did I become a pacifist?
Well, I’m not really a pacifist.
Look, I still believe in the idea of peace through strength,
like Reagan said, okay?
But I remember when we,
what is the only clean win
that we’ve had in a war since World War II, America has.
Clean win, straight shot.
The first Iraq war when we drove Saddam out of Kuwait.
That was George Herbert Walker Bush.
Our last conventional war.
Well, it was also the last war that we actually won.
Every other war that we’ve done
has been turned into a fiasco.
Winning was pretty easy to define, get out of Kuwait.
The other ones, we were trying to do revolutions.
But remember, everybody wanted him to go all the way
and march into Baghdad and change the regime,
And he said, no.
And he had the wisdom to stop.
And everybody called him a wimp,
but he still had the determination and the wisdom to stop.
And then what happened, his son comes in 10 years later
and they finish the job.
They take out Saddam
and they destabilize the entire Middle East.
That’s what the iron asses got us.
So what has turned me against these regime change wars?
It’s, look, when I was in college,
I thought Herbert Walker Bush was a wimp, you know?
And George W. Bush was doing the right thing
going into Iraq 20 years ago.
But we’ve seen the results.
And anybody today who doesn’t modify their point of view
on these regime change wars is a fool.
I mean, they’re not paying attention.
And so for Lindsey Graham and, you know,
these other guys out there to be,
a lot of Republicans to be talking about regime change
as something we should be seriously promoting,
they’ve totally lost the script
and they should be denounced as reckless, dangerous fools.
And look, I’ve seen it on both sides of the aisle,
but what we need to do, now listen,
if it ends up being the case
that the Russian people want to make a change,
that’s up to them.
That’s their call.
Obviously I’m not opposing something
that they might want to do,
but for the idea that that should be our goal,
that’s our end game, that’s our objective,
that is a recipe for disaster.
Yeah, we’ll just wind up getting in a perpetual war.
Then when we leave, it’ll revert.
And that’s what we saw.
It reverts back to communist or authoritarianism.
The people have to really want it.
Revolutions are hard fought and bloody.
And if you think you can just go in there
with a couple of drones and get everybody to decide,
oh, we embrace democracy from this point forward,
because you drone the hell out of the country,
is farcical and it’s proven to be wrong.
100% agreement with you.
No ceasefire is gonna be possible.
I mean, it’s gonna be hard enough as it is
to get anything remotely like a deal,
but it’s not gonna be possible
if you’ve defined regime change as your objective.
That’s way to dig Putin in.
That’s literally what he wants to…
You’re giving him all the pretext he needs
to keep this thing going, if it’s self-preservation.
All right, everybody, there’s your overtime.
Sax’s writers were freaking out in the writer’s room.
I had to get his last point in
before I pinned him as a pacifist.
There are no writers for this stuff, J. Cal,
because look, everybody on cable news
is singing from the same hymnal
and following the same script.
They’re all being the drones of war.
There’s only one critique right now,
which is we’re not doing enough and we’re being weak
and Biden needs to do more.
Not being weak.
Having patience is not being weak.
We are doing a lot.
We’re doing a lot and we should be careful.
De-escalation is the opposite of weak.
These economic sanctions are real.
We have to follow through.
And I think we have to make sure
that the economy is supported while we do it.
On that note, let’s pray for peace
and we’ll see you all next week on the podcast.
The All In Summit is May 15th to the 17th, 16th and 17th
are the two days of the conference.
Poker on the 15th, a tournament for charity,
events every night of the week.
And you can apply for a scholarship
at the website summit.allinpodcast.co
or just type in the All In Summit into Google.
It’ll be the first link.
And 400 of 600 tickets have been allocated,
either sold or for scholarships.
We’re gonna do the best we can
to have as great of an audience there as possible.
And for the dictator Chamath Palihapitiya,
the Rain Man, David Sachs,
and the Sultan of Science,
hot off the launch of Canna,
congratulations, turning literally water into wine.
David Friedberg, I’m Jake Al,
and we’ll see you next time.
Love you, boys.
Love you, besties.
We’ll let your winners ride.
Rain Man, David Sachs.
And instead, we open source it to the fans
and they’ve just gone crazy with it.
The queen of Kinwan.
I’m going all in.
Let your winners ride.
Let, let your winners ride.
Let your winners ride.
Besties are gone.
No, they’re not.
That is my dog taking a notice in your driveway.
My avatars will meet me at the…
We should all just get a room
and just have one big huge orgy
because they’re all just useless.
It’s like this like sexual tension
that they just need to release somehow.
Let your beat be.
Let your beat be.
Let your beat be.
We need to get merch.
Besties are gone.