All-In with Chamath, Jason, Sacks & Friedberg - E93: Twitter whistleblower, cloud security vulnerabilities, student debt forgiveness & more

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I want to play the theme music for this episode. Okay. Hold on one second. Here we go.

If you let the Indian government plant spies in your office, give a little whistle.

If you have too many bots, you can come up with your own metric. MDAUs. MDAUs.

When you want to incent your staff to not look at the bots, give them bonuses based on DAOs.

Based on DAOs.

Always let your bonus be your guide.

When you’re on the board and you see metrics that you don’t like, turn a blind eye.

Turn a blind eye.

Sorry. Sorry. Oh, I just got subpoenaed.

Everybody’s getting subpoenaed again.

This is J. Cal at his best.

You gotta stop.

This is going to be the story of 2022 for sure. Right before, I guess the big case between

Elon and Twitter is about to happen, I guess in October at some point, a Twitter whistleblower

has come forward and dropped a nuke into the middle of what was basically the story of the

year in business. I think the former head of security hired by Jack himself, and incredibly

well respected Peter Mudge, that co he’s referred to as Mudge, one of the most respected people in

the security industry, again, recruited by Jack in 2020. After a team of hackers, you may remember,

took over all these verified accounts, Obama, Biden, and any lines account as well. And he was

head of security until January of this year, eight months ago. And he claims, through explosive

documents, a huge document dump that Twitter execs ignored, these Twitter executives ignored

multiple security vulnerabilities. Now, why is this important? Well, obviously, if Obama, Biden

and other heads of state have their Twitter handles, they could say something that could

cause an international incident. And that’s actually happened with hacks before. He also

says they were not following even the most basic security protocols like safeguarding staff access

to core software. Of course, all this comes after there were Saudi infiltrator spies essentially

inside of Twitter. I mean, the list of things here that he is alleging is truly colossal. He dumped

these documents to the Department of Justice, the SEC, Congress and the Washington Post. He

alleges that the vulnerabilities make Twitter extremely vulnerable to foreign spies hacking

and disinformation campaigns. And perhaps most importantly to the acquisition, the complaint

also adds that Twitter’s policy towards fake accounts incentivize quote, deliberate ignorance

by under counting spam accounts and giving bonuses to execs for increasing users but not finding

bots. sacks your thoughts. I mean, on this, we talked about your subpoena or whatever that was.

I don’t have a subpoena. I’m being depositioned. It’s you’re having a deposition. Yeah, they want

to they want to depo depo me too, which is kind of amazing. But let’s let’s save that because I

think this is more more newsworthy. So you’ll recall on a previous show, we talked about this

idea that if Twitter sues Elon to go after the kill fee or to go after damages, the question

will very rapidly become about whether Twitter has a bot problem and will discovery reveal

documents that show that Twitter executives knew or should have known there was a problem.

And so I said, you know, the question will very rapidly become what did Twitter executives know,

and when did they know it? Now, I couldn’t have predicted that this whistleblower would come

forward. But what he’s basically saying is not only is there a bot problem, there’s a cover up

of the bot problem. He’s accusing the company of positively Nixonian tactics here. So just to build

on what you said, Jay cow, he said that Twitter executives don’t have the resources to fully

understand the true number of bots in the platform. And their executives are disincentivized

to count them properly, because doing so would negatively affect their bonuses. So I didn’t know

that their bonuses were in any way tied to, to this bot issue. So he’s basically he’s making

the Upton Sinclair argument that it’s hard to get a man to understand a problem when his salary

depends on not understanding it. So that’s part of what he’s saying. He’s also saying that he’s

accusing Twitter CEO Prague Agarwal directly, let’s just say these are allegations, right? These are

not proven yet. But here’s what he’s saying. Basically, he’s saying that Prague and his

lieutenants repeatedly discouraged him from providing a full accounting of Twitter security

problems to the company’s board of directors. They basically prevented him from producing a

written report. He also says that the company’s executives ordered him to knowingly present

cherry picked and misrepresented data to create the false perception of progress on urgent

cybersecurity issues. He also alleges that they went behind his back to have a third party consulting

firm, their report scrubbed to hide the true extent of the company’s problems. And as a result

of this, he’s basically saying that Twitter executives committed securities law violations

by making material misrepresentations and omissions, and SEC filings. And this is what got

Elon to to sort of commemorate Zacco’s revelations with one of his trademark memes, which was the

meme of Jiminy Cricket singing, give a little whistle from the film Pinocchio, which I think

is a cold open, which just became a cold open. So yeah, look, these are very serious allegations.

They’re not proven yet. He’s working with the same group who worked with Francis Hagen. And

I certainly questioned some of the things she was saying. So I’m not going to automatically

accept on faith everything he’s saying. But I think by the same token, because he’s working

with groups that back Francis Hagen, who was very much not on the free speech side

of this debate. I also think you can’t just accuse this guy being an Elon Stooge.

This guy is a respected cybersecurity authority. He’s one of these like white hat hackers. He’s

somebody who was an early hack. Literally, if you were to ask before all of this before he worked

at Twitter, like, who would you want as your chief security officer, you know, give me a short list,

he’d be on it for any company, right? One of the most respected people who points out vulnerabilities

or free burger have a question about corporate governance. And what seems to be a dysfunctional

relationship here, you have jack hire somebody to solve the security problems, then when presenting

to the board, he’s not allowed to tell the truth. And they, the board has given incentives to the

management team, he’s a top five, top seven member of the management team. So what’s going on here

with this dysfunction where he’s hired to tell the truth, to fix the problems, the board is turning

a blind eye to it. And maybe the management team is not giving the board the data they need to make

better decisions. Who? How do you game theory this? Yeah, I’m not sure that it’s you can come to all

those conclusions. Yeah, I’m not coming to the conclusion. I’m just my mind is wandering of how

this I read the red comes up. Yeah, I read parts of of his whistleblower. I can’t claim to have

read at all. It actually isn’t super supportive of Ilan’s case. The most problematic thing that

he points out is the following. And this is a quote from his complaint. He said Twitter quote,

already doing a decent job excluding spam bots and other worthless accounts from its calculation of

MDO. At best, he’s alleging that Twitter omitted details, not that it lied directly. So if you

kind of take that, I think what he’s really pointing his sights on are, as you said,

disclosures that have nothing to do with the spam issue, but have a lot to do with security.

And that is something that typically in a in a public company board filters up through the audit

committee typically that gets a readout, right once a quarter from the rep from the right people

who talk about, here’s our cybersecurity threats and vulnerabilities. And then there is a readout

from that committee chair to the board. And then those are noted in your quarterly

in your quarterly reports that the secretary writes down. So I think part of why this guy

may not have had the audience is, it was also written that he was a pretty terrible manager.

And there were hundreds of people in his organization who were just kind of running

here and there. And so you know, you guys have all been in the situation where we hire somebody

who is an exceptional performer. And then we miscast that person by putting them in a point

of leadership, and being a team manager versus, you know, a single kind of like, product or

engineering expert. And it seems that there was a part of that at play as well, which decayed the

ability for management to actually have enough faith and trust in this guy to put them in front

of the board. So and that’s all that’s just come up in the last few days. So I don’t know my, my

reading of the whistleblower claim is really that this is the kind of thing that companies like

Facebook and Google and others have had issues with the FTC in the past. They typically settle

those claims, they pay a fine snap. But those things take three to five years to play out. So

I suspect that this body of content more leads to that outcome, then is a smoking gun that really

helps Ilan. In fact, this, the fact that he’s actually affirmatively stating that their calculation

of MDO is actually pretty decent, actually hurts the claim that Ilan is making.

I don’t know if I agree with that, actually.

Okay, go ahead.

So I agree with with Chamath that the claims he’s making are far broader than the bot issue,

and far broader than the issues that Ilan’s raised. So I agree with you about that, Chamath. However,

I don’t agree that what he’s saying isn’t specifically helpful to Ilan’s case. So what

he said is, so this is from a CNN business article, he said, Zacco’s disclosure argues

that by reporting bots only as a percentage of MDAO, rather than as a percentage of total number

of accounts on the platform, Twitter obscures the true scale of fake and spam accounts on the

service, a move Zacco alleges is deliberately misleading. And then

what you’re saying here, Saks, just to do the math, the denominator matters here,

if the denominator was all accounts, the percentage of bots would be much higher.

If the denominator is monthly MDAOs, whatever they created, it would be a much lower denominator.

And the percentage would change, I think is what I’m just reporting what what CNN is reporting in

terms of what Zacco’s alleging, I just want to get it on the table. CNN broke the story along with

one other news, Washington Post, Washington Post. Yeah, basically, what happened is this guy got

fired in January and started working with these whistleblower lawyers, they put together a big

report. And then that report got leaked to the Washington Post, and CNN as well as people on

Capitol Hill. So that’s kind of what happened here. So CNN goes on to say, Zacco says he began

asking about the prevalence of bot accounts on Twitter in early 2021, and was told by Twitter’s

head of site integrity, that the company didn’t know how many total bots are on its platform.

He alleges that he came away from conversations with the integrity team, with the understanding

that the company had, quote, no appetite to properly measure the prevalence of bots,

end quote, in part, because if the true number became public, it could harm the company’s value

and image. So this is, again, the up in Sinclair problem that they’re

at a minimum, David, you have to agree, this guy is basically speaking on both sides of his mouth.

I mean, these are both direct quotes from his complaint. So his complaint, at best is very

confusing and a little schizophrenic. Well, it’s also just coming out. So there’ll be more data

that that comes by the way, I don’t I’m not saying that I believe him or disbelieve him. But I’m

saying if you if you look at the quotes, the quotes aren’t the smoking gun one would want.

If one was trying to look, I think we have to remember the the lawsuit has really nothing

to do with this problem. The lawsuit really boils down to one very specific clause,

which is the pinnacle question at hand, which is there is a specific performance

clause that Elon signed up to, right, which, you know, his lawyers could have struck out

and either chose not to or, you know, couldn’t get the deal done without. And that specific

performance clause says that Twitter can force him to close at 5420 a share. And I think the

issue at hand at the Delaware Business Court is going to be that because Twitter is going to point

to all of these, you know, gotchas and disclaimers that they have around this bot issue as their

cover story. And I think that really, you know, this kind of, again, builds more and more momentum

in my mind that the most likely outcome here is a settlement where you have to pay the economic

difference between where the stock is now and 5420, which is more than a billion dollars,

or you close at some number below $54 and 20 cents a share. And I think that that is like,

you know, if you had to be a betting person, that’s probably and if you look at them,

the way the stock is traded, and if you also look at the way the options market trades,

that’s what people are assuming that there’s a seven to $10 billion swing. And if you impute

that into the stock price, you kind of get into the $51 a share kind of an acquisition price.

Again, I’m not saying that that is right or should be right. That’s just sort of what the market

says. Friedberg, what’s your take on this? Do you find this person credible, highly credible? And

how damaging do you think this is to Twitter, independent of the deal to sell the company?

I think there’s two tests. One is the materiality of what they’ve reported. So

and really, that comes down to just the endow reported numbers. So if there really is some

misstatement, knowing misstatement based on what he’s saying, that’s an issue. The other one is the

duty of care, responsibility of the board, meaning did the information that he’s providing

actually find its way to the board? If it was blocked by management, you know, it’s a judgment

call on, you know, whether or not management was trying to deceive or whether they were trying to

investigate and identify more. If the information was brought to the board, and the board did not

act, then there’s an issue with the boards meeting their duty of care responsibility as fiduciaries

of the company. And that’s really what he did pitch the board at some point or explain this,

but not in writing. Yeah, if what he’s claiming did not make its way to the board,

then it’s hard to say that the board was in breach of their duty of care. If the CEO and if the if

the CEO blocked it, then there’s a question on what then the CEO can be fired, right, then there’s

a good case for the CEO to be fired. I see. So I see, you know, probably one of three scenarios

here. One is, you know, nothing happens to is that the board is actually violating their which

I doubt knowing this board. I mean, knowing who’s on this board, it’s probably more likely that the

CEO or some executives that block this information from getting to the board, the board then has to

act now that they have the information. And they say, hey, you block this information from getting

to us, we need to act. And maybe they removed the leadership that was responsible for that.

sex in terms of board governments, how much of this has to do with the fact that nobody really

owned on the board any significant equity in Twitter? Is that true?

Yeah, I mean, I think I mean, on the board was the highest, right? He owned two or 3%.

How much did silver Lake on jack on silver Lake e guns on the board? I mean, they’re

their owners on the board, right? board? Yeah, we’re low.

To be clear, Zacko doesn’t seem to be pointing his finger at the board. In fact, quite the contrary,

he’s saying he wasn’t allowed to present to the board in the amount of detail that he wanted in

written form like he wanted. So in a way, he seems to be exonerating the board, he is pointing

the finger at Twitter executives. And the timeline here is instructive. Basically,

what happened is he was hired by Jack Dorsey back when Jack was CEO. This is in, I think,

November of 2020. And at that time, Jack had Zacko report directly to him. He actually took

responsibility away from these issues away from Prague, who was running engineering,

gave it to Zacko, Zacko reported directly to him. Now fast forward about a year later.

And Jack steps down, Prague’s become CEO. And then two months later, Prague fires

Zacko. And it’s in that time period, that couple of months, where Zacko alleges that he’s prevented

from providing a written report to the board that Twitter executives instruct him to cherry pick

that they basically tried to amend this third party consulting firm’s report in order to make

the situation look better in order to hide the extent of the company’s problems. So I think this

is I think the allegations as far as they go, are mainly a problem for Twitter executives. And look,

I you know, I don’t know the truth. These things are just allegations. I think this guy is a

respected super sort of white hat hacker in the cyber community. At the same time, I don’t know,

maybe is a bad manager. Maybe there are other reasons for removing him could be a bad manager.

Yeah. And you can’t ignore the fact that under whistleblower laws,

if Twitter gets fined as a result of these allegations, he could get 30%. So listen,

we don’t know the truth of it. However, I do think that this whole thing is a windfall for Elon’s

case. Because it does seem to provide substantiation for Elon’s assertion that there’s a

bot prom at Twitter now and a cover up about it. And a cover up about exactly. Yes. And a cover up

that would basically potentially invalidate the company’s SEC disclosures on the subject.

There’s a question of law and a question of fact, with regard to Elon’s case. So in other words,

at the end of the day, what they’re going to be litigating in Delaware is a contract dispute is

Elon contractually required to close. And Elon’s assertion is I’m not because this bot issue. So

there’s a question of law where if everything Elon says about the bots is true, is he required

to close and I don’t know what the legal ramifications that are. But I think with respect

to the question of fact, which is, is Elon right about the bot issue? There’s no question that this

is a bombshell that can only help his case. By the way, to your point, the the stock was

kind of pricing in a 70% likelihood of this thing closing, if you looked at just how all this stuff

was trading, and it went down to 60%. Once that whistleblower report came out, and people had a

chance to digest it. So to your point, it definitely moved the goalposts a little bit

towards toward in Elon’s favor. There is a you know, an important thing to point out here,

which sex just touched on, there is a whistleblower program that was created in 2012.

And by the SEC, as part of Dodd-Frank, I believe, or in part of the evolution of Dodd-Frank.

And they’ve given out now over $1 billion in whistleblower awards, these awards come out

of the SEC fine. So you often wonder, like, hey, they give this huge SCC fine, who got it?

Well, it turns out whistleblowers now are massively incented. Because if you’re a whistleblower,

it’s a career ending, potentially, Jason, you’re not you’re not saying the other part, which is,

when you go to these organizations to now help develop a whistleblower lawsuit,

what has actually happened is you’re not whistleblowing, moral or ethical breaches,

you’re whistleblowing things that can come back to an issue that the SEC and the FTC can make

an issue of because that’s where the financial fines come. And that’s where their remuneration

and motivation. So for example, like you could have a company that’s illegally, I don’t know,

killing dogs to horrible. But, you know, the whistleblower claim will be about,

you know, their disclosures in a 10k of how many dogs they killed to the SEC, right? In this case,

you know, how many what did they tell the Yeah. And that’s why he gave this to the SEC DOJ. The

other interesting wrinkle here. And by the way, there’s been to the whistleblower program, I

did a bunch of reading on it this week. They also don’t disclose who the whistleblowers are. So this

isn’t a case where you have to come out like Francis did, or much did you, a lot of these

awards are being given quietly. So there’s been two rewards over $100 million. And they don’t say

what the award was based on, you know, who did who the whistleblower is, or who the company is,

they’ve been doing this in a very stealthy way. And it seems to be highly effective. The big

difference, I think, with Francis, compared to this one is Francis, just a PM, you know, who

was not a top five or 10 employee, not even close to that. This is a top five, top seven employee

who had access to the board and was giving reports to the board, at least orally. The final

point on this, I would like to get everybody’s commentary on if it is true, that they essentially

were forced Twitter was forced by the Indian government to put a government agent on the

payroll. I think agent means spy. How explosive is that? And then how many that to me,

that to me is the most important thing that is not getting nearly enough coverage. It’s like you had

a government come to a company that’s based in America. And it’s, it’s not the United States

government that did it. And basically said, we need you to place an agent of our intelligence

services inside of your company. And it seems like they were like, okay, where do you want them to

sit? Now, sax, if that’s true, with I wonder if they would be required to tell the CIA and our

government that their arms being twisted. Like, this seems unprecedented to me. And if they didn’t,

well, I think, again, this is all alleged. So but if I do sacks, what I think the bigger button

over Jason, you should also ask the next one, which is if they did it to Twitter, which is

kind of small. What about the big honeypots of users? Google, Apple, Google, Facebook,

tick tock, snap. And what about countries outside of just India? What about the United States?

No, I mean, what about the United States? Well, yeah, we have access to the stuff,

you know, through the courts, there’s supposed to be a process, there’s supposed to be the

processes, you go to court, and you get a warrant, not that it’s a high bar, but a prosecutor has to

go show probable cause and get a search warrant presented to the company. And then they turn over

the data. This you’re right, it’s explosive, in the sense that what they’re saying is that these

government agents, this is what Zacco says, according to Time magazine, the purported

agents had direct unsupervised access to internal information. So it means DMS, when the accounts

are created, who owned which account the IP addresses, that’s what I’m guessing. They had

access to which is you do not want to trust I’m guessing, I’m guessing what I’m putting in your

DMS, folks, I’m guessing what it doesn’t mean is the Twitter menu in the cafeteria. Yeah, no.

Not that I mean, not that anybody’s been to that cafeteria in three years. Anyway, I mean,

there’s literally $47. They had direct unsupervised access to the salad bar.

I think, I think, you know, basically, I think you could you have to make an assumption that

if, if governments are doing this to one company, they’re doing it to all companies.

Yeah, but you would think, right? No, but Google would put up a fight or Apple would put up a fight.

But who knows? You think they really fight when they went into China?

The opposite? Don’t you think they do the opposite?

Well, actually, what they did was there’s actually even sneaker way to do it. What Apple did when

they went there is they said, we’re not providing cloud services in China. But all the cloud services

are provided by this third party company. So then they could have plausible that that’s not what

this is about. This is about an example of how you this is I understand, but I’m asking you a

question. Do you think that foreign governments have put pressure on the largest American tech

companies to place agents? And do you think they exist in there?

They’ve definitely put to the first part, they’ve definitely put pressure, we see that obviously,

then the question is, would our would the would Apple or Google do this and not inform the

government or not put up a fight? I don’t know. Well, I think it’s fair to say that the

the Senate Intelligence Committee is going to hold Twitter and have like a closed door meeting.

And then the question is, you know, will they haul everybody else in and is just is I think what

is what is an important question is, is this a derriere kind of business tactic at the highest

levels of every company? And we just don’t know it and are typically not read into it. And we

would never know in the absence of this whistleblower thing. And my question is, do does

our government know that our companies are acquiescing to these governments?

Well, that’s been a problem for a long time, actually. So there was a op ed by a Microsoft

executive talking about this a number of months back where the argument was, well, the government

has to go get a search warrant to get your data from these companies, but these companies don’t

put up a fight like they don’t. They don’t challenge the warrant at all. And why? Because

they don’t have an interest. They have an interest in being cooperative, right? The

article is basically saying that if you’re the subject of a search warrant, meaning they’re

going to Google to get information about Jason, the government should have a duty to inform Jason

so that your lawyers can go challenge it. And that was the legal change that needed to be made.

We had this conversation, I think, last year. That is a change that should be made because

in the old days when the government would present you with a search warrant, they’d have to go to

you because all of your documents were in your possession. They would be at your office, they’d

be at your house, so they would come knocking on your door, give you the search warrant. You

could give it to your lawyer, they could challenge it. That doesn’t happen anymore. Now the government

just goes and gives a search warrant to a big tech company because your data is in the cloud,

but their argument is you don’t own that data, the big tech company does. The big tech company

has no incentive to fight the government, and they just get access to all of your data,

and you don’t even know that you’re being investigated. It’s not an argument. You agree

to that when you sign their terms of service. Yeah. The current situation is bad enough that

essentially you have very little protection and rights over your data. But what’s happening here,

the allegation is even worse, which is that government operatives are working with the

company in a way that provides them access without them even getting a search warrant.

Yeah, they always buy on their ex girlfriend, their, you know, brother in law, whoever,

they can just spy on a celebrity, do whatever they want. I’d always, I’d always assumed that

this was happening covertly, meaning like, look, if you’re a tech company, and, you know, you have

a very bright, I don’t know, PhD on a visa, and you hire that person to work in computer vision,

I’m just making this up. How do you really know that that person is not an agent of another

foreign country? And obviously, the overwhelming majority are not. But once you have hundreds or

1000s of people, you know that that you brought into your company, all it takes is one person,

you know, for example, we just saw, I think, in Apple, there were two people that were just

recently arrested for stealing all of Apple’s autonomous auto data and documents and design

schematics and all of that stuff. And one of the guys was arrested right before he was trying to

fly back to China. And so somehow they figured it out, they were able to get him he was not a US

citizen. But then another guy that did it was a US citizen, but both were of Chinese origin,

it just goes to show you that the covert nature of industrial espionage is probably at an all time

high, right. And I think that’s, that’s a risk that every company has to manage and do the best

that they can. But this is different. This is an overt risk. This is just an overture and saying,

open the door, give us a badge, we’re coming in. And this is why I think you have to deal with this

case very delicately in a different way. Yeah. And for people who don’t know, Google does what’s

called the transparency report. Twitter also has one. So they do try to put out by category search

warrants, subpoenas, etc. Exactly how many warrants they’re getting. And the tech companies are at

least trying to be transparent about it to the extent they can. But this is going to lead to a

lot of people moving off of the cloud, I predict, we’re seeing. And in fact, Apple is now storing

your data, and a lot of your privacy information locally on your phone. And if it’s encrypted,

they can’t hand it over, as we saw with the terrorist shooting, and it was at San Bernardino,

where they couldn’t unlock the phone, and they went to the Israeli spy company to do it. So

you know, I think I think the companies here, at least in the United States want to defend their

users. But this is could be make people rethink the cloud. And I’ve seen a couple of pitches from

startups. I think you’re confusing issues. Of course, they’re going to try to defend their

users in the United States. But what if you have if you let somebody into a different country? And

that? Oh, yeah. It’s not as if it’s not as if servers are not accessible. Yeah, I’m not confusing

the job. I’m just talking about the United States here for a minute. I do think you’re going to see

people buy many servers to put or rent their own cloud services that are encrypted and impossible

to unlock. And so look for that trend to come or more companies to encrypt it and say, we don’t

have the keys to map. So isn’t it crazy that like, you know, we spent the last 20 years pushing the

cloud and the thing that may actually unwind the cloud is just the utter lack of privacy that we

all have now. I’ve just had like, we’ve just created these massive honeypots, where you know,

any state or non state actor can essentially just have an incredibly detailed understanding of who

you are. Yep. And why? Because we weren’t willing to pay five bucks a month for storage.

Everything needed to be free.

Isn’t this part of isn’t this part of the

philosophy behind decentralized services? That, you know, crypto is distributed? Yeah,

I mean, I don’t like using that term, but just decentralized services, where the data doesn’t

sit on some centralized enterprise controlled servers. But the data is distributed either on

a chain or in your phone or in some way. You know, your identity, your information, your content

isn’t isn’t centrally controlled. And that that fundamental principle may actually come to kind

of bear over the next couple of years and decades that a model Yeah, that model is more appropriate

for us for me. And therefore, the services that are built that way are going to win in the market.

The challenge is ultimately how do you finance those because those services,

right? I mean, they don’t have to pay, you have to pay for them, you know, if you’re willing to

pay $10 a month for your privacy, consumers are doing it for you. But I use the brave browser

and VPNs. And these are becoming a major category. You hear it on podcast advertising all the time.

DuckDuckGo, brave VPNs, VPNs aren’t just for hackers anymore. They’re like real,

like, you’re bringing up something that I think that’s really important, which is that, you know,

over the last 20 years, for all of us, we’ve been building these products on the internet,

we’ve actually done a little bit of a disservice, because we’ve basically created these expectations

of consumer surplus. And we’ve never given people true sets of trade offs. We’ve always said, Oh,

you’ll get more. And it’s essentially free, because we’ll back into an advertising model

that that supports us being able to give you more and more for free. But it turns out that it has

some real consequences. And I do think that not enough of us actually understand why privacy is

important. But when you start to hear these examples, and it’ll be important to see what

what the true details of this Twitter situation are. I think that the pendulum starts to swing

in the other direction where we say, Okay, you know what, I’ll eat out at Chipotle one night

a week less. And instead, I’m going to reallocate that money to making sure that I have, you know,

some amount of privacy, you can do it for 25 bucks a month, you know, two or 300 bucks a year,

which is a big number for, you know, maybe the average Joe, but it’s, it’s, it’s, it’s being

packaged and bundled right now. So you’re seeing the VPNs, the anonymous search engines,

the browsers all starting to bundle, they’re bundling a set a suite of services. And so I

think this is upon us now and consumers get it, and they want to protect their privacy. So and

Apple has said, this is going to be our reason for you to choose our cloud is that we’re going

to put the local settings, we’re gonna put your data on your phone encrypted, we don’t have access

to it. Use use Apple for this reason. Of course, they’re also building a multi billion dollar ad

business at the same time in Apple News and their app store. So there’s that I guess we should move

on here. We’ll we’ll see what happens with this. The other big news story that people are talking

about this week, and we talked about I guess last year was student loan debt relief. Interestingly,

about 85 days before the midterms. Joe Biden has decided to unilaterally give 10 to 20 k of

debt relief to people who have student loans, you have to have under 125 k in yearly income as an

individual to 50 as a household. And the student loan pause program, which happened during COVID

has been extended to the end of this year. I’m not sure why. No, that was about they explained

why. Apparently, it takes four months for them to turn on their COBOL written software that runs

these loans. Mighty change takes four months gonna take it’s gonna take four months to restart the

software that that calculates your loan balance and is able to print a bill. We’re so incompetent.

Okay, anyway, you have to apply for this. And as we know, student loan is student loan debt is 1.7

5 trillion. This is gonna cost us another 300 billion. Can’t imagine what’s going to happen

with this 1020 k people buying NFTs and stocks and housing and we’re going to hit the I guess

we’re going to Bloomberg Bloomberg had a report that said that, look, we we passed the inflation

reduction act. We talked about it last week. But one of the key pillars of that is that there’s a

300 billion of expected revenues coming in. And we essentially turned around and just gave that

back to a very, very small segment of the American population. Bloomberg’s analysis was

that it’s going to create somewhere between point one and point 3% extra inflation on top of all of

that. And so you know, you really have to ask yourself like what, what was the White House

trying to accomplish? I think number one, they made a campaign promise. And so you know, I think

Biden needed to make sure that he fulfilled that. But nobody was really happy, right? The

progressives wanted something extreme. Everybody else said, you know, this is not really the right

thing to do. Because it doesn’t really solve the the the root cause of what we’re dealing with,

you know, if it would have been much better if you’d said, Hey, listen, you know, we’re going

to make this stuff expungable on bankruptcy, that would have been really useful. What happens if you

actually tried to, I don’t know, you were from the inner city, and you worked your ass off,

you became a doctor, you have 300,000 in debt. But now you’re a, you know, a resident, and you

make 126,000. Well, now you’re, you know, you’re kind of SOL here. So there’s a lot of folks

that they probably wanted to wanted to help that they didn’t help. Then there’s all the blue collar

folks who are like, why, why this giveaway only to these folks, then there are the people that

paid off their loans thinking, why did I pay my loans off? Then there’s the incentives that it

creates for colleges, which is, well, I’m just going to keep jacking up tuition, because if

they did it once, they may do it again. So all of these things, I think are sort of a little bit of,

you know, it’s a little bit of a head scratcher. And then the last thing which we can talk about

at the end is, I don’t think this is what gets people out to vote. And I don’t think it’s what

people care about ultimately at the polls, which if there was a political calculation to make,

that’s important. And specifically, when you look at what happened last night in a bunch of these

districts, every progressive candidate got absolutely shellacked, they lost across the board.

And so the progressive talking points around this stuff, fundamentally, when push comes to shove,

doesn’t work for democratic voters. And then second, is there was a really hotly contested seat,

which was a democrat versus a republican. I think it’s Pat Ryan, versus this guy,

Mark Molinaro, the republican, he was leading the entire way. And then this guy 151 49. And this is

a very centrist down the middle. Damn. So all the signs are like, this may not have been the smartest

thing to do. But I don’t think Joe Biden had a choice because he made the promise and he had to

live up to it. Freeberg, is this a fair thing to do a smart thing to do a cynical thing to do to buy

votes? Where do you fall down on this issue? This is absolutely moronic. I think that the

fact that 8 million households are eligible for this relief, and 10 to $20,000 is relief

is provided to a minority of Americans is exactly what Chamath said, which is kind of distorted

politics at its worst. There. This is a $300 billion bill to the US taxpayer. And the ultimate

beneficiary of that bill, while we all might want to say it’s the people that are getting debt

relief that have taken out these student loans, that money was transferred to somewhere. And you

know where it was transferred to university endowments, and the profit and the pockets of

for profit educational institutions. If there were a free market for education in the United States,

and the government was not involved in the process of funding and supporting the educational

infrastructure in this country, individual citizens would have the right and the obligation

to make decisions about whether or not the money that they’re spending on tuition

actually has a positive ROI for them. By spending 10,000 or $100,000. Am I going to make more than

that much money back when I graduate. And unfortunately, we’ve lulled our citizenry,

we’ve lulled our country into complacency, where that decision and that calculus is no longer

required. Because Uncle Sam is there to give you all the money you want to go to college.

And the hungry money hungry institutions that are there to educate you are taking that money,

putting it in their endowments or in the pockets of their shareholders. And at the end of the day,

it turns out that that decision may not have been the best decision. And we’re no longer holding

ourselves individually to take responsibility for the decisions that we’ve made. And we’re creating

miss incentives because of the government programs that have been created by telling people

you need to get a higher education, the government is going to pay for it for you. And it doesn’t

matter if it does or doesn’t work. Because at the end of the day, if it doesn’t work, we’re just

going to pay it back for you anyway, we’ll bail you out. And there’s a middle class in the United

States of America that is going to end up paying the tax bill primarily because that’s where most

tax dollars come from, for the minority of people that made a bad decision. And it’s not necessarily

their fault. They made that decision because the infrastructure in the system was set up to tell

they were duped. Yeah, go to college, get a good degree, it always works having a good life, you’ll

make more money. And the and the reality is that they aren’t and that they don’t the ROI for many

of these degrees has been negative. You make less money than you would have if you were actually in

the workforce, earning an on the ground experience and progressing your career. You do not need a

degree in philosophy or history or German studies to be able to go and be effective in the technology

workforce or in the services workforce. And I think that we’re seeing that play out. The biggest

challenge now is if we’re going to provide this loan relief, and not reform the educational

infrastructure and the and the requirements for whether or not an educational system is eligible

for support from the federal loan program, we are not actually solving the fundamental problem.

We are keeping this gravy train running. And we’re not actually getting to the root cause of

where this money is flowing. And this is exactly what happens. I will rehash my point that I’ve

made 100 times at the end of empires, everyone sees that the money train is leaving the station,

and everyone jumps and grabs what they can. And that’s exactly what’s going on. We think that

we’re a rich nation, but we’re becoming complacent. And this is unfortunate. And it’s a really sad

sign. I think we need to fix this educational infrastructure, we need to make eligibility

requirements for whether or not loans are actually going to have a positive ROI for students.

And then individuals ultimately need to be educated on that and made held accountable

to whether or not they’re making the right decisions for themselves.

Sach should each American pay $1,000 to let these 8 million people off the hook,

because that’s what this is going to cost.

No, of course not. I mean,

if people say I don’t like you, I just gave you the softball of all softballs. No, I mean,

look, I think this is an issue where all four of us are on the same page. I agree with everything

that Jamal said and what Freeberg said. I mean, this bill is unfair, or it rewards

relatively well off college grads over working class people, it’s going to add 300 billion to

the deficit. I mean, Joe Manchin should feel like a sucker right now, because they just spent

the 300 billion of supposed savings that he just agreed to.

Just to add, it’s unconstitutional. I mean, the Constitution expressly says,

no money shall be drawn from the Treasury, but in consequence of appropriations made by law.

So, I don’t understand how Biden can even do this by an executive order. I expect this will

be challenged and taken to the Supreme Court. And I think there’s a very good chance it’ll

end up like Biden’s other executive orders that were ruled unconstitutional. Remember,

there was the vaccine mandate that he tried to do, and there was the eviction moratorium that

he tried to do, and they’re both ruled unconstitutional. I think there’s a good

chance that this will also be ruled unconstitutional. And like you guys mentioned,

it’s inflationary. I mean, these are basically STEMI checks, which we don’t need right now,

and it’s going to make tuition go up, because the more government subsidizes something, the more

those providers have an incentive to raise the cost. So, this is just a jump the shark moment,

I think, for policymaking. The question is, why are they doing it? And I think it really speaks to

the nature of the Democratic Party today, which is the Democratic Party has shifted from being

a blue collar, sort of more economically populist party, economically left party,

to being a professional class that is college educated, culturally left, more woke party.

And this is the ultimate example of that, where the Democratic Party is basically

passing this payoff and giveaway to their sort of woke college graduates at the expense of their

blue collar, the blue collar part of their coalition. And, you know, a Democratic political

scientist that I like to read, Roy Tushara, just today, he had a blog post called the

Democrat Shifting Coalition, where he pointed out that if you look at polling, if you look at the

generic ballot among white college graduates, they favor Democrats by 12 points, whereas the white

working class, which is to say non-college voters, they favor Republicans by 25 points.

So one of the biggest gaps in the electorate is college versus non-college. That is

the fundamental gap. It’s bigger than even, you know, than any other gap, than racial gaps or

anything like that. This is really the key gap of the electorate. And this is a payoff

to the, basically to the foot, the new foot soldiers of the Democratic Party. If you think

about it, the old stereotype of a foot soldier of the Democratic Party would be a union

representative. They were the ones getting out the vote. That person has been replaced with

sort of a woke college graduate who joins the Democratic Socialist America, and they go out

and they’re the ones pounding the pavement and doing the ballot harvesting. So there’s been a

real change in what this party is about. And I think that’s the explanation for why they’re

passing this. The NFA’s… Chamath, and then we’ll go to you, Freeman. The NFA’s from Sarah

Lawrence College have taken over the Democratic Party. Yeah. Well, let me ask you guys. Let me

ask you guys a question. Yeah. When you guys graduated, everyone went to undergrad. Chamath,

you went to undergrad in Canada, right? I have no grad degree. Right. But when you guys graduated

college, what do you think the ratio 80-20, 90-10, 50-50, 0-100 was the first two years

of experience you guys had in the workforce versus the education and knowledge you garnered

in college? 90% workforce. 90% workforce. First time I went to school at night, so I was working

at school. 100 and 0. I went to a school, University of Waterloo, that has a program

called co-op, where you have to alternate school and work. It takes an extra year to graduate,

but you end up getting 24 months of full-time work experience. So it was the same. And you

graduate with a lot less debt. I graduated with half the debt I would have otherwise.

Zacks, I mean, do you feel the same? I mean, you went and got a law degree. That’s different.

I mean, look, I think that it used to be the case that people would go get these degrees,

and they would take out these loans because there was a perceived ROI of getting this education.

And I think one of the deeper issues we have today is it’s very unclear what the ROI is. I mean,

what is the return on getting a degree in social studies or art history, or frankly, some woke

studies at one of these prestigious universities? Their graduates go out, and they’re not

especially qualified for a higher-paying job. And actually, I think one of the really revealing

parts of this executive order is not just the debt forgiveness part. We haven’t really touched

on it. There’s another provision that caps repayment levels. So basically, it says that

the monthly payments on undergraduate loans be limited to 5% of monthly income. Now, who is that

the payoff to? That is the payoff to the art history major from Amherst who ends up being

a barista at Starbucks, or the Democratic political operative who works for the DSA

gathering votes. I mean, that is who this is a payoff to.

Or the RNC.

Let me give the counter argument to you, Saxon. I want to hear your response to this. So the

counter argument is, hey, listen, the airlines got bailed out for a trillion dollars, cumulatively.

2008 financial crisis, 700 billion or something to that number.

I’m going to respond to this.

There is a caveat to that, which is we actually made money on that bailout.

I’m gonna respond to this. Yeah.

Okay, great. And then number three, hold on. And number three,

me to airlines, banks, and then the Trump tax break 1.5 billion. So why can’t a bunch of students

get but 300 billion? That is the counter argument. Everybody, we don’t complain when,

you know, rich people get bailouts and the rich corporations and airlines do. But now

we’re suddenly complaining about this little pittance here. What’s your best response to

that, Freeberg? I’m not saying that’s my position.

Larry Summers, former Treasury Secretary of the United States had a tweet storm about this. And

he said, you know, the student loan issue arouses passion. Here are some observations and some

responses. There is no analogy with bank bailouts. Student loans are grants that cost the government

money. The bank bailouts were loans at premium interest, in which the government actually turned

a profit. And it’s important to think about all government services, being infrastructure funding,

where you are funding some underlying tubing or mechanism that allows society and the economy to

progress versus making up for the dollar mistakes or decisions that were made in the past. I also

have issues not just with this, but with the issues of people buying homes in coastal cities,

that they get bailed out at the price of that home at the fair market price when a hurricane hits.

Because they paid a premium, taking on the risk of a hurricane or a flooding event hitting their

home. Why should the US government and the US taxpayer come in and say, you know what, I’m going

to reimburse you for the full value of your home, which frankly, should have been 50% of what you

paid for it, because it’s sitting on a coastline. And that’s a big problem that we generally have,

is we try and use the government as a system for providing bailouts to make up for past investment

mistakes made by individuals and businesses. And I think that there’s a very clear distinction that

you can make when you decide whether or not a and we use the term bailout anytime we’re spending

money. But the reality is, if you’re making an investment that has some payoff for economic

growth, and for people and for this country to progress in some measurable way, that is a good

way to assess whether or not that is a reasonable investment versus saying, you know what, I’m

covering someone else’s liability. And when you do that, we’re actually burning money. And we’re

putting ourselves deeper in a hole as a nation and making it harder to do the former to make

the infrastructure investments and make the investments that allow us to move forward.

And I think that that’s a really good way to clarify these things. And frankly, the list of

things that people say, this is fair, this this is not fair, yada, yada, go down that list and ask

yourself that question. Is it a positive ROI to progress our country forward? Or is it a bailout

for people that had some liability they took on that they can’t cover. And I think for all those

things that are unfair, a really important point, we cannot get caught up in the endless cycle of

making up for other people’s unfair benefits that they got from this from this government.

Because at the end of the day, that’s a road to nowhere, we will burn through everything we have,

and everyone will scramble for money. And that’s the state that we’re in right now,

where everyone’s raising their hand. And they’re seeing $800 billion bills, $600 billion bills,

COVID relief, pandemic relief, PPP loan relief, and everyone says, Well, what about me?

And at the end of the day, everyone’s what about me is going to drive us into an infinite black

hole that we will never get out of. And we have to change our mindset and take individual

responsibility and recognize that the dollars that we’re spending have to have an ROI for

progression of us as a whole. And this is a really dangerous place that we’re in right now.

So if the if the education comments, okay, can I make sure you make sure I was the last question

to sex? Am I too monologuey today? I feel like I’m very passionate. No, no, you’re doing great. I

mean, the fact that you’re passionate about something video game. Yeah, that almond milk

gave you a little make those cashews. Maybe four cashews going forward. I mean, this is really bug

this guy’s this stuff really bugs me. I’ll be honest. Yeah, I’m like, dude, like, this stuff

just makes me feel like what are we doing? It’s just did you put chia seeds in your? Yeah, that’s

it. It wasn’t the goji. Was it the goji berries? The goji. Very easy on the goji berries. That’s

a superfood right there. If you if you have if you have chia seeds in the morning, this is a

huge BM that’s about to hit. It’s just you’re just waiting for the wave. Yeah, yes. I mean,

for sure. I have two comments. Comment number one is, I think the thing that shows that this

could have been better is that it was completely silent on the ability to expunge your student

loans in bankruptcy. The ability to discharge that is the single biggest change you could make

to the system to be fair to everybody and introduce a better ROI risk scoring calculation

mechanism. Why? Okay, so great. So this is an agreement, but go ahead and explain it.

Okay, in all debt markets, right, whenever you lend money, there is an assumption of risk that

you’re taking. And that fits on a curve of highly likely to default, zero likelihood of default.

And that manifests in a risk scoring. So FICO score, but in the debt markets, right. And there’s

these companies that provide that Moody’s and S&P, they say, you’re an investment grade debt,

you know, you’re a triple A plus, you’re a junk debt. So you’re, you know, you’re a triple B

minus or whatever. And depending on where you are, you pay different rates. This is the same

in car insurance. It’s the same in home insurance. It’s the same in health insurance.

But in all of those cases, if you go upside down, you can declare bankruptcy and you can

discharge those debts. Here, we don’t have that idea. So if you go bankrupt, for whatever reason,

this debt will stay with you forever, which is deeply unfair. Second is if you actually flipped

it, and you could allow it to be discharged, then the companies that provided these loans

would be forced to risk score you. And the reason why that would be so powerful is that that would

then create the forcing function for universities to actually deliver what they promise. And so who

do you think is really against the ability to discharge in bankruptcy? It’s the universities

and the university endowments. So you know, if I were progressives, the thing that I would have

pushed more than a handout to a few people, which by the way, didn’t even, you know, really scratch

the surface of the debt that they had anyways. And it also served to piss off everybody else,

I would have focused on this bankruptcy issue, because that is a meaningful, lasting change.

And the second is why don’t you go and actually get a large portion of this money from all these

university endowments, because the longer that these folks run what is effectively a multi trillion

dollar asset management business, they’re always going to treat education and the ROI that comes

from it as a second class citizen. Okay, and that is what I think is wrong. And if you were to just

fix this one thing, and then even the threat of actually confiscating some of the $50 billion

that Harvard has, or the $49 billion that you Timco has, you would start the UT system as you

would start to see the seeds of change where administrators would think to themselves,

I have to deliver something of value. Because these kids are getting loans, they’re going to

be risk scored. And I don’t want to be the person that’s like a low end borrower, right? I’m not

serving junk paper to the market. I want to serve people that are going to go and really drive a

huge ROI. So then sacks, you’d have an alignment between the people giving the loan and perhaps

the value of the degree. And so you could say, Hey, we’ll give loans to stem degrees at a different

rate, or a different number of them or a different amount of cash or a different interest rate,

then we would for I don’t know, you’re getting a degree in philosophy or like I did psychology,

right? They just give a different one based on the outcome. That makes total sense to you. Yes.

Yeah, I, I’ve said, well, for a long time that we should be allowing student debt to be discharged

in bankruptcy, just like any other type of debt, just like credit card debt, just like other types

of debt. That’s right, that would create some risk to the underwriter, so that they would have

to actually assess whether this person getting that degree would be able to repay the debt.

But you have to ask the question, is it a bug or a feature that they’re trying to remove market

forces. And I would argue that this is deliberate that progressives in the Democratic Party

don’t want there to be accountability for what you learn in college. Why? Because as I mentioned,

it’s these colleges that are putting out the foot soldiers of the Democratic Party. I mean,

listen, there’s a 37 point gap in party preference, just based on one variable, which is whether

you are professional class or working class, meaning college degree or no college degree.

And that spans across different racial groups and other party lines. So the fact of the matter

is that if you go to college and get a degree, you are much, much more likely to become progressive.

Now, why is that? I think it’s because a lot of these colleges have basically become

re-education camps. I mean, these are the woke madrasas of, uh, of cultural, of cultural

That is a great quote. Wow. A woke madrasa. It’s kind of like Harvard has become like

Zalcada. Who wrote that one for you? I see that. Yeah. Yeah. In fairness,

came up with that line. But look, these places are woke madrasas and what do they do? They

graduate these people. They graduate the new clerics of our woke theocracy. These people

go on to become the enforcers. They become suicide bombers. Yes. Exactly. It’s not,

it’s not like violent like that, but listen, we, we look down on some of these theocratic

societies and we don’t realize how like them we are. I mean, look, these kids who graduate from

these woke madrasas, they go off to become the speech police. I mean, they go enforce

community moderation at social networks. They become the foot soldiers. All right,

let me just make a final point. Let me say one thing. It’s true, right? How else did you explain

that 37 point gap? Okay. So if you’re the democratic party, listen, if you’re the democratic

party, which is run by woke progressive political operatives, why would you want to defund the

factories that are brainwashing more young students to basically join your ranks?

Okay. I want to say two things. I want to say two things. One is I think that the university

and the college degree has been used as a heuristic for progression out of blue collar

to white collar. It says, if you get a hollow and J Cal, you, I know you can speak to this

because you know, you come from a family that, uh, that works blue collar and you know, you got

a college degree, but I think there is this, um, uh, you know, kind of assertion in the United

States and has now become one could argue a meme that if you get a college degree, you’re no longer

blue collar, you’re now white collar. And the reality is that the quality of that degree varies

greatly based on where you go, the major and the experience you get to accompany that degree.

And as a result, you may not necessarily transfer from blue collar to white collar,

but you have the degree. You say you’re now white collar, and then you’re working a blue collar job

with $120,000 a debt. Um, and so that, that heuristic isn’t true. And what we need to examine

is why that heuristic is no longer true and what we can do about it. Secondly, secondly,

I do want to make a defense for college. I think that there, there is a incredible benefit

to broadening individuals, exposure to topics, research, um, and areas that they may not have

naturally been interested in, or that they will not necessarily get trained in. And there’s an

important role that that educational infrastructure has in allowing us to be a more enlightened

populace, meaning we can understand history. We can understand philosophy. We can understand the

things that shaped our, our world and our livelihoods and what makes us who we are today.

And we can understand the sciences and the maps that affect us. So we can better understand the

world and the people around us. So there is a role, but the real question is how do you integrate

that educational role into a technical training program or into a real world development program

skills that, that, that basically make an educational system more than just a checkbox

that doesn’t actually do anything for you, but gives you that exposure accompanied by,

and maybe that’s the requirement with, you know, with federal loans is that there should be some

skill or some, I think the minute I think the minute I don’t want to lose the important breadth

of exposure that college is meant to bring to people. Yes. And then that’s valid. Go ahead,

come off. And then I’ll wrap up my final thought. No, I was just gonna say, I really think people

do not understand how, how meaningful of a change it would be if you were able to discharge your

student debt in bankruptcy, it is the most powerful market function we could create to

make these universities more accountable. And I think if you guys look at my annual letter,

I put a chart in there. But, you know, part of the problem that we have in these universities,

these leading universities is that these have become graveyards. Okay, there is a gerontocracy

that runs these things with an iron fist. And as these folks have stayed in these jobs for

enormous amounts of time, now 4050 plus years, the average person is in their mid to late 70s.

Now who are who are the administrators of our leading institutions, they are focused on running

up endowments, and they are focused on the power and the influence that comes with their position.

So I implore anybody who has any ability to to actually achieve this change, there should not

be a single logical person that should not support the ability to discharge student debt

in bankruptcy. And you will identify the insider establishment by those that try to stop you,

you will expose them 100%. And I just want to put a closing thing here for the people listening who

have young people making these decisions. When we all went to college as Gen Xers, college was 910

$11,000 a year in tuition. And if you came out with 10 or 20 k, and you had an average job or

salary of double or triple that when you graduated, it seemed like a good deal, the ROI broke. Now,

market forces are at work here, I just want to point out two of them. Number one, there is a

website grow with Google, you just look up right now, they’re allowing people to get professional

certificates. And this is free. And if you could pull up grow with Google, they’ve identified

five different paths to jobs. One of them is digital marketing and e commerce ones it support

data analytics, project management and UX design, they have essentially looked at what’s needed in

the world and aligned a three to six months online course for fucking free, that’ll get you a job.

And you if you have executive function, the ability to sit down, shut up and learn can do

this first before you make the decision to go $100,000 in debt, and then get a $50,000 a year

job. Here are these jobs average, you know, 60 7080 k a year, and you can do it for free. The

next piece that the private market is doing you and I looked into this Chamath actually together

ISA income sharing agreements, we were lucky enough to invest in a company called Maritas,

they are providing ISA is for a college Colorado Mountain College for nursing. What this means is,

they will give you your tuition for free. It’s educate now pay later. If you go to one of these

colleges for nursing, you get educated and then you pay it back and you’re capped at paying back

like two times whatever the loan is one and a half, whatever the college decides, but they take

the risk as opposed to Harvard with 40 billion that takes no fucking risk. And so the free market,

I think can also solve this, but you have to sit down with your kids and say, let’s have an ROI

calculation at 20k in debt, you know, okay, fine, you got a philosophy degree, by the way,

Saks final question for you. I posted this thing in the group chat. But what do you guys think

about this? You know, Republican tidal wave becoming a Republican ripple? That’s what

Yeah, that’s, that’s what that’s it was. It was an odd set of outcomes, don’t you think for

question? I mean, Biden, look, Biden has had a good run over the last few weeks.

There’s my audio cut out one more time. So I’ll say it again. The political report

says that the red wave looks more like a red ripple.

No, I think I think it’s right. Well, look, I think a couple of things happen. So

first, Biden has got some wins legislatively, I don’t think it’s good policy. I don’t think

this executive order is good policy. I don’t think the 750 billion of climate that pretends

to be an inflation Reduction Act, I don’t think that’s good policy. But nonetheless,

he has delivered some goodies for his his base for his donors. And that has basically ameliorated

the story in the press that Democrats are in disarray. So you’re not hearing that. In addition,

I think Biden’s got two things going for him, Dobbs and jobs. I mean,

Dobbs, there’s no question Dobbs has helped the Democrats quite a bit.

Certainly has motivated their base. And then the jobs report has been strong. Look, I think

overall, the economic data is mixed. Real wages are not keeping up with inflation. But jobs have

so far been strong. So yeah, there’s no question that Democrats are in a materially better position

they were in June, when it looked like a tsunami. That being said, the election still 10 weeks away.

And I think we’ll have to see what happens. And I think the economy is still in a pretty

fragile state. So 10 weeks is still a long time. But yes, you’re right. Yeah. So where things are

looking right now, things are a lot better for Biden. And by the way, I do think the Republicans

have some issues with candidate quality. And so there’s a couple of races that, you know,

should have been more slam dunks that are not. But what was the first word you used there? You

said Dobbs and jobs? What was the first word? jobs, abortion? Ah, the Dobbs case? Yeah,

got it. Got it. Okay. Okay. I just didn’t hear it perfectly. Weren’t a lot of these wins for Biden

bipartisan? Well, no, the Inflation Reduction Act was passed on straight party lines. This

this college loan forgiveness is something they can’t even get through the Senate. It’s being

done as an executive order. The things that were bipartisan, hold on the things that were bipartisan,

there was that chips act, where they got some votes. That’s great. And then there was the guns

bill. So yeah, look, he did get some bipartisan wins. There’s no question about it. I think the

Republicans, I think the Republicans got hoodwinked. Basically, the Republicans foolishly

went along with infrastructure and with the chips act, they should have forced Biden to use up

reconciliation on one of those bills, and then they wouldn’t be able to get through the 750

billion Inflation Reduction Act. So Republicans, you know, as much of a sort of master strategist,

as McConnell is reputed to be, they really got snowed on this one.

If it’s possible for somebody to masturbate themselves from the inside out, Jason’s doing

it right now. No, no, no. There’s a reason why we do this from the chest up. Okay.

I think what’s likely to happen in November is still that the Republicans win one of the chambers,

probably the house, I think the Senate is still up for grabs. I don’t think it’s over.

I think that’ll be important because Biden won’t be able to pass some of this legislation that’s,

I think, destructive from a deficit standpoint, from an economic standpoint. And we’ve talked

about on this pod, I don’t think you guys are too excited about most of the legislation he’s

passing. So quite frankly, I’m just hoping for gridlock. I’d like to get back to a situation

of gridlock. Less spending would be certainly great at this point. I mean,

well, if we’re trying to find inflation here, while we keep spending money over here, it’s

challenging. If you want to get back to fiscal responsibility, you got to vote for gridlock,

or hopefully moderates come. All right, well, we’ll let sacks go. Anyway, we’re gonna go to

science anyway. And sacks checks his email during that segment. So by the way, there’s there’s an

article now, you know, when we talked about quiet quitting, it’s now become this huge thing that

everybody’s talking about. Yes. And, and what’s so funny about quiet quitting is just yet another

example of Gen Z, again, co opting something we’ve already done. When we used to do it,

it was called coasting. And you just be resting, resting. But But now it’s called quiet quitting.

Yeah, they’re all up in their feelings. Do we want to talk about

the gut biome? I want to hear about the gut biome. So there was a there was a paper published.

In so the journal sell. The paper was done by a research team out of her to Leah. So I’ll take a

step back, the human body is made up of roughly 10 trillion cells. And there are also somewhere

between 10 and 40 trillion bacterial cells that live in your body, primarily in your small

intestine, in your in what people call the gut biome. And so this is a population of microbes,

bacteria, that are basically chemical factories, they eat stuff up, and they spit out chemicals,

and those chemicals end up in our body. And it turns out that the gut biome,

the bacteria in our gut can actually regulate our health in a very significant way. And this

was the basis of our company, unique, you guys can bleep that out if you want, which is now called

super gut. And Jake, I know you’ve tried the product, which was awesome. Thank you sent me

I bought me unique that helped me with my weight loss. And then I just got super good.

The principle of that business is that there is a known product, a molecule amylose that you can

feed the gut biome, it doesn’t get absorbed by the human body, it sits in the gut biome,

and the bacteria in your gut, certain types of bacteria will eat it, their population will grow,

and other population of bad bacteria will shrink. And the good bacteria release chemicals called

short chain fatty acids that go into your blood and reduce your blood sugar and have a profound

effect on on your metabolism. And there are also known gut bacteria that can regulate your sleep,

your mood, your anxiety, your energy levels, and your glycemic control, the control of blood

sugar. So it’s an incredibly telling me, are you telling me that Cialis is a natural compound? Is

it bacteria? Are you saying we have to cancel our Cialis prescriptions? Oh, no. Yeah. So guys,

there’s there’s a known, there’s a known principle that’s really deeply studied now in urology,

in neuroscience, called the gut brain axis that you can actually profoundly affect

disease and the condition of the brain and neuro conditions by changing the gut biome.

And so this is this is something that’s just being studied. The reason it’s all coming to light in

the last few years is because of the cost of DNA sequencing. We used to be very, very expensive

to sequence the DNA from your gut biome, which you do by looking at your poop. And then you know,

looking at all the DNA that’s in the poop, and that tells you what your gut by what bacteria in

your gut that used to cost 1000 bucks, now it costs five bucks. And so in the last couple of

years, there’s this absolute explosion in research into the gut microbiome, and more importantly,

how the gut microbiome affects human health. So this particular paper looked at the effect

that eating artificial sweeteners had on the gut biome and on human health. And so what these

researchers did is they, they took 120 people, they gave them nothing or gave them sugar,

or gave them saccharin or sucralose or aspartame or stevia, the four most popular artificial

sweeteners. And then they looked at how their gut biome changed. And importantly, they looked at how

their glycemic control or ability to control blood glucose changed blood glucose, as you guys may

recall, you know, you always have glucose in your blood, the more if you have over, you know, a

level of 100, you know, you can, and it persists, you can actually have really bad health effects.

And it causes high a one c over time, which is diabetes. And so high stores more fat when you’re

spiking. And so you get when you have high blood glucose, it’s actually damaging to organs,

it’s damaging to cells. And over time, it can cause very significant deleterious effects to

the human body. That’s what the disease of diabetes is and does is it’s about high blood

blood, high blood sugar, blood glucose. So what these guys did is they gave people saccharin,

sucralose, aspartame and stevia, and then measured their blood glucose and their ability

to convert sugar in the blood and absorb it and use it. And that’s called glycemic control. The

way you guys you guys have probably done this in the doctor, you take a glycemic control test,

you drink a bunch of sugar water, and they measure your blood sugar every couple of minutes.

And then they show the curve on how effectively your body can metabolize that glucose. And if

it cannot metabolize that glucose, well, you have bad glycemic control. And ultimately, that is

diabetes. And what they found was that if you eat saccharin and sucralose, which we always assumed

were better than sugar, they actually adversely affect your ability to control blood glucose,

saccharin and sucralose, in particular, drive up your blood glucose and makes it harder for

your body to metabolize glucose out of your blood. Aspartame and stevia were relatively benign.

Oh, really? Because that’s what’s in Coke Zero. That’s what I drink.

There you go. And so so that was kind of the realization. And then they went deep,

and they actually analyzed the microbiome. And they showed that there were profound differences

in how these compounds affected the microbiome. It turns out that sucralose, for example,

is more likely not being absorbed by your intestine. So it’s sitting in the intestinal

walls, and the bad bacteria are eating it. And the good bacteria that are supposed to be making

short chain fatty acids, and all these chemicals that regulate blood sugar, have a lower population.

And so we actually see a profoundly negative effect from eating certain compounds.

Have you shipped your poop to test these?

Like, yeah, we just did a clinical trial at super gut, by the way, and we found,

and we published it. So it’s public.

But wait, just the audience doesn’t even know this stuff exists in all likelihood.

You basically take a poop, and you put it in a vial, and you send it and they analyze your poop.

I don’t mean to be graphic here. But have you done this before? How does this work?

I do it every I’ve done it. Yeah. And I think it’s um, look, here’s here’s the issue, Jason.

Think and I want to I want to say two things that I think are really important to say.

Number one is, um, we know very little about what bacteria do what in your gut,

how which we’re starting to understand which ones are beneficial, which ones make good chemicals

that your body use and regulate your cells and regulate your health. And remember,

we have a symbiotic relationship with the bacteria in our gut, they’re making chemicals,

and they’re eating chemicals, the chemicals they make affect our cells, the chemicals they eat

affect our body. So the way that we evolve our health is actually profoundly affected by our gut

biome. So we don’t know enough yet to say definitively, this bacteria is good. This

bacteria is bad. We’re starting to have a good sense of that. The second way just say,

yeah, just so you know, just to double down on this, like, there’s a form of therapy,

it’s experimental, but it’s called fecal microbiome. transplantation FMT heard about

this. But you know, we are finding now that you can take feces from healthy individuals that have

good, you know, gut biome and good bacterial counts. And if you put it, you know, injected

into people that are suffering from a bunch of different diseases, it actually is looking like

it’s curative. So Parkinson’s, MS, IBS, colitis. So it just goes to show you that this that somebody

with good gut by there’s bacteria really understood to another person’s intestines,

where do you put your poop? No, through the bum? No, no, no, you Yeah, you could do it there. Or

you can take a pill. So there’s a little take a pill and it’s got the fecal stuff in it, you

swallow it. And now I want to eat somebody else’s poop. You said I said it in a way,

so that we could see his reaction to in the bum and Jason was like this.

How does this impact Uranus? That’s what the audience wants to know.

Here’s the other point I wanted to make, which ties to what you said this is really important.

So the gut biome is an ecosystem, like a rainforest. There are trees that grow monkeys climb

the trees, they poop, there’s jaguars, jaguars eat the monkeys, the trees grow because of the monkey

poop, it is a whole ecosystem, all these organisms, all these microbes regulate one another and feed

one another. And this is why probiotics do not work. probiotics are single microbes, single

bacterial strains or fungal strains that we put into a pill, and we swallow it. And just because

that microbe happens to have some beneficial effect, you know, on its own in a Petri dish,

it does not survive in your gut biome. Because it’s like putting a house cat in a rainforest,

the jaguar will eat the house cat, the house cat has nothing to eat, etc. It doesn’t inoculate

inoculate means that it survives thrives in the population grows. So when we take probiotics,

it’s just passing right through our gut. It doesn’t stay there and doesn’t change anything.

And it turns out that the reason fecal microbiome, fecal transplants work is because

you’re taking the whole microbiome from someone else’s gut, and you’re putting it in your gut,

the whole rainforest, the whole rainforest, and so all the organisms that are needed that self

that regulate one another, all of the small molecules that regulate that cross regulate

each other, they all go in your gut, and then they actually change your entire gut,

and your gut becomes the rainforest of someone else’s gut. And so if someone else has a healthy

gut, meaning my eyes, my anus can be your anus, Jason. So we put our anuses together,

and then a monkey goes between them. And then the rainforest is well, let me ask you a question. The

FDA has not approved any of this yet. When will the FDA be approving these treatments, etc. There

are a lot of there are a lot of clinical trials going on for fecal transplant. UCSF has a huge

clinical trial for MS, as Chamath pointed out right now, where they are actually doing fecal

transplants on patients without MS into people with MS. And significant, you know, the early

data of these sorts of treatments has indicated that there can be a very profound effect on the

frequency of lesions appearing on the brain, which is one of the primary symptoms of MS. And so these

organisms, we don’t yet know why. But some of them will, when will we understand this? Is it a five

year tenure? There’s a ton of startups, there’s billions of dollars invested. When will we know

when will we know and have like a game? So it’s already coming out. There’s no it’s not like a

binary switch. We’re discovering new things. There’s a cup, there’s a set of companies that

are discovering what are called small molecules. So they’re finding what are the little chemicals

that those good bacteria are making in your gut? And what can we turn those chemicals into drugs?

And so they’re trying to turn those into drugs. Other companies are saying, you know what,

this is a set of good bacteria, let’s just put them in your body and figure out a way to get

them to inoculate and stay. Other companies are saying, let’s do fecal transplants. And other

companies are basically just saying, let’s change this is what we do at super gut. Let’s just change

the feedstock for your gut biome. And you can actually evolve the rainforest into a different

state by changing what you’re feeding the bacteria in your gut. And there’s certain molecules, you

can feed the gut bacteria, and then the populations will change into a more beneficial state.

Why are people saying like eating drinking kombucha and fermented vegetables, pickles,

whatever, apples are like great at fixing your biome, and then taking sugar out is good for your

biome. This is another thing I keep hearing, like people are making single point claims like that,

because they have invested in a life cell, and they want to defend their choices. It’s not to

say it’s not to say that those things are bad, those are all good. But I think what we know,

and the fecal transplantation is the most simple way of pointing this out, is that it’s a broad

scale holistic approach that gets the best results. So as you know, like if you if you had,

if you’ve had a kid that’s had, you know, diarrhea, for example, right? You know, sometimes what we’ll

do now is instead of giving the kid some sort of diuretic suppressant, what you actually give them

is probiotic, right? And what you’re trying to do is to reintroduce healthy bacteria into that child’s

stomach in a way that allows them to self manage and self heal, while the bad, you know, diarrhea

causing stuff kind of gets washed away, as an example. So will one thing be a cure all for you?

No, I think that you should be very skeptical of those claims. That’s why everybody says,

a healthy, well balanced diet is really important, because we do not know. Conclusively,

this is why, you know, I, I tend to believe that the broad holistic diet works the best in

moderation. Yeah, because you just don’t know what you’re not getting. We don’t know that,

you know, we don’t know, you can’t say conclusively that there isn’t a form of bacteria

that is created specifically when you consume animal protein, that is extremely helpful to you.

We don’t know that that’s not true. Not now. We don’t know that that is true either.

Right. And there’s a ton of research going on to try and figure that out right now.

Have we figured out any of it, though? Like, yeah, this whole tumeric ginger movement,

we could we could do 12 episodes on this. There’s so much amazing discovery happening. This is a

good paper to highlight that, which is like, hey, maybe avoid products that have saccharin

and sucralose in them. But my my big thing is there is no diet, whether it’s keto, whether

it’s the South Beach diet, whether it’s specific vegetarianism, whether it’s veganism, nothing is

a cure all for what ails you. There is nothing. And by the way, one important point in this paper,

one of the points that these guys highlighted, which we see all the time in microbiome research,

is that there are what are called responders and non responders, that within a population,

it’s not like everyone that eats sucralose has the same negative effect. Some people have a

really negative effect. And some people have a mild to moderate to neutral effect. And so there’s

a range of your particular physiology, your particular gut biome that will respond differently

to different inputs into your body. And that’s the most important thing to figure out because

people need to spend time eating and sampling to understand what makes you feel better or worse.

This is why I have an issue with, you know, the broad based claims of this path will solve all

your problems. It’s just not true. You have to solve it for yourself. And it’s, it’s through

iteration. And then the the Yeah, anyways, it does seem like non processed foods, whole foods,

things that exist in nature, that seems to me directionally correct as the way to go. And then

the fake stuff, and the process stuff may be less good for you agree with that. This is this is why

I think like there, there is a little bit of a scam being run on people who want to be healthy.

Like, for example, have you guys looked at the ingredient list on Oatly? You know, everybody

loves oat milk. But have you looked at the ingredient list? Are you really telling me

conclusively that that is healthier than milk? It’s insane. I mean, I could, I could argue both

ways. But yeah, I mean, look at the chemicals, look at the chemicals in a box of Oatly. I mean,

just drink water. Guys, I can also tell you the chemical name for every chemical that’s in milk,

which is all chemical, like all everything around us is chemicals. So I understand I understand

natural chemicals, but you understand synthetically made manmade chemicals that are explicit that have

to be put on an ingredient list because of its danger in high quantities should be treated

slightly differently, in my opinion. Yeah, I mean, always just gave us three subpoenas. We’re all

fucked. We’re being deposed by Oatly now. All right, everybody, we’ll see you next time on the

All In pod. Love you, boys. Love you besties. Bye.

Besties are gone.

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.

I’m going all in.