Sep 1, 2022
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00:00:00 Speaker 2
Alright everybody, welcome to episode 94 of all in. This is a summer unprepared episode. There’s not much news. We’re going to wing it.
00:00:09 Speaker 2
With me again in his golfing cap.
00:00:13 Speaker 2
The Rain Man himself.
00:00:15 Speaker 2
David Sacks, you do OK, buddy.
00:00:17 Speaker 1
That’s good.
00:00:18 Speaker 1
Yeah, alright, alright.
00:00:19 Speaker 3
I’m kind of annoyed that we’re taping on Wednesday.
00:00:22 Speaker 2
Yeah, this is a slow Newsweek.
00:00:24 Speaker 2
It’s a slow Newsweek.
00:00:24 Speaker 2
That’s not why we’re.
00:00:26 Speaker 2
Taping on Wednesdays because you.
00:00:27 Speaker 2
Have to want to.
00:00:27 Speaker 2
Go to Burning Man.
00:00:28 Speaker 2
Well, whatever.
00:00:28 Speaker 2
I mean, listen, everybody has to get their.
00:00:30 Speaker 2
Burn on sax.
00:00:31 Speaker 2
Have you ever been to Burning Man?
00:00:32 Speaker 2
Yeah, I’ve been before.
00:00:33 Speaker 2
Did you like it?
00:00:34 Speaker 2
At Burning Man? Really?
00:00:35 Speaker 2
He was there on 3 some Thursday.
00:00:38 Speaker 3
I’ve been a couple of times.
00:00:40 Speaker 3
I think it’s a it’s a cool experience doing, worth doing, you know, once or twice in your life.
00:00:46 Speaker 3
It’s not something I want to do every year, but I know a lot of people do like doing it every year.
00:00:50 Speaker 3
They’re like really into it.
00:00:52 Speaker 3
I’m not really into it that way, but I think it was a worthwhile experience.
00:00:55 Speaker 3
To go at least.
00:00:56 Speaker 3
Once, Timothy, have you been?
00:00:59 Speaker 2
For breaking even I’ve not been, now I.
00:01:02 Speaker 2
Have no desire.
00:01:03 Speaker 2
No, I don’t like.
00:01:03 Speaker 2
Driving in the car for a long period of time.
00:01:05 Speaker 2
And well, by the.
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Way I’ll tell you.
00:01:07 Speaker 2
I’ll tell you why I don’t.
00:01:08 Speaker 2
Really have a huge desire to go.
00:01:11 Speaker 2
I don’t really have a huge desire at.
00:01:14 Speaker 2
This point in.
00:01:14 Speaker 2
My life to want to do a ton of.
00:01:17 Speaker 2
Drugs, that’s not that’s not just about that.
00:01:21 Speaker 2
No, really.
00:01:21 Speaker 2
It’s not, but it’s really about.
00:01:22 Speaker 2
His art joking right now.
00:01:25 Speaker 2
If you like art, you know, like.
00:01:26 Speaker 2
Music. It’s amazing. It’s amazing.
00:01:30 Speaker 2
I really, I really like art.
00:01:31 Speaker 2
I think I actually collect phenomenal art.
00:01:33 Speaker 2
In fact, I like to go.
00:01:34 Speaker 2
To like, freeze the Ben Ali.
00:01:37 Speaker 2
Blow your minds.
00:01:38 Speaker 2
No, no, no.
00:01:39 Speaker 2
You have no idea.
00:01:40 Speaker 2
The scale of the art there is tremendous.
00:01:42 Speaker 2
It is extraordinary.
00:01:43 Speaker 2
And if you’re into music, we.
00:01:44 Speaker 2
Just can we just call it what it is?
00:01:45 Speaker 2
It started out as a festival that did celebrate art and creativity.
00:01:50 Speaker 2
And over time became mass market and in order to become mass market, there’s still an element of that, but it’s.
00:01:57 Speaker 2
A huge party.
00:01:58 Speaker 2
And I think people should just be more honest that it’s super fun.
00:02:01 Speaker 2
You can really rage for a weekend or for entire week, and people should enjoy themselves.
00:02:06 Speaker 2
But let’s not like have to put all these labels about how, like, intellectually superior it is and how you.
00:02:11 Speaker 2
Feel like pushing?
00:02:12 Speaker 2
I don’t think that’s right.
00:02:13 Speaker 2
It’s really it’s.
00:02:14 Speaker 2
OK, it’s OK to go and do.
00:02:16 Speaker 2
The thing that’s interesting about it.
00:02:18 Speaker 2
Is it’s really about.
00:02:19 Speaker 2
A large number of people get together.
00:02:20 Speaker 2
They build campaigns.
00:02:21 Speaker 3
To do drugs.
00:02:22 Speaker 2
In a community, know you’ve never been it you would.
00:02:25 Speaker 2
Literally, that’s not the vibe there.
00:02:27 Speaker 2
The vibe is really dancing and creativity and art and community.
00:02:30 Speaker 2
But anyway, so it’s like.
00:02:31 Speaker 2
A rave. It’s writing, yes.
00:02:35 Speaker 2
I mean, sure. I mean.
00:02:37 Speaker 3
With neon.
00:02:38 Speaker 3
With a lot of neon, yeah, yeah.
00:02:38 Speaker 2
With a lot of no.
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It’s it’s kind of those.
00:02:41 Speaker 2
Experiences are the best when.
00:02:42 Speaker 2
You’re sober. That’s fast.
00:02:44 Speaker 2
You have to understand that going to EDC Silber I’ve never been to EDC, but this there’s a great filter here, which is you’ve got to drive 6-7 hours into the desert in New York to survive. You have to bring everything with you and bring everything out, you know, whatever it is.
00:02:58 Speaker 2
The bathroom, water, food and it is harsh. I mean it’s 100 plus degrees in a day and it’s 40 degrees at night.
00:03:04 Speaker 2
It’s not easy to survive.
00:03:06 Speaker 2
It’s hard.
00:03:07 Speaker 3
It used to be that way when I went.
00:03:09 Speaker 3
When I went, I went with a bunch of guys who had the whole thing that like wired in and they had like these yurts.
00:03:15 Speaker 3
And it was like a whole community and that like running water and a kitchen.
00:03:19 Speaker 3
And it was basically glamping.
00:03:21 Speaker 3
It was glamping and then.
00:03:22 Speaker 2
There are people who are not hard to survive.
00:03:24 Speaker 2
No, they’re.
00:03:24 Speaker 2
I mean, it’s hard to do that.
00:03:25 Speaker 2
There are people who glam.
00:03:27 Speaker 2
It is hard to do that because you have.
00:03:29 Speaker 2
To seriously warm food, you bring water.
00:03:29 Speaker 3
You have to go with people.
00:03:31 Speaker 3
Have to go with people who know what they’re doing and.
00:03:32 Speaker 3
Yes, they.
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All highly.
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On like one of those trips.
00:03:35 Speaker 2
Set that up.
00:03:36 Speaker 3
So yes, they spent the whole year whatever setting it up and it was really elaborate.
00:03:39 Speaker 3
And then there was an article like in New York Times basically saying that, you know that they were rooting Burning Man because they’re making it two night.
00:03:48 Speaker 1
That was part of it.
00:03:49 Speaker 3
That was you remember this?
00:03:50 Speaker 1
Well, there’s it.
00:03:51 Speaker 3
That’s when I went.
00:03:52 Speaker 3
I went to the two nights.
00:03:53 Speaker 3
Experience and then.
00:03:53 Speaker 2
They wrote that about you, yeah.
00:03:53 Speaker 3
They go basically.
00:03:55 Speaker 2
OK, great.
00:03:55 Speaker 2
You ruined Burning Man.
00:03:57 Speaker 2
Thanks, Josh.
00:03:58
Big bird.
00:03:59 Speaker 1
Second Rain Man David Sax.
00:04:01 Speaker 3
You let your winners live.
00:04:09 Speaker 3
It opens sources.
00:04:10 Speaker 3
To the fans and they’ve just gone.
00:04:12 Speaker 2
Robbie W, Queen of quinoa.
00:04:16 Speaker 2
I don’t know if you’ve been following the story.
00:04:19 Speaker 2
Will cure that Amazon Rick story open.
00:04:21 Speaker 2
See the marketplace, the eBay of, if you will, the volume.
00:04:25 Speaker 2
Dropped 99% since they first peak of $406 million in a single day.
00:04:34 Speaker 2
On August 28, volume dropped to around $5 million, down 99%, according to decentralized app Tracker DAPP radar.
00:04:43 Speaker 2
On a monthly basis, opensees volume has dropped 90%, according to June Analytics. The floor price of Liberdade has now dropped by 53%.
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If you remember openssi raise 300,000,000.
00:04:57 Speaker 2
At a $13.3 billion valuation December 2021 in a round led by CO2 and Paradigm to put that in perspective, that was nine.
00:05:09 Speaker 2
Whole months ago.
00:05:10 Speaker 2
My how the world has changed for brusher take on NFTS and this whole boondoggle?
00:05:16 Speaker 2
I I don’t know how to how we look.
00:05:17 Speaker 2
Back on.
00:05:18 Speaker 2
Yeah, I don’t.
00:05:18 Speaker 2
I don’t know.
00:05:19 Speaker 2
Mean we’ve had a lot of bubbles as a species, this is.
00:05:22 Speaker 2
Just another one.
00:05:24 Speaker 3
I thought we gonna stop doing stock market crashing stories.
00:05:27 Speaker 2
Well, this is this is a different.
00:05:29 Speaker 2
Market what do you think did?
00:05:31 Speaker 2
You invest in any of these NFC.
00:05:31 Speaker 3
We’re in the eighth month of this story, which is fill in the blank asset class crashed.
00:05:37 Speaker 2
Yeah, this one scene.
00:05:39 Speaker 2
The question I have here, Sachs says.
00:05:41 Speaker 2
Do you think that this is the end of the category though?
00:05:44 Speaker 2
Do you think?
00:05:44 Speaker 2
They said category ending.
00:05:45 Speaker 2
Do you think there was ever anything?
00:05:46 Speaker 2
Interesting here ’cause you.
00:05:48 Speaker 2
Took you heard a lot of pitches like I did for how we’re going to change.
00:05:51 Speaker 2
Here, you know what, I’ll, I’ll say something ’cause I I like in this to the point, just to tie it back to what we.
00:05:57 Speaker 2
Just talked about.
00:05:59 Speaker 2
At the end of.
00:05:59 Speaker 2
The day.
00:06:02 Speaker 2
You know, I think I’ve said this in the past, but like what differentiates humans from all other species on Earth is our ability to tell, to communicate and tell stories.
00:06:11 Speaker 2
A story is like a narrative about something that doesn’t exist, and by telling that.
00:06:14 Speaker 2
Narrative you can.
00:06:15 Speaker 2
Create collective belief in something, and then that collective belief drives behavioral change and action in the world, right?
00:06:21 Speaker 2
I mean everything.
00:06:22 Speaker 2
From religion to government to money to art is all kind of driven.
00:06:28 Speaker 2
All markets are driven by this notion of.
00:06:30 Speaker 2
Narrative and collective beliefs that arises from that narrative. So when you go to an art dealer and you have a sit down with an art dealer, you might appreciate the art, but then the narrative begins and the narrative is this artist did this and they came from this. And the artist that looks like this created at 6.8 million. And this artist is only trading for 3.2 million and the whole.
00:06:49 Speaker 2
Narrative takes you away.
00:06:50 Speaker 2
Into OK, I should pay 3.2 million for this piece of art, and ultimately it’ll be worth more.
00:06:56 Speaker 2
And that’s the fundamental premise of markets is you’re buying into something not necessarily always, and this is such a minority now, it’s scary.
00:07:04 Speaker 2
Used to be that you don’t a piece of the business or productive asset, you pull cash out of it.
00:07:08 Speaker 2
Hopefully you get more cash out than you put in when you buy it.
00:07:11 Speaker 2
Nowadays, markets allow you to trade.
00:07:14 Speaker 2
Therefore, the majority of market based decisions are driven by if I buy something for X, I’m going to be able to sell it to someone else for Y.
00:07:21 Speaker 2
And so the narrative is driven around I’m paying this, someone else will pay.
00:07:25 Speaker 2
Why down the road?
00:07:26 Speaker 2
I’ll make money from that. And this has been repeated 1000 times over. It’s been repeated in the ICO tokens.
00:07:32 Speaker 2
It’s been repeated in the Tulip bubble.
00:07:35 Speaker 2
It’s been repeated in every art market and subsidiary of every art market since the dawn of time.
00:07:40 Speaker 2
Since the dawn of markets and I think the are really.
00:07:43 Speaker 2
Just one more.
00:07:44 Speaker 2
Kind of example where this beautiful narrative is formed the the digitization of art.
00:07:49 Speaker 2
But it is no different.
00:07:51 Speaker 2
Than any other form of assets that we tell ourselves a story around and we convince ourselves that I’m paying something today and someone else will pay something more for me tomorrow, and I will also say that in the last year.
00:08:01 Speaker 2
With the liquidity that we saw the last two years, it leached into the stock market where there’s supposed to be more rational behavior that ultimately the cash flows of an asset you’re buying should generate more for you than the money you’re spending to buy that that.
00:08:13 Speaker 2
That asset and ultimately you could maybe trade out of it early, but still so much of it became about, well, the stock is going up.
00:08:20 Speaker 2
Therefore, if I spend X, someone else will spend why?
00:08:22 Speaker 2
And I’ll make money on the stock with no underlying assertion of what’s the productivity of that business.
00:08:27 Speaker 2
What’s the return on cash going to be based on the cash flows coming out of that business over time or any of the fundamentals?
00:08:33 Speaker 2
Around it.
00:08:34 Speaker 2
And so, so much of our discussion and distortion has really been driven by this narrative fueling and I think they are an example, but there are many others and we’re going to see many more as long as humans have the.
00:08:45 Speaker 2
Ability to communicate.
00:08:46 Speaker 2
With each other or any do you have?
00:08:47 Speaker 2
Any check on it, comma?
00:08:48 Speaker 2
I think free birds mostly right.
00:08:50 Speaker 2
I do think that there is this thing the the Burning Man Coachella example is the best way to describe this.
00:08:57 Speaker 2
A lot of these things are the same.
00:08:59 Speaker 2
But when a few people approach something early.
00:09:04 Speaker 2
They’re too insecure to admit that it’s the same as something else, and so they spend a lot of time trying to tell you a narrative about why it’s totally different.
00:09:13 Speaker 2
The Buffett example, you know, would be the quote.
00:09:16 Speaker 2
You know, whenever somebody tells you that this time is different, it’s probably not that different.
00:09:20 Speaker 2
Or the other quote that’s well worn in history is like, you know?
00:09:25 Speaker 2
Things don’t necessarily repeat in history, but they’re I’m all of this is trying to say that.
00:09:30 Speaker 2
Other than, like, fundamental leaps of science, there’s not a lot of stuff.
00:09:34 Speaker 2
That’s new in.
00:09:34 Speaker 2
The world, you know, we are repeating things over and over and one of the.
00:09:38 Speaker 2
Things we repeat.
00:09:40 Speaker 2
Is the social capital that you get from having certain choices and then getting other people to validate those choices ’cause you want to feel like you’re, you know, worthwhile?
00:09:52 Speaker 2
And this happened in FS and I’m sure in the first phase of different movements in art that also happened.
00:09:59 Speaker 2
It’s probably happened in a bunch of other markets as well.
00:10:02 Speaker 2
So these things are more similar than they are different.
00:10:06 Speaker 2
Coachella and Burning Man, the same and part of the art market the same.
00:10:12 Speaker 2
Everybody that runs to you with why it’s so different.
00:10:15 Speaker 2
How would just have a grain of salt and say you don’t need to be different, just enjoy it because you think it’s cool?
00:10:19 Speaker 2
All right, we can go either to this California fast food wages story, or we can go to Goldman Sachs.
00:10:24 Speaker 2
Workers are quitting.
00:10:26 Speaker 2
On mass.
00:10:27 Speaker 2
Because Goldman Sachs is saying you got to come back to the office five days a week where you want to go both.
00:10:32 Speaker 2
I think the California thing is really interesting, just the the three things that California did in the last week, I don’t know if you guys saw, but number one is they basically said that you know you have they’re going to ban.
00:10:44 Speaker 2
Ice combustion engines, I think by 2035, so you have to be battery easy. We have have, you can still have those sales.
00:10:52 Speaker 2
Sorry, yeah, new sales, which is the first in the country to do it.
00:10:56 Speaker 2
And just to go back to second, California is the largest auto market in the United States and effectively, you know, Trump and California got into a huge spat.
00:11:04 Speaker 2
Because California had certain emission standards that were tougher than the rest of the United States and, you know, the federal government tried to sue California and back and forth all of this rigamarole.
00:11:14 Speaker 2
So California is always sort of light on.
00:11:16 Speaker 2
Climate that was.
00:11:17 Speaker 2
One thing, then the second thing is they said we’re going to create, you know, a state sponsored organization to set the minimum wage rates for fast food workers.
00:11:28 Speaker 2
Pause what we think about that and then the third thing is that this congresswoman I think are this assembly person Buffy Wicks passed the law.
00:11:37 Speaker 2
Through the Senate and through the House, that essentially holds social media companies liable for the mental well-being and the mental health of kids. And and depending on where you’re lying on all these issues, it’s like an interesting.
00:11:54 Speaker 2
Kind of blends in which board like California has really become extremely, extremely legislatively active in basically in full imposing their will on free markets in the economy.
00:12:05 Speaker 2
There yeah, and for people who don’t know the fat, the fast food issue was they want to move to a more European style where instead of.
00:12:13 Speaker 2
Unions debating with individual corporations, McDonald’s, Burger King, whoever, what they’re going to pay their employees or employees. Having that discussion one-on-one. They want the state, some state authority to pick the amount per hour, fast food.
00:12:31 Speaker 2
Food companies pay and then I guess disintermediate the unions.
00:12:36 Speaker 2
It’s kind of confusing but interestingly of our friend Lorraine and Gonzalas, if you remember she’s the one who told ironto, you know F off and and was a a former Democratic legislator.
00:12:51 Speaker 2
She introduced the bill when she was in the assembly and so it’s kind of a weird approach.
00:12:57 Speaker 2
I’m not sure why the.
00:12:58 Speaker 2
Government to get involved.
00:12:58 Speaker 3
No, it’s not. It’s not.
00:13:00 Speaker 3
But it’s not distributing the unions, she learns.
00:13:03 Speaker 3
All is Fletcher.
00:13:04 Speaker 3
I guess now she’s the former Democratic legislature who drove Elon out-of-state.
00:13:09 Speaker 3
Remember when she said you know F Elon now she works?
00:13:11 Speaker 2
Ideal responders message received.
00:13:13 Speaker 3
Yes, and he left a great, great move for for the state.
00:13:17 Speaker 3
So she is.
00:13:17 Speaker 3
Now running one of the biggest unions and what?
00:13:20 Speaker 3
She said it.
00:13:21 Speaker 3
Is that this bill will move California closer to the labor model used in Europe, where unions negotiate.
00:13:28 Speaker 3
The unions are still negotiating for wages and work conditions, but in an entire sector with some sort of government board rather than company by company.
00:13:37 Speaker 3
So in other words, it’s too slow to unionize, you know, company by company.
00:13:41 Speaker 3
Those want to unionize entire sectors of the economy.
00:13:45 Speaker 3
Now the thing that’s really crazy about this minimum wage proposal is.
00:13:49 Speaker 3
But like you said Jason, it isn’t just that they set a minimum wage.
00:13:55 Speaker 3
They created a ten person panel.
00:13:57 Speaker 3
So there’s a new government agency that’s going to regulate fast food, the fast food industry, you know, they’re not going to stop the minimum wage.
00:14:04 Speaker 3
It’s gonna be work conditions.
00:14:06 Speaker 3
So now you’re turning fast food restaurants into a highly regulated part.
00:14:11 Speaker 3
And the weird thing is, it’s not even just all fast food. It’s basically chains that have more than 100 fast food restaurants nationally.
00:14:20 Speaker 3
So in other words, if you’re a local operator of two McDonald’s, you’d be subject to this ten person board.
00:14:28 Speaker 3
But if you own 20 restaurants?
00:14:31 Speaker 3
That aren’t part of a national chain in.
00:14:33 Speaker 3
California, then you’re.
00:14:34 Speaker 3
Not. And so the weird thing is that some workers in the fast food industry could get this new minimum wage of $22.00 where otherwise other workers who worked for, you know, not part of a major chain would get the statewide minimum wage at 15.
00:14:49 Speaker 3
So it’s it’s it’s kind of unfair in that some parts of the restaurant industry are being regulated and others aren’t.
00:14:56 Speaker 2
Is there any justification here that you can think of to not let the free market do its?
00:15:02 Speaker 2
Thing freyburg.
00:15:04 Speaker 2
Well, if you represent the workers, you’re saying, hey, pay him $22.00 and you can’t. And here’s what that points out.
00:15:12 Speaker 2
It actually points out that there’s probably a pretty big business flaw in a business that’s so reliant on commodity labor, and that business in and of itself is not.
00:15:21 Speaker 2
As valuable as.
00:15:22 Speaker 2
You might have thought it was before.
00:15:24 Speaker 2
Think about it.
00:15:24 Speaker 2
This way, there’s a company called McDonald’s, and then there’s another company called McDonald’s Labor.
00:15:32 Speaker 2
And what happened before as McDonald’s employed people to do work at McDonald’s, and maybe what happens in the future is all those people are looking left and looking right and they’re like, you know what?
00:15:42 Speaker 2
McDonald’s has nothing without us.
00:15:44 Speaker 2
We are the business.
00:15:45 Speaker 2
We deserve the value.
00:15:47 Speaker 2
So in terms of how much of the value of the business flows to the shareholders of McDonald’s?
00:15:52 Speaker 2
First of the employees that work at McDonald’s.
00:15:54 Speaker 2
The employees that work at McDonald’s are saying let’s go do a startup and our startup is called.
00:15:59 Speaker 2
Union and our business that’s called Union is now going to provide a bunch of services to McDonald’s and those services we’re going to start to value capture what they’re doing.
00:16:08 Speaker 2
And it indicates that maybe there’s something inherently disadvantaged in that model and it could be that the argument could be made that that business in the early 20th century in the late.
00:16:20 Speaker 2
19th century, yeah, the 19th century, early 20th century and beyond.
00:16:24 Speaker 2
That you could build a good advantage business because there was such an eager hungry workforce, people looking for work.
00:16:30 Speaker 2
You people would come and work for nickel an hour or whatever and so you as a business owner could make a lot of money doing that.
00:16:36 Speaker 2
You could sell a product for a dollar.
00:16:37 Speaker 2
Pay people.
00:16:38 Speaker 2
$0.05 to.
00:16:39 Speaker 2
Make it for you. But nowadays those people are looking left, they’re looking right and they’re like, wait a second, we are the business or we’re 90% of the value.
00:16:46 Speaker 2
And so couple of things will happen. Number one is the inherent business model of a company that’s so dependent on commodity service is going to be flawed and challenged in the 21st century.
00:16:57 Speaker 2
And fast food restaurants aren’t going to be as valuable. Businesses that rely on commodity service are not going to be as valuable #2 businesses are.
00:17:04 Speaker 2
Going to automate.
00:17:05 Speaker 2
So new businesses will emerge then?
00:17:06 Speaker 2
Actually, do the fast food work or do the car building work or do the dock loading and unloading work that are automated and they’ll have an inherent advantage in the economy and they’ll win. And I think #3 is that in the near term, consumers will suffer because prices will.
00:17:20 Speaker 2
Go up ’cause someone has to pay for the incremental cost of running this unionized business, and that will ultimately be the customer of that business.
00:17:27 Speaker 2
I’ll say the fourth point is I am concerned about this sort of behavior in regulated spaces where the government has actually control over the market itself.
00:17:37 Speaker 2
So this is a good example of this is that, you know, we had our friend.
00:17:41 Speaker 2
Brian from Flexport on a few times, but you can’t just start up a shipping company and have a doc.
00:17:47 Speaker 2
The docs are run by the cities, and they’re run by the state, and so those docs access to those docs.
00:17:52 Speaker 2
Access to that market is regulated by the.
00:17:55 Speaker 2
So then what happens is the Union, like the the labor company, can actually have regulatory capture through the government of a segment of the economy?
00:18:03 Speaker 2
And that’s where things start to get dangerous.
00:18:05 Speaker 2
So look, I’m all for unions.
00:18:06 Speaker 2
If they want to show that a business is reliant on a commodity labor force and commodity service, and they all band together and start a startup, I mean, that’s what we do.
00:18:13 Speaker 2
We all start up.
00:18:14 Speaker 2
Company, yeah, go and compete.
00:18:16 Speaker 2
But the issue is then when the government creates regulatory capture over a segment of the economy and make it difficult for the free markets ultimately do its job of either automating or creating a newly advantage business model or all those things that allow us to progress.
00:18:29 Speaker 2
Auto meetings coming up, a couple of us made a bet on a crazy idea of like automated robotic coffee called Cafe X to talk around book here.
00:18:38 Speaker 2
And the company really struggled during the pandemic. But they have two units at SFO Jamath, they’re doing seventy $73,000 in two units last fund and I’m like, wow.
00:18:49 Speaker 2
The company figured it out and there’s another company doing franchise.
00:18:52 Speaker 2
This is the this is the sad thing that California doesn’t realize is like, I think that the folks writing these laws have just an extremely poor understanding of economics and capitalism because the first thing that it does.
00:19:05 Speaker 2
Is effectively and everybody can understand this is it caps the profitability of a company right because it effectively says if you look at an industry that is over earning.
00:19:19 Speaker 2
From this, Council will essentially see money that should be re appropriated to employees.
00:19:24 Speaker 2
Now that idea is not necessarily a bad thing.
00:19:28 Speaker 2
For example, you see that all the time in technology, right?
00:19:30 Speaker 2
If you look at the EBIT margins of like big tech and how they’ve changed, they’ve actually eroded over time as the companies have had to generate more revenue because employees demand more and more of those gains.
00:19:43 Speaker 2
That’s an implicit part of how the free market economy works in technology, so.
00:19:48 Speaker 2
You know, if you don’t feel like you’re getting paid well and you know Google, you go to meta and you get paid more, and vice versa.
00:19:54 Speaker 2
So there’s a natural effect of people being able to do that in certain markets, but when you impose a margin and essentially say you can only make 10% because the rest of these profits are given to these folks because I’ve imputed their new wage to be something that’s much greater than what they were.
00:20:09 Speaker 2
Paying before the unfortunate thing is what Friedberg said, which is that you will rebuild.
00:20:15 Speaker 2
That business without those people because it is the rational thing to do.
00:20:20 Speaker 2
And so unfortunately what you’ll do is you’ll take a bunch of people that should be in the economy.
00:20:25 Speaker 2
Right. Think about like.
00:20:26 Speaker 2
New immigrants are young people that are first getting on their feet.
00:20:29 Speaker 2
They’ll take these jobs, you know?
00:20:31 Speaker 2
I mean, I’ve worked at Burger King.
00:20:33 Speaker 2
I worked at Burger King when I was 14.
00:20:35 Speaker 2
That’s how I got the past first.
00:20:37 Speaker 2
You know those jobs won’t be there to be had, and that has ripple effects as these folks get older or try to get more ingrained in the economy.
00:20:45 Speaker 2
And this is what I wish California would understand is that these things aren’t free, and even though they seem like you’re coming to someone rescue.
00:20:54 Speaker 2
So there’s all kinds of unintended consequences and very obvious consequences.
00:21:00 Speaker 2
That you’re ignoring.
00:21:01 Speaker 2
By not really understanding how the economy works.
00:21:04 Speaker 2
I’ll just say like, look, beat people, I can tell, sorry sack, but I mean, you know, the people that are elected are elected by the people to represent the people they’re not elected to govern.
00:21:14 Speaker 2
Over the long term plan necessarily for the state and while you think that those two.
00:21:19 Speaker 2
May be the.
00:21:20 Speaker 2
Same the near term incentive and the near term motive.
00:21:23 Speaker 2
Mission of someone who’s voting is I want to get a benefit for myself sooner rather than later.
00:21:29 Speaker 2
Not necessarily.
00:21:30 Speaker 2
I want to make an investment for 30 or 40 years down the road, and if you’re an individual that’s struggling in some way, you’re going to prioritize the former over the latter and you’re going to elect someone who’s going to go put in place public policy.
00:21:43 Speaker 2
That’s going to benefit you, so I don’t necessarily raise my hand and say I blame the people that have been ill.
00:21:48 Speaker 2
Second, I raised my hand and I say, look, this is the natural evolution of what happens in a democracy where there is a struggling class and there were, where there is some sort of view disparity or considered disparity.
00:22:01 Speaker 2
That this is what’s going to happen in a democracy under this condition is that you’re going to elect individuals who are going to go and govern and they’re going to make decisions and benefit.
00:22:08 Speaker 2
Those individuals that got them elected over the short term and there may be some real long term damage that results.
00:22:14 Speaker 2
Sacks is a part of this problem is that that people are now looking to the government to solve their problems in life versus maybe looking internally to solve their problems and.
00:22:25 Speaker 2
You know, negotiate better salaries and more.
00:22:27 Speaker 2
Think you have to give people a little bit more credit.
00:22:29 Speaker 2
Nobody was asking for them to step in like this.
00:22:32 Speaker 3
Look, this is as much for the politicians as it is for any of the workers.
00:22:36 Speaker 3
What’s happening right now?
00:22:37 Speaker 3
The National Restaurant Association, when all these restaurant lobbying groups are flooding the state, the legislators, the governor with lobbying money because they want to get this bill modified, tempered, or thrown out.
00:22:49 Speaker 3
And so this is basically a racket like look as a public policy matter, it makes zero sense for the same worker.
00:22:58 Speaker 3
If they go work at, say, Jiffy Lube or something outside the restaurant industry, they get the California minimum wage of $15.
00:23:04 Speaker 3
If they go to a mom and pop restaurant, they get their own wage of $15.00. But if they go to McDonald’s?
00:23:09 Speaker 3
We now get a new middle range specifically for chain restaurants of $22.00 that simply makes no.
00:23:15 Speaker 3
Since there’s no public policy rationale, but the real question you have to ask, and Trump is kind of getting at This is why shouldn’t it be $50?
00:23:22 Speaker 3
Why shouldn’t it be $100? Well, the reason is because if you raise the minimum.
00:23:26 Speaker 3
Wage too much, then.
00:23:27 Speaker 3
These employers have a huge incentive to.
00:23:31 Speaker 3
Replace that labor with.
00:23:32 Speaker 3
Automation, and so the unintended consequences.
00:23:35 Speaker 3
Smith is talking about is that these big chain restaurants?
00:23:38 Speaker 3
Are going to rely even more heavily on automation now and they’re going to basically employ less of this labor where the price has been artificially raised for that sub sector of the economy from 15 to $22.00 for reasons that no one can really explain.
00:23:53 Speaker 3
So, again, this is not for the benefit of workers.
00:23:55 Speaker 3
It’s for the benefit of politicians.
00:23:57 Speaker 3
Look what’s.
00:23:57 Speaker 3
Happening right now.
00:23:58 Speaker 3
There’s all these articles talking about the lobbyists coming in.
00:24:01 Speaker 3
They’re going in Abbott, Gavin Newsom, begging him to be their savior right now.
00:24:06 Speaker 3
And this is the game that the California Democratic Party plays, is a one party state where they were basically business loves Gavin Newsom because he’s her protector.
00:24:14 Speaker 3
He’s the protection end of the extortion racket.
00:24:16 Speaker 3
Lorena Gonzalez gets this bill path, which is.
00:24:19 Speaker 3
Basically incredibly damaging to these chain restaurants and they have to go running to Gavin Newsom and beg him to either veto it or modify a temporary the bill so it’s not as destructive to the.
00:24:31 Speaker 3
He’s the protection in the extortion racket, but it’s the same racket.
00:24:34 Speaker 3
This is a one party state, and what they’re doing with chain restaurants they would do with every sector of the economy if they could.
00:24:40 Speaker 3
It’s just a matter.
00:24:41 Speaker 2
Of time.
00:24:42 Speaker 2
And what is the purpose of the California government?
00:24:44 Speaker 2
Like, are there things they could be focusing on other than this?
00:24:47 Speaker 2
Like maybe the free market settles this issue and make it like this on the stools?
00:24:49 Speaker 3
To extract benefits from the private sector from basically the wealth producing party economy.
00:24:56 Speaker 3
And to line.
00:24:57 Speaker 3
Their pockets, in the pockets of their supporters, you know that the typical government worker in.
00:25:01 Speaker 3
Four, yeah, makes 53% more than a private sector or counterpart, and if you factor in all the pensions have been promised, it’s 100% more.
00:25:10 Speaker 3
OK.
00:25:11 Speaker 3
So basically there’s a huge wealth transfer that’s taking place where they were basically the legislatures, the party they are transferring wealth from the private sector.
00:25:22 Speaker 3
To their supporters, they’re back.
00:25:24 Speaker 3
Here’s an free when you talk about democracy, listen, I mean, California is a one party state, and ballot harvesting is legal here.
00:25:31 Speaker 3
I’m not saying the votes are fake or anything like that, but there’s a giant party machinery and apparatus that really just goes door to door and collects the ballots from their supporters.
00:25:41 Speaker 3
They literally know who their supporters are on a door by door.
00:25:44 Speaker 3
Household by household level, it has gotten to the point now where the party machine is so powerful they could pretty much run anybody for any post and get them elected.
00:25:55 Speaker 3
It’s very hard for an outsider.
00:25:57 Speaker 2
No, but but see how long?
00:25:57 Speaker 3
Candidate for example.
00:25:59 Speaker 2
It does feel like people are getting tired of it here?
00:25:59 Speaker 1
Hello guys.
00:26:00 Speaker 2
No, but guys, that’s exactly how it works.
00:26:02 Speaker 2
I mean, like if you look at.
00:26:04 Speaker 2
Gavin Newsom’s run to the governorship. He paid his dues. He did the right jobs. He waited in line.
00:26:11 Speaker 2
He didn’t, you know, rock the boat, independent of any of the things he did right or wrong.
00:26:16 Speaker 2
And he had some pretty big moral transgressions.
00:26:18 Speaker 2
It didn’t matter because it is about paying your dues and waiting in line because there aren’t any.
00:26:24 Speaker 2
Meaningful challenges here.
00:26:25 Speaker 2
Now I’ll tell you guys, yeah, yeah.
00:26:26 Speaker 3
So in LAN, LAN, LAN right now, there’s a mayoral race going on and the two, there’s a runoff between Rick Russo and Karen Bass.
00:26:35 Speaker 3
It Karen Bass is basically a product of the political machine.
00:26:39 Speaker 3
She’s basically worked our way up in the Democratic Party forever.
00:26:41 Speaker 3
Sort of uninspiring candidate. She’s just basically a puppet of the machine. Caruso is actually, he’s a real estate developer who’s built some of the most landmark, you know, spots in LA like the Grove, like the Pacific Palisades.
00:26:55 Speaker 3
Development. He’s made incredible.
00:26:59 Speaker 3
He’s created incredible amenities for the LA area. He’s also been on a bunch of civic boards. You know, I had lunch with him at the Grove and people were coming up to him.
00:27:08 Speaker 3
He’s like a celebrity. They’re taking photos with him. He’s the best possible candidate that you could have in a place like LA. He actually understands business. I think he would restore.
00:27:19 Speaker 3
Law and order, I mean all this kind of stuff, right?
00:27:21 Speaker 3
You’ve spoken out about the homeless.
00:27:22 Speaker 3
Problem being out of control.
00:27:24 Speaker 3
And on election night he had the most votes.
00:27:27 Speaker 3
But five days later, when they counted all the the basically the collective ballots through ballot harvesting, Karen Basals up by like 5 points.
00:27:34 Speaker 3
That is the power of the ballot harvesting, and I still hope that he wins.
00:27:40 Speaker 3
But the party machine is so powerful they can basically get almost anyone.
00:27:44 Speaker 3
Electing this state and I don’t know.
00:27:45 Speaker 2
Can’t get the.
00:27:46 Speaker 2
Ballot harvesting worth full price at church.
00:27:46 Speaker 3
I don’t really know what it’s going to.
00:27:47 Speaker 3
Take to change it, but what’s that?
00:27:49 Speaker 1
Right.
00:27:49 Speaker 2
Just tell us advocate here the the ballot harvesting can work both ways like.
00:27:52 Speaker 2
You could go collect Republican votes.
00:27:54 Speaker 3
No, but you have to have the party infrastructure to literally go.
00:27:57 Speaker 2
God OK, so the Republican hasn’t, Republicans haven’t.
00:27:57 Speaker 3
Door to door and collect there.
00:28:00 Speaker 3
No, yeah, let’s see about it this way.
00:28:00 Speaker 2
Built that in this state.
00:28:02 Speaker 3
OK, so you know.
00:28:04 Speaker 3
Like your phone, there’s a platform and there’s an app.
00:28:06 Speaker 3
Think about the party as the platform and the candidate as the app, OK?
00:28:11 Speaker 3
The platform can drive a ton of traffic to whatever app they want.
00:28:14 Speaker 3
A guy like Caruso doesn’t have the party behind him, so he has to build his own.
00:28:19 Speaker 3
Operating system as opposed to unblock them?
00:28:19 Speaker 2
So you use the media, right?
00:28:22 Speaker 3
So he has to build their own platform.
00:28:23 Speaker 3
Then he has to build his own candidacy.
00:28:25 Speaker 3
So when we think about the amount of money that’s required to do something like that, about how hard it is to do.
00:28:30 Speaker 3
But it’s it’s very, very hard. So he spent something like $100 million or money. Hopefully he wins.
00:28:36 Speaker 3
But if he doesn’t, all the infrastructure, all the platform that he created just goes away.
00:28:42 Speaker 3
And then the next.
00:28:42 Speaker 3
Candidate has to start from scratch.
00:28:44 Speaker 3
This is why outsiders it’s almost impossible.
00:28:45 Speaker 2
Slightly GOP investing.
00:28:47 Speaker 2
Why hasn’t GOP invested in California?
00:28:48 Speaker 2
They just don’t think they have any shot ’cause it seems like the Democrats are investing heavily in trying to flip, you know, brought up with Texas.
00:28:54 Speaker 3
Look, there’s a 2 to one party affiliation.
00:28:56 Speaker 3
There’s a 2 to one party affiliation in California towards Democrats.
00:29:00 Speaker 3
So look, I mean the Republican Party here is a mess and that’s part of the problem is the Republican Party in California needs.
00:29:06 Speaker 3
To move to the center, it’s a + 30 blue state.
00:29:09 Speaker 3
Unless they’re going to do that, they’re not going to make progress.
00:29:12 Speaker 3
But that could take, you know, generations to.
00:29:14 Speaker 3
Fix and overload.
00:29:15 Speaker 2
And that kind of stuff is going to.
00:29:16 Speaker 2
Be really hard to yeah.
00:29:18 Speaker 3
Look, there are pro-choice Republicans in California, but all Newsom has to do is point to what’s happening in Texas.
00:29:25 Speaker 3
And, you know, all of a sudden people kind of revert to their tribal political affiliations.
00:29:31 Speaker 2
I’ll make I’ll make one more simple point.
00:29:34 Speaker 2
The average voter in California probably knows more people that work at McDonald’s.
00:29:38 Speaker 2
Than are shareholders of McDonald’s.
00:29:40 Speaker 2
And I think in anytime that there’s policy that gets voted or gets suggested or ultimately gets passed, there’s a side that benefits and there’s a side that doesn’t.
00:29:50 Speaker 2
And as you know more people that benefit on one side than or hurt, you’re probably going to be supportive of that policy.
00:29:56 Speaker 2
And I think that’s probably a pretty simple rubric for thinking about how these things.
00:30:00 Speaker 2
Over time, evolving the sums that be shipping.
00:30:02 Speaker 3
I don’t think that’s true, actually.
00:30:04 Speaker 3
Why is that only true for California?
00:30:06 Speaker 3
I mean, like in Florida, like the average person in Florida knows more people who work in McDonald’s and shareholders McDonald’s are they’re not engaged in a systematic takeover of the private sector.
00:30:07 Speaker 2
No, I yeah, I think over time it’s yeah.
00:30:18 Speaker 2
Both offically, they’re they believe in independence and businesses not being interfered by the government, right?
00:30:23 Speaker 2
It’s a Cortana of the Republican Party.
00:30:25 Speaker 2
Also, the sad reality is that within a few years, unfortunately, you’ll know a lot fewer people that work at McDonald’s because the number of jobs for humans will be dramatically lower.
00:30:37 Speaker 2
They got rid of the cashier’s.
00:30:38 Speaker 2
And or what people will be more acutely?
00:30:40 Speaker 2
Aware of in a number of years is how expensive McDonald’s has gotten.
00:30:44 Speaker 2
Because if the price.
00:30:45 Speaker 2
Don’t know that that won’t.
00:30:46 Speaker 2
Because, like, again, McDonald’s has it.
00:30:48 Speaker 2
Very simple.
00:30:48 Speaker 2
No, not, not even the market.
00:30:50 Speaker 2
McDonald’s is not stupid.
00:30:51 Speaker 2
They understand how to use Excel, and so they’ll think, well, I can advertise a robot.
00:30:56 Speaker 2
Birth is actually jacking up prices because what McDonald’s understands is the sensitivity of pricing to demand for their product.
00:31:04 Speaker 2
Yeah, that’s right.
00:31:05 Speaker 2
I mean they are the most intelligent about how they price every anything at the sort of the lower end where you.
00:31:11 Speaker 2
Capturing, you know, nickels and Dimes, they are the most sophisticated and understanding supply, demand and and the curves and so to think that they’re not going to just invest heavily now at the corporate level.
00:31:23 Speaker 2
The next franchise of McDonald’s will still pay $1,000,000 for franchise fee, but will give will be given a bevy of robots that they run from McDonald’s and they’ll have to hire half.
00:31:32 Speaker 2
The third.
00:31:33 Speaker 2
That’s that’s the real shame of this, which is the number of people that should actually be gainfully employed in the economy will then shrink again.
00:31:40 Speaker 2
But in this case, it was because legislators just completely don’t understand how incentives work and how the.
00:31:48 Speaker 2
Economy works and.
00:31:49 Speaker 2
People are not clued into exactly how well narrow AI.
00:31:54 Speaker 2
Machine learning is doing.
00:31:55 Speaker 2
By the way, I’ll say like Jim, what’s really moving quickly, one general way to think about this is, is technology is introduced and the technology creator captures roughly 1/3 to 1/2 of the value increment because of the delivery of that technology, the productivity increment.
00:32:10 Speaker 2
So let’s say that it costs $1215.00 an hour to employ a McDonald’s labor today. And let’s say that you can build technology that the amortized robotic cost is $10.00 an hour.
00:32:21 Speaker 2
There will be a technology company that will make 250 an hour off of that. So net, net what ends up happening is productivity has to be gained.
00:32:29 Speaker 2
And prices will reduce.
00:32:31 Speaker 2
And so, you know, there are moments like this where there could be an acceleration of technology and also an opportunity for new industries to emerge.
00:32:37 Speaker 2
And when that happens, new jobs emerged too.
00:32:41 Speaker 2
It’s, you know?
00:32:41 Speaker 2
Maybe look, I mean at the end of the.
00:32:43 Speaker 2
Day, it seems, Luddite ish.
00:32:44 Speaker 2
But you know, there’s going to be a market.
00:32:46 Speaker 2
Market opportunity that.
00:32:47 Speaker 3
Will arise.
00:32:48 Speaker 3
I think we need to like.
00:32:49 Speaker 3
Just step back and.
00:32:51 Speaker 3
And ask what is the type of economy that California is creating here with this fast food law, with these other walls we’re talking?
00:32:57 Speaker 3
About this is a.
00:32:58 Speaker 3
State in which you have a disappearing middle class.
00:33:02 Speaker 3
The middle class has been moving out of the state by the hundreds of thousands.
00:33:06 Speaker 3
In fact, last year we had for the first time net migration out of the state.
00:33:10 Speaker 3
This has basically become a state where the only middle class are basically the government workers who, like we talked about, are making twice as much as their private sector counterparts.
00:33:19 Speaker 3
It’s a state where we have the very rich and very poor and the only middle class or government workers.
00:33:24 Speaker 3
That is what we’re creating the rich in this state have.
00:33:26 Speaker 3
Done really well.
00:33:27 Speaker 3
Over the last few decades.
00:33:29 Speaker 3
Because of globalization.
00:33:30 Speaker 3
So you take the two big industries in the state.
00:33:32 Speaker 3
Tech and Hollywood entertainment.
00:33:36 Speaker 3
They have benefited enormously through globalization, because now you can sell software.
00:33:40 Speaker 2
Yes, global export.
00:33:40 Speaker 3
Or you can.
00:33:41 Speaker 3
Sell movies or music.
00:33:43 Speaker 3
So now these these industries have become, you know, massive global exports and so if you’re in those industries in California, you’ve done really well because now.
00:33:55 Speaker 3
Your market is the whole world, so the Super rich have done really well that’s funded this state, that’s allowed this state.
00:34:01 Speaker 3
It’s almost like a resource curse to have all these bad policies that really hurt small business owners.
00:34:07 Speaker 3
They’ve been moving out of the state and so again, you’ve got the very rich and very poor.
00:34:11 Speaker 3
This is not an economic model for the entire nation.
00:34:14 Speaker 3
This is why, you know.
00:34:15 Speaker 3
Gavin Newsom says he wants to take to all of America.
00:34:18 Speaker 3
This is not a model for all of America in order for democracy to function with a thriving middle class.
00:34:23 Speaker 3
And this is not a recipe for delivering a thriving middle class to America.
00:34:28 Speaker 2
And I just want to show you guys a quick video.
00:34:31 Speaker 2
Let’s play for five seconds here.
00:34:34 Speaker 2
We had invested in this company and got sold.
00:34:36 Speaker 2
I’m not even say.
00:34:37 Speaker 2
The name of it.
00:34:37 Speaker 2
But if you watch this quick robot, this is a computer vision company out of Boston.
00:34:44
And like.
00:34:45 Speaker 2
They’re doing high speed picking.
00:34:47 Speaker 2
Of tomatoes and berries.
00:34:49 Speaker 2
Like this is a 2.
00:34:50 Speaker 2
Year old video when we invested amount of getting bought by another company and they’re doing vertical.
00:34:54 Speaker 2
Farming that.
00:34:56 Speaker 2
And there’s companies doing this now for French fries. It’s over like we are within, you know, I think 510 years of a lot of these jobs.
00:35:05 Speaker 2
I’ve been talking 10s of millions of manual labor jobs being gone and and we’re going to look at this moment in time when we try to squeeze an extra 10 or 20% out of these, you know?
00:35:17 Speaker 2
Employers and then you’re going to see these employers say, you know what, 24 hour day robot? Yeah, it’s a little bit up front costs.
00:35:24 Speaker 2
I’ll put it on the lease and they’re just going to move to these robots.
00:35:27 Speaker 2
It’s it’s really very close to being game over for manual labor.
00:35:31 Speaker 2
And you can see it also with cyber truck and you know what Elon is doing with AI and and these things are getting so close and it’s been, I don’t know when did you invest in your first robotics or AI company, Sachs or trauma. Do you remember the first robotic or AI company invested in and how long ago was 2000?
00:35:53 Speaker 2
It’s a company called Relativity Space which is 3D printing rockets and engines.
00:35:59 Speaker 2
And basically, they’re able to use machines to learn how to actually fix the morphology of all the materials that they use to print better and cheaper, more useful rocketry.
00:36:09 Speaker 2
That’s an example, but then that led me down the garden path.
00:36:13 Speaker 2
I was just going to say something more.
00:36:14 Speaker 2
Generic instead of talking our book which is.
00:36:17 Speaker 2
Uhm, I think people misunderstand that Moore’s law.
00:36:24 Speaker 2
Has actually not ended.
00:36:27 Speaker 2
And this is something that.
00:36:30 Speaker 2
A friend of mine, Adam D’Angelo, characterized to me beautiful human being.
00:36:35 Speaker 2
He and I wrote together he well, he was a CTO Facebook when I worked there.
00:36:38 Speaker 2
So we this.
00:36:39 Speaker 2
Is you know, we we’ve known each other for 1516 years and now he’s.
00:36:42 Speaker 2
A CEO and.
00:36:43 Speaker 2
Founder of core.
00:36:44 Speaker 2
But you know, the the way that he described, which is so true, then if he said it, I was like, Oh my gosh, it’s like worst.
00:36:50 Speaker 2
Never ended.
00:36:51 Speaker 2
It just shifted to Hughes.
00:36:53 Speaker 2
You know, because the inherent lack of parallelization that CPU’s have, you solve the GPUs. And so that’s why the surface area of compute of innovation has actually shifted, chasing to what you’re saying, which is, you know, all of.
00:37:08 Speaker 2
These new kinds.
00:37:09 Speaker 2
Of machine learning models because you can just now brute force.
00:37:13 Speaker 2
And create such a.
00:37:14 Speaker 2
Tonnage of compute.
00:37:14 Speaker 2
Capabilities and resources to solve these problems that weren’t possible before.
00:37:19 Speaker 2
So, you know, you see this thing, you know, fun things like Wally or, you know, Downey.
00:37:26 Speaker 2
And more sophisticated things like GPT 3.
00:37:29 Speaker 2
But he’s right, which is that, you know, we are at a point now where all kinds of expert systems, which is sort of like V1 simple forms of.
00:37:37 Speaker 2
Are are going to be completely next level?
00:37:40 Speaker 2
And you think about the datasets adding to that.
00:37:42 Speaker 2
And so when covered.
00:37:44 Speaker 2
And so when governments don’t understand this and they try to it, you know, step in, they’re going to be shocked at how much faster.
00:37:50 Speaker 2
They’re pulling forward.
00:37:51 Speaker 2
The actual future they actually are trying to prevent, yeah.
00:37:54 Speaker 2
The the datasets is the other issue.
00:37:56 Speaker 2
Freeburg you look at you know the the datasets that are available to train, so you have the GPU’s still.
00:38:03 Speaker 2
Escalating massively the amount of compute power can do.
00:38:06 Speaker 2
You have cloud computing at the same time and they have these datasets or the most interesting things about you know Dolly and a lot of these is the corpus updated are able to absorb.
00:38:15 Speaker 2
And a second factor issue.
00:38:17 Speaker 2
That is starting to come up.
00:38:18 Speaker 2
As who owns the derivative work in copyright?
00:38:21 Speaker 2
So if you train your data set.
00:38:23 Speaker 2
On a bunch of images and those images.
00:38:25 Speaker 2
Are owned by Disney or.
00:38:27 Speaker 2
Whoever you know, photographer Getty.
00:38:29 Speaker 2
And then the AI makes you a new photo.
00:38:32 Speaker 2
Yeah, here’s another.
00:38:33 Speaker 2
Here’s another example of this.
00:38:34 Speaker 2
Here’s another.
00:38:35 Speaker 2
Here’s another example of this in the law that just passed.
00:38:37 Speaker 2
So in the IR a.
00:38:38 Speaker 2
The Inflation Reduction Act, you know, we granted CMS and Medicare the ability to negotiate drug prices and we actually also capped.
00:38:49 Speaker 2
The total prescription cost that any American can pay at $2000. Now it turns out that, overwhelmingly, most Americans will never spend $2000 a year on prescription medications.
00:39:01 Speaker 2
But there will be a few, and they bump up against drugs that cost millions of dollars.
00:39:05 Speaker 2
So there was a, you know, there’s a drug for.
00:39:08 Speaker 2
You know.
00:39:08 Speaker 2
Smacc, that’s like, you know, 2.4 million and like, you know?
00:39:14 Speaker 2
Beta thalassemia of like 2.8 million and and we will all bear the cost of that. Now if CS and Medicare go and really crunch those costs, what is farmer going to do while pharma is going to do what is the obvious thing which is like if you’re going to cap.
00:39:34 Speaker 2
What I can make, I have to completely change my R&D model and they’re just going to use alpha fold, you know, and what it’s really going to do is potentially put a bunch.
00:39:43 Speaker 2
Of research scientist.
00:39:44 Speaker 2
It’s out of work, and those are folks that should probably with, you know, for our general future, be gainfully employed.
00:39:52 Speaker 2
But the nature of their job is going to change completely because the economic capitalist incentive of big Pharma is going to move towards technology which is, you know, an alpha fold and their protein library is the equivalent of AI.
00:40:04 Speaker 2
And automation for McDonald’s.
00:40:06 Speaker 2
So this is where, again, governments have to be super careful that they understand what’s actually happening ’cause they’re creating incentives, I think that they don’t completely.
00:40:14 Speaker 2
Stand all right, we can go to raw meat for sacks Zuckerberg.
00:40:19 Speaker 2
Admission of FBI meddling.
00:40:22 Speaker 2
Truth social how?
00:40:23
Well, I’m sure you guys.
00:40:23 Speaker 3
How that one?
00:40:24 Speaker 3
Disputed me and like, how dare you imply that J Edgar Hoover and Jim comedy FBI is politicized number you guys were debating and shot?
00:40:32 Speaker 2
So I got that was about the inviting status.
00:40:35 Speaker 3
You didn’t, but some of you would say I can’t.
00:40:37 Speaker 3
Believe Saxy, you’re part.
00:40:38 Speaker 3
Of the 35% of Americans who don’t believe fully in the rectitude and integrity.
00:40:44 Speaker 3
Of the FBI.
00:40:45 Speaker 1
After what?
00:40:45 Speaker 2
Actually, I don’t know if this is FBI madalaine yeah.
00:40:47 Speaker 3
And now comes this bombshell.
00:40:50 Speaker 3
I mean, you gotta admit, this was.
00:40:51 Speaker 2
A bombshell?
00:40:52 Speaker 2
What was a bombshell?
00:40:53 Speaker 2
So, OK, OK, so Joe, Joe Rogan had Zach on and he asked him about this very specific thing.
00:41:00 Speaker 2
Remember the New York Post story on Hunter Biden laptop in, like the week or two before the election was censored, right?
00:41:06 Speaker 2
And there’s a very controversial thing because the FBI was dealing with.
00:41:10 Speaker 2
Known Russian interference and hacks and all this stuff.
00:41:15 Speaker 2
Part of which Trump was like asking people to hack other candidates.
00:41:18 Speaker 3
OK, you’re not even setting this.
00:41:19 Speaker 3
Up correctly, you’re like.
00:41:19 Speaker 2
Well, OK, I’m going to keep going.
00:41:21 Speaker 2
And then, so this is what Zuckerberg said.
00:41:23 Speaker 2
Look, let’s get outside to moderate this.
00:41:26
I mean, I’m just going to.
00:41:26 Speaker 2
Read the Federalist, which is, you know, simple, right?
00:41:29 Speaker 2
Wing, but he says, I’ll just.
00:41:30 Speaker 2
Read you what? Zach said.
00:41:31 Speaker 2
’cause, that’s says it all, he says.
00:41:33 Speaker 2
Hey, look, if the FBI.
00:41:35 Speaker 2
Which I still view as a legitimate institution in this country.
00:41:38 Speaker 2
I’m quoting from the Federalist.
00:41:39 Speaker 2
Quoting him from.
00:41:40 Speaker 2
It’s a very professional law enforcement.
00:41:42 Speaker 2
They come to us and tell us we need to be on guard about something.
00:41:46 Speaker 2
I want to take it seriously. So when the New York Post broke the Hunter Biden laptop story on October 14, 2020, Facebook treated the story as potentially misinformation, importing this information for five to seven days while the tech giants team could determine whether it was false.
00:42:00 Speaker 2
Or not during that time.
00:42:01 Speaker 2
This is federal speaking decrease its tradition.
00:42:05 Speaker 2
Facebook decreased distributional story by making the story rank lower in the news feed.
00:42:11 Speaker 2
And this is his quote Zuckerberg.
00:42:13 Speaker 2
You could still share it, you could still consume it, Zuckerberg explained.
00:42:17 Speaker 2
But quote few people sought.
00:42:19 Speaker 2
Than would have otherwise.
00:42:22 Speaker 2
And while he would not quantify the impact, the Facebook founder said the decreased distribution was quote UN quote meaningful. And a follow up.
00:42:30 Speaker 2
Well, when asked if the FBI had specifically said quote to be on guard about that story, meaning the laptop story after allegedly bonding no second birth correct themselves.
00:42:40 Speaker 2
I don’t remember if it was that specifically.
00:42:42 Speaker 2
That was based on the pattern.
00:42:43 Speaker 2
So basically I guess you would agree sacks, Zuck didn’t know exactly what to do here with this information.
00:42:48 Speaker 2
And and if it was real or not, which, you know, turned out to be very real and it probably could have swayed the election.
00:42:55 Speaker 2
I mean, I do think if people thought there was a connection between Hunter Biden, maybe it could have, I don’t know if we want people being hacked to do that.
00:43:05 Speaker 2
So what’s your take on?
00:43:06 Speaker 2
It’s actually, you know, just hacking in general and this specific thing.
00:43:09 Speaker 2
What should the FBI do if these kind of?
00:43:12 Speaker 2
Hacks are getting released of people, families.
00:43:14 Speaker 2
Should do, yeah.
00:43:14 Speaker 3
OK, so here’s what actually happened.
00:43:15 Speaker 2
It’s a complicated issue, right?
00:43:17 Speaker 2
There’s many vectors, yeah.
00:43:18 Speaker 3
What doc basically says the FBI came to to them and encouraged them to suppress this story or to suppress a story that they described that would be just like this, OK?
00:43:29 Speaker 3
So now look, a lot of consumers are dragging Zuckerberg and Facebook for doing, for doing the FBI’s bidding.
00:43:34 Speaker 3
But I think a lot of people, I think most people in Zuckerberg’s position would have.
00:43:39 Speaker 3
Believed the FBI.
00:43:39 Speaker 3
Where the FBI comes to you and says you’re about to be targeted by Russians information, you should do something about it.
00:43:45 Speaker 3
You would have listened to the FBI.
00:43:47 Speaker 3
He believed the FBI.
00:43:48 Speaker 3
My point and so I don’t blame Facebook too much for that.
00:43:52 Speaker 3
I think it’s understandable that he would have believed that the issue here is the politicization of the FBI.
00:43:57 Speaker 3
Look, let’s back up what was happening. So the New York Post gets this story about the leak contents of Hunter Biden’s hard drive in response to.
00:44:05 Speaker 3
That you had 50 former security state officials, many of whom were democratic partisans like Clapper, like Brennan.
00:44:16 Speaker 3
They signed a letter saying that this story has all the hallmarks of Russian disinformation now.
00:44:22 Speaker 3
The truth is, they had not inspected the hard drive they simply said.
00:44:26 Speaker 3
This is the hallmarks of it, and as a result of that we thought that the social networks and so forth censored the story.
00:44:33 Speaker 3
OK, now it turns out that the FBI, by the way, the FBI had the hard drive they had the hard drive for over.
00:44:39 Speaker 3
A year it was in their possession.
00:44:39 Speaker 1
Is that an image of?
00:44:41 Speaker 2
The hard drive or the actual hard drive?
00:44:42 Speaker 3
They had the actual hard drive after the leak of the story was was likely prompted because the FBI didn’t appear to do anything with the hard drive.
00:44:50 Speaker 3
So somebody leaked the story to, you know, to Rudy Giuliani and then he leaked it so forth, the New York Post.
00:44:58 Speaker 3
But the point is that the FBI had the hard drive so they knew was authentic.
00:45:02 Speaker 3
OK, so they knew that this hallmarks of Russian disseration was not the truth, because again, they had the authenticated hard drive in their possession.
00:45:10 Speaker 3
And yet they still went to Zuckerberg and basically played into this narrative, this phony narrative that, you know, democratic partisans like Clapper and like Brennan had created.
00:45:22 Speaker 2
Was there anything meaningful by the way, about what was on the laptop in your mind?
00:45:22 Speaker 3
And it was on that.
00:45:26 Speaker 2
Like do you think it’s relevant or do you think we want people laptops being hacked like this, wherein people political families?
00:45:32 Speaker 3
I don’t think the laptop was hacked.
00:45:32 Speaker 2
Just rest.
00:45:35 Speaker 3
I mean, there’s a weird convoluted story about how the laptop ended up, but but look, the the point is that.
00:45:37 Speaker 2
Yeah, well, I guess we’ll never know.
00:45:40 Speaker 2
Should these those personal pictures?
00:45:42 Speaker 2
You know, and stuff like that be released.
00:45:43 Speaker 3
Never liked the part where they were showing Hunter Biden’s, you know, drug use and the other personal stuff. I thought that was calculus and I didn’t. I didn’t like it and I didn’t think that was.
00:45:49 Speaker 2
I bought remembers.
00:45:51 Speaker 2
It’s tax stuff, yeah.
00:45:56 Speaker 3
Particularly germane.
00:45:57 Speaker 3
So I think and I think it was invasion of his privacy.
00:46:00 Speaker 3
However, there were materials on there related to his business dealings in Ukraine and I don’t say see how you can say those weren’t relevant to to an election, yes.
00:46:07 Speaker 2
Oh, I think they’re.
00:46:07 Speaker 2
Highly relevant.
00:46:08 Speaker 2
He’s being investigated for them too now.
00:46:10 Speaker 2
I mean, a lot of this has to do with timing.
00:46:11 Speaker 2
Too, you know.
00:46:12 Speaker 2
It’s like, how do you deal with something like this seven days before an election when you know the Russians are hacking it if it has been or?
00:46:18 Speaker 2
Not it’s a.
00:46:19 Speaker 2
Really difficult situation for everybody I think.
00:46:21 Speaker 3
So, So what?
00:46:21 Speaker 3
My point my point is this that I I can agree with you about the personal stuff about Hunter Biden shouldn’t come out.
00:46:27 Speaker 3
But but with respect to the Ukraine stuff, that was legitimate.
00:46:30 Speaker 3
It was fair game.
00:46:31 Speaker 3
And the most importantly, I don’t know whether we’re destroying the election or not.
00:46:35 Speaker 3
Probably not.
00:46:36 Speaker 3
Probably by itself, it’s not.
00:46:37 Speaker 3
But the real point here is that the FBI went to Facebook to censor a story that they must have known was true because they had the laptop in their possession.
00:46:47 Speaker 3
They should not be intervening in elections that way.
00:46:50 Speaker 3
That is the bombshell here.
00:46:51 Speaker 3
That’s unbelievable.
00:46:52 Speaker 2
I think they didn’t know the Providence of this, but I guess we’ll.
00:46:55 Speaker 2
Find out where are.
00:46:56 Speaker 3
Well, how?
00:46:56 Speaker 3
You landing Providence of a hard drive is in their possession.
00:47:00 Speaker 2
I’m having FT.
00:47:01 Speaker 2
Exactly where?
00:47:03 Speaker 2
How are you?
00:47:04 Speaker 3
Got a full circle trimat, yes.
00:47:04 Speaker 2
I think the audience exactly audience wants to know.
00:47:07 Speaker 3
I never got up too, but.
00:47:08 Speaker 2
Sachs audience really wants to know.
00:47:10 Speaker 2
You were going to reserve judgment on the malogo search.
00:47:13 Speaker 2
Where do?
00:47:14 Speaker 2
You end or.
00:47:15 Speaker 2
Republicans come out on all this now when you see like he did, in fact have a ton of really sensitive stuff, like it’s not.
00:47:22 Speaker 3
With the front hand and defined ton of really sensitive stuff.
00:47:24 Speaker 1
Toxins, yeah, I mean.
00:47:26 Speaker 3
Listen, we had 300 pages.
00:47:26 Speaker 2
Any any wouldn’t give it back like what’s your?
00:47:28 Speaker 3
What is your agent if documents marked classified?
00:47:31 Speaker 3
If you were to go to the 30,000 boxes of documents that Obama took, are you telling me you really couldn’t find through in the pages that have classified markings?
00:47:40 Speaker 3
On them, but the fact that.
00:47:41 Speaker 3
I never received.
00:47:42 Speaker 2
I guess. Just tell me.
00:47:42 Speaker 3
It by the way, I never disputed it. Hold on a second. I never disputed that they would find documents with classified markings in Trump’s basement.
00:47:49 Speaker 3
I still think that the approach was heavy-handed and we don’t know enough because we don’t know what those documents are.
00:47:55 Speaker 2
Yeah, well it’s fun and.
00:47:55 Speaker 3
Listen, every document they stick in from the president or not every, but many of them are more classified, OK?
00:48:00 Speaker 2
But well, OK.
00:48:01 Speaker 2
So let me ask you, this is aside from these like kind of details, what, what is it, what is Trump’s deal that he just wouldn’t give them back, do you think, what do you think his motivation was?
00:48:08 Speaker 2
I mean I have my own theory which he likes member.
00:48:10 Speaker 2
Well, yeah, he’s always liked to show off and.
00:48:12 Speaker 3
I think that’s it.
00:48:12 Speaker 2
Under the island.
00:48:12 Speaker 3
I think you got it.
00:48:13 Speaker 3
I mean, honestly, if I had to guess what this whole thing was about, it’s probably that the archivist at the National Archives wants the original copy of those letters with little rocket Man, and he doesn’t want to give.
00:48:24 Speaker 3
Them up.
00:48:24 Speaker 2
Right, the assorted staff dancers.
00:48:25 Speaker 3
And I really think that’s what this is about.
00:48:27 Speaker 3
I think it’s about something as silly as that.
00:48:28 Speaker 2
Memorable memorabilia.
00:48:30 Speaker 3
I think it’s about memorabilia.
00:48:31 Speaker 3
I do not.
00:48:32 Speaker 3
I think these.
00:48:32 Speaker 3
Documents pose a threat to announce their security and.
00:48:33 Speaker 2
But why wouldn’t Trump just give it all back?
00:48:35 Speaker 2
It’s so dumb.
00:48:36 Speaker 3
But why would the FBI feel the need to do away?
00:48:38 Speaker 2
Well, because there could be so much classified stuff, I guess, yeah.
00:48:38 Speaker 3
By the way, remember never.
00:48:40 Speaker 3
We first discussed with both of them.
00:48:41 Speaker 3
We first discussed this issue.
00:48:43 Speaker 3
We were told it was nuclear.
00:48:45 Speaker 3
It was nuclear secrets.
00:48:46 Speaker 2
Could be, yeah.
00:48:48 Speaker 3
No, they’ve backed.
00:48:48 Speaker 3
Off that completely.
00:48:49 Speaker 3
It was not in the affidavit.
00:48:51 Speaker 3
It’s not about nuclear.
00:48:52 Speaker 3
That was something they had leaked again through a tough press cycle.
00:48:55 Speaker 3
So, but look, my point about all this stuff, just to wrap it up so people are clear, it was never to defend Trump.
00:49:00 Speaker 3
Let’s say my real concern is the politicization of the FBI.
00:49:04 Speaker 3
Our law enforcement agencies should not be weaponized.
00:49:07 Speaker 3
By either party to pursue their political agenda.
00:49:08 Speaker 2
Would you believe they are?
00:49:09 Speaker 2
At this point.
00:49:10 Speaker 3
And we just saw with the Zuckerberg thing.
00:49:12 Speaker 3
What business did the FBI have going to Zuckerberg to get them to censor a New York Post story that turned out to be completely true?
00:49:20 Speaker 3
Hold on a second.
00:49:21 Speaker 3
That is election interference.
00:49:22 Speaker 3
They should not be doing that.
00:49:25 Speaker 2
That is.
00:49:26 Speaker 2
It’s a tough job if they don’t know if it’s been so long.
00:49:28 Speaker 2
Yeah, it’s a tough job.
00:49:29 Speaker 3
By the way, the government of the United States has no business censoring a Free Press that is a violation of the 1st amendment.
00:49:37 Speaker 3
When the government instructs a private company to censor a press story that the government itself does not have the authority to censor, that is a violation of the 1st amendment.
00:49:48 Speaker 3
We thought, remember when Jack Dorsey said that he regretted the censorship that Twitter did?
00:49:53 Speaker 3
Did, and he came out with that apology. We thought it was just Twitter’s decision. Now we find out from Zuck that he was leaned on by the FBI.
00:50:01 Speaker 3
And I think that these big tech companies like Twitter, like Facebook, they’re going to have to have a new policy, which is when the government says we want you to censor something, their response needs to be show us a court.
00:50:13 Speaker 3
Order, then you’re not just done for now based on the say so of some operative.
00:50:14 Speaker 1
I had this.
00:50:19 Speaker 2
I would.
00:50:19 Speaker 2
I would agree with you.
00:50:20 Speaker 2
I agree with you on that.
00:50:21 Speaker 2
I think it was a bad decision.
00:50:22 Speaker 2
Obviously the one big tech company like really nailed this.
00:50:25 Speaker 2
I think was.
00:50:26 Speaker 2
Apple no. Very early.
00:50:28 Speaker 2
And they drew a really hard line in the sand with the San Bernardino shooter because they said if we allow the FBI to get into this person phone, even though, you know, what he did was completely heinous, we are going to create a backdoor that will become an exploit for everybody.
00:50:45 Speaker 2
And we are drawing the line on privacy and security now.
00:50:48 Speaker 2
Different set of issues, but it just goes.
00:50:50 Speaker 2
To show you.
00:50:51 Speaker 2
There have been a few examples where some of these companies have drawn a hard line.
00:50:54 Speaker 2
And then in that example, and I think, Jason, you mentioned this, they went to Israel.
00:50:58 Speaker 2
And had that company hacked the phone?
00:51:00 Speaker 2
Sam OK, whatever.
00:51:02 Speaker 2
But it didn’t come with they were able to stand up to the pressure.
00:51:06 Speaker 2
So I think there are some examples that’s where you you can say no, I mean the, the idea that Twitter would block a New York Post URL, it’s like, ah, such a jump ball.
00:51:16 Speaker 2
Like if it was the sex material, I could understand them saying like.
00:51:20 Speaker 2
You can’t hack.
00:51:20 Speaker 2
It that’s against our terms of service for and we agree on that sex.
00:51:23 Speaker 2
But in this case, like I, I don’t know, let’s go to something more interesting.
00:51:27 Speaker 2
’cause well, he wave.
00:51:27 Speaker 2
I think in the ground a I know it’s interesting to.
00:51:29 Speaker 2
Sax but I.
00:51:30 Speaker 2
Think it’s interesting to everybody?
00:51:30 Speaker 2
Else in the.
00:51:31 Speaker 2
Audience he waves and droughts are just.
00:51:34 Speaker 3
Newsflash, it’s hot in summer.
00:51:36 Speaker 1
Yeah, I think this might.
00:51:37 Speaker 2
Have to do a global warming and.
00:51:39 Speaker 2
Be a little unique so you’re kidding before all.
00:51:39 Speaker 3
OK, OK, I’m just.
00:51:41 Speaker 3
I’m kidding.
00:51:41 Speaker 3
I’m kidding.
00:51:41 Speaker 3
Know this boards right?
00:51:43 Speaker 2
The SG people get into sacks and say you.
00:51:46 Speaker 2
Know for your globe, right?
00:51:47 Speaker 2
You believe in global warming.
00:51:48 Speaker 2
To be fair, they’re they’re all burning.
00:51:48
I I do think I do think.
00:51:50 Speaker 2
Then they’re not going to watch.
00:51:50 Speaker 3
Suggesting Gorbachev is a big story.
00:51:52 Speaker 2
OK, we’ll get to that and.
00:51:53 Speaker 3
That’s a great guy, is.
00:51:53 Speaker 2
Right.
00:51:54 Speaker 2
But let’s let’s give free.
00:51:54 Speaker 3
A big story too.
00:51:56 Speaker 2
Berkeley Science Corner, and then we’ll come back around.
00:51:58 Speaker 2
I give you.
00:51:59 Speaker 2
Zach, what’s your what’s your, what’s your point of view on climate change, the impact it will have on the planet, and whether, like urgent action is needed?
00:52:12 Speaker 3
Listen, I’m not an expert in that area.
00:52:14 Speaker 3
I’m not going to pretend to be.
00:52:15 Speaker 3
I do think that.
00:52:18 Speaker 3
That we can’t save the planet by destroying the economy.
00:52:21 Speaker 3
And it seems to me that too many of these save the planet.
00:52:24 Speaker 3
People like want to take reckless, extreme actions that would wreck our economy.
00:52:29 Speaker 3
You just saw.
00:52:30 Speaker 3
Actually, Elon just gave a a talk this and made news.
00:52:33 Speaker 3
This past week from Norway, where he said that we still need oil and gas, he’s the leading innovator in basically moving to solar and renewables.
00:52:41 Speaker 2
I don’t disagree.
00:52:42 Speaker 2
I don’t disagree, but but.
00:52:43 Speaker 3
And he said, listen, unfortunately we got to rely on oil and gas because it’s too important for civilization.
00:52:49 Speaker 3
If we cut the stuff off too quickly, we end civilization.
00:52:53 Speaker 2
And then at the end.
00:52:53 Speaker 3
Look, I mean, I.
00:52:54 Speaker 3
I think this is a long term problem, but I and I think we need to have long term solutions.
00:52:58 Speaker 2
You believe in global warming, just full stop.
00:53:01 Speaker 2
The planet is warming, you agree?
00:53:04 Speaker 2
Sure, it’s warming, just just just to use a different term.
00:53:08 Speaker 2
That there are.
00:53:09 Speaker 2
More frequent, extreme events that can severely hurt people, hurt the economy, hurt the food supply, her key energy supply.
00:53:17 Speaker 2
All the things that, you know, I think we’re like all the way on the bottom of Maslow’s hierarchy, like these are the things that are most critical that that they’re starting to get disrupted in a pretty severe way.
00:53:29 Speaker 2
You know, I think that that’s that’s I mean that’s the big question.
00:53:32 Speaker 2
So Sachs, it’s I think it’s becoming and and this is where the transition starts to happen that a lot of people kind of say, hey, over the long run the temperature is going to go up by 1 degree Celsius over a century.
00:53:43 Speaker 2
You know, who cares?
00:53:45 Speaker 3
But there are kind of the problem.
00:53:47 Speaker 3
The problem is this.
00:53:48 Speaker 3
Is that you?
00:53:49 Speaker 3
Know whatever, whatever, whatever.
00:53:49 Speaker 2
By the way, I don’t disagree with your comment.
00:53:50 Speaker 3
Somebody like me points out how insane some of these policies are.
00:53:54 Speaker 3
The topic is shifted to are you a denier of some science?
00:53:57 Speaker 3
Or other no.
00:53:59 Speaker 3
My point is not about the science.
00:54:01 Speaker 3
My point is, look at the collapse of the Sri Lankan economy because they implement these ESG rules on fertilizer.
00:54:07 Speaker 3
Look at what’s happening to the Dutch farmers who are being put out of work because of ESG rolls.
00:54:10 Speaker 2
And California, California today, governor, Governor Newsom today said please don’t use your electric power to charge your electric cars.
00:54:12 Speaker 3
Look at.
00:54:20 Speaker 2
A week after, they said gas cars are now going to be banned in the state.
00:54:25 Speaker 2
And as.
00:54:26 Speaker 2
There’s a deep irony, there’s a deep irony underway today in California because, and Fox News is obviously latched onto this.
00:54:33 Speaker 2
That has to do with your.
00:54:34 Speaker 2
Grid though I mean.
00:54:36 Speaker 3
Look, I’ve I’ve become suspicious.
00:54:37 Speaker 2
Bridge of advocates of air condition.
00:54:38 Speaker 3
Whenever, whenever politicians invoke some crisis as the other reason for some authoritarian measure, I’ve learned to distrust it.
00:54:42 Speaker 2
But I’m not talking about the.
00:54:43 Speaker 2
Political response?
00:54:44 Speaker 2
I’m not talking about the.
00:54:47 Speaker 3
That’s the point.
00:54:48 Speaker 3
And so I’m looking, you know, what’s happening in Europe right now is obviously gas is through the roof because of the Ukraine war, the, you know, the prices.
00:54:48 Speaker 2
I guess walking feet, yeah.
00:54:56 Speaker 3
Through the roof. And so because of that, they’re not able to produce fertilizer and one of the byproducts of the production fertilizer is CO2, which gets added to the production of beer to make it fizzy.
00:55:09 Speaker 3
Well, guess what?
00:55:10 Speaker 3
The Germans are not only about Gerard Gas, they’re about to run out of here.
00:55:14 Speaker 2
Is the problem.
00:55:14 Speaker 3
Do you think you think they’re going to keep supporting the Ukraine?
00:55:17 Speaker 3
Or when they?
00:55:17 Speaker 3
Find out that there’s no PS for Oktoberfest.
00:55:22 Speaker 3
Not being able to eat their heat their homes.
00:55:24 Speaker 4
They can’t drink beer in.
00:55:25 Speaker 3
October, this is the Western allies get.
00:55:27 Speaker 2
We did it.
00:55:28 Speaker 2
We did it.
00:55:28 Speaker 3
A fracture very quickly.
00:55:28 Speaker 2
We get everybody.
00:55:29 Speaker 2
To sit down.
00:55:30 Speaker 2
We got to use it.
00:55:31 Speaker 2
Just taking up, just taking apart, just.
00:55:33 Speaker 2
Taking a beat for a minute like.
00:55:35 Speaker 2
Taking, taking off the table the political response, are you as an individual concerned about the impact of a changing climate on people and on the economy and and are you interested as an investor in the private market solutions to resolve some of those things that are obviously going to become market driven problems?
00:55:56 Speaker 2
Take the government out of the equation.
00:55:59 Speaker 3
I I think there there may be a long term problem here, I’m not sure like how long it takes.
00:56:03 Speaker 3
I definitely think I I’m skeptical of this claim that, you know, the world is going to end in the next 10 years because frankly, we’ve been hearing that since the 1990s, I mean.
00:56:11 Speaker 2
Right, it’s 1988. There’s a great headline article, by the way, in New York Times where it was like scientists in 1988 said that all the oceans, all the ice caps will melt, the oceans will flood the land by the year 2000.
00:56:24 Speaker 2
So there is a credibility challenge associated with predicting.
00:56:27 Speaker 2
You know, kind of.
00:56:28 Speaker 2
Long term outcomes like this, that, that, that continue.
00:56:30 Speaker 2
We kind of cement unfortunately, right?
00:56:32 Speaker 3
Yeah, all my beachfront property would be underwater right now if all that came through.
00:56:36 Speaker 3
No, no, I’m just kidding, but no.
00:56:38 Speaker 3
But but look, it hasn’t escaped my attention that many of the political leaders who are claiming that we’re facing imminent threat of being underwater in 10 years own beachfront property.
00:56:50 Speaker 3
And fly on private jets so obviously.
00:56:54 Speaker 3
You know, I’m not saying this isn’t a long term problem, but I do think they try to create an imminent crisis so they can shove through a bunch of bad policies that are very destructive to the environment, not to improve the economy.
00:57:04 Speaker 2
Would you define what’s happening with temperature and extreme weather as a crisis or not?
00:57:13 Speaker 2
Yeah, I mean there there’s, there’s a, I would say there’s a critical impact.
00:57:16 Speaker 2
Act in and will continue to be a critical impact in the food supply chain in the quarters and years ahead because of what we’re seeing so severe drought and heat wave in China right now.
00:57:31 Speaker 2
And by the way, food is not the only one there.
00:57:33 Speaker 2
There’s also the the manufacturing supply chain, so in the province of Xichuan.
00:57:37 Speaker 2
In China, they actually lost power because so much of the power is driven by hydroelectric plants.
00:57:43 Speaker 2
So streams and water flow has slowed down and stopped as a result is less power.
00:57:48 Speaker 2
As a result, the factories are being shut down.
00:57:50 Speaker 2
As a result, key components for manufacturing in the computing industry and and in kind of mechanical goods are not being produced at the rate that they were being produced before.
00:58:02 Speaker 2
That has a ripple effect in the supply chain.
00:58:04 Speaker 2
Similar to what we saw in covert and then in the food supply chain, we’re seeing a drought and a heat wave right now.
00:58:10 Speaker 2
We’re coming out of it in the Midwest in the United States where we grow corn and soybeans.
00:58:14 Speaker 2
Throughout Europe, and also in China and in China, they had 70 days in a row of record setting temperatures 70 days in a row.
00:58:20 Speaker 1
Days in.
00:58:21 Speaker 2
Row every day was a record.
00:58:25 Speaker 2
No water, high temperatures.
00:58:27 Speaker 2
They’re just starting to assess the crop damage and looks pretty severe.
00:58:31 Speaker 2
There was massive crop damage in the Midwest in the corner, the Corn Belt this year.
00:58:36 Speaker 2
And then obviously, European farmers are having issues and combine that with the geopolitical issues of the Ukraine crisis and the natural gas pricing being so high one.
00:58:47 Speaker 2
Fertilizer of ammonia plants have been shut down in Europe and they think that ammonia and fertilizer production may drop by as much as 1/2 in Europe because of the crisis.
00:58:56 Speaker 2
So energy prices are so high you can’t make fertilizer so that energy is being also redirected into other industry and.
00:59:01 Speaker 2
Support homes so you.
00:59:02 Speaker 2
It’s a crisis. So I guess the question yeah, people are turning on their AC’s in California this week.
00:59:03 Speaker 3
So it’s there.
00:59:07 Speaker 2
You know, you see that Governor Newsom just said our grid in California cannot support excess electricity consumption.
00:59:14 Speaker 2
Therefore, one of the biggest variables is electric cars.
00:59:17 Speaker 2
He’s saying don’t plug in your electric cars this week, and that’s because of record high temperatures are about date California.
00:59:22 Speaker 2
In two days so look.
00:59:23 Speaker 2
Everyone says, hey, these are kind of.
00:59:26 Speaker 2
Anecdotal stories, but no, it’s it’s roughly statistically the frequency of extreme things happening is continuing to climb and then the impact is in the food supply chain, the energy supply chain and the manufacturing supply chain and there are follow on effects.
00:59:41 Speaker 2
Now I’m optimistic that private market solutions will resolve these issues and.
00:59:45 Speaker 2
I certainly, I certainly am not optimistic.
00:59:48 Speaker 2
Yeah, of course.
00:59:49 Speaker 2
I mean, look, we’ve had crises since the dawn of humanity.
00:59:52 Speaker 2
I mean, we were a starving.
00:59:54 Speaker 2
Probably we need a crisis to solve some of these problems.
00:59:55 Speaker 1
My business.
00:59:56 Speaker 2
These are pretty economically obvious.
00:59:59 Speaker 2
Yeah, and that’s that’s my point.
01:00:00 Speaker 2
The the private market will resolve because people want to have electricity, they want to have food they want to have, not want or need they need.
01:00:08 Speaker 1
Yeah, yeah.
01:00:08 Speaker 2
And so, so, so the the market will pay for those things, and therefore producers and technologists will resolve.
01:00:14 Speaker 2
The solutions to make that happen so.
01:00:15 Speaker 2
We just have to have the pain and suffering and see it first.
01:00:17 Speaker 2
And Rama the.
01:00:19 Speaker 2
Market to kick in all our friend in the group chat that shall not be named, posted this mean.
01:00:27 Speaker 2
You guys saw it, right?
01:00:28 Speaker 2
Which said like an autistic schoolgirl takes, what was it I have?
01:00:33 Speaker 2
It here so much.
01:00:34 Speaker 3
Is the Domino’s.
01:00:35 Speaker 2
The Domino’s you you can show the Domino’s, but basically it said an autistic Swedish girl decides to skip school.
01:00:42 Speaker 2
Is the little domino and seven Domino’s later this huge Domino’s? It says the collapse of Europe’s energy grid, and without commenting on the language used in the mean for a second, what is the point? The point is.
01:00:55 Speaker 2
These conversations can so quickly go off the rails and are not about national security and economics, and quickly become about moral virtue signalling that you miss the point.
01:01:06 Speaker 2
The point in the United States, just to be very blunt, is that the cost of electricity has gone up by 46% in the last decade.
01:01:16 Speaker 2
It will go up by another 40 odd percent through 2030, so between 2010 and 2030, the cost of electricity.
01:01:26 Speaker 2
For every single American will have effectively doubled, even though the ability to generate, particularly from wind and solar, have been reduced by 90%.
01:01:37 Speaker 2
Now, why is that? Well, it turns out that if you look inside the P&L’s of these utilities, it actually gives you the answer.
01:01:44 Speaker 2
So over the next 10 years we have to spend as a nation just just on upgrading power lines, $2 trillion.
01:01:56 Speaker 2
This is all cap.
01:01:57 Speaker 2
This is all like crazy crazy op ex right cap ex improvements for some cost investments.
01:02:02 Speaker 2
Our power line infrastructure in America is 20 plus years old.
01:02:07 Speaker 2
30 years old.
01:02:08 Speaker 2
Our generation infrastructure is pretty poor.
01:02:12 Speaker 2
We have all of these failures.
01:02:14 Speaker 2
We don’t have enough peakers.
01:02:15 Speaker 2
We don’t have ability to store energy when we need it.
01:02:18 Speaker 2
So if you add this all up, I do think that there’s a huge economic incentive to solve it and there are practical ways to solve it, and that’s what we have to stay focused on.
01:02:28 Speaker 2
Because if we allow the moral virtue signaling to get in the way, we’re going to make some really stupid decisions.
01:02:33 Speaker 2
We’re going about trying to turn off nuclear.
01:02:34 Speaker 2
Another thing that Elon said.
01:02:36 Speaker 2
You know, we’re we’re not going to green light shale and not gas.
01:02:40 Speaker 2
We don’t have time for this if you actually believe this is a cataclysmic issue.
01:02:46 Speaker 2
You need to basically be OK with hydrocarbons because it is the only credible bridge fuel. We have to keep the world working properly because otherwise what David said is right, we are going to economically destroy parts of the world by trying to race towards this net zero goal. By the way guys, I just want to take the the, you know, rip the Band-Aid off.
01:03:06 Speaker 2
Net 0 by 205026 it is not possible. There is 0 credible plans that the world has to do it.
01:03:13 Speaker 2
So we have to take small incremental steps and many of them, yeah, this is a, we should stay focused on that.
01:03:21 Speaker 2
The interesting thing and you cannot let people guilt trip you because this is when you make these stupid mistakes like the entire continent of Europe made, which is now going to cripple.
01:03:33 Speaker 2
You may be economies of that of that entire continent unnecessarily.
01:03:37 Speaker 2
Here’s the good news all these.
01:03:38 Speaker 2
Virtue signaling and people wanting to be green.
01:03:41 Speaker 2
And and for whatever reason, all of that now, economics and geopolitical’s forcing people to rethink nuclear Diablo Canyon nuclear power plant, which is the last one.
01:03:53 Speaker 2
In California, that’s operational.
01:03:54 Speaker 2
It’s being voted on today as we’re taping this, and it’s expected that they’re going to keep it all wrong.
01:03:59 Speaker 2
The governor with the great hair wants to keep it going.
01:04:02 Speaker 2
And the fascinating part about this is how.
01:04:04 Speaker 1
What should I?
01:04:04 Speaker 2
Choice does.
01:04:05 Speaker 2
He have.
01:04:06 Speaker 2
And so now the awareness is so high about power and us losing it and asking people to turn off their air conditioners.
01:04:13 Speaker 2
Turn out, don’t play in your cars.
01:04:14 Speaker 2
People people don’t understand how nuclear energy even works and.
01:04:18 Speaker 2
They’re like, get rid of it, right?
01:04:20 Speaker 2
They went to a new sponsor in 1978 and they haven’t changed their position since.
01:04:23 Speaker 2
But this is interesting, this guy, Gene Nelson, who’s been a champion of this stuff, he said.
01:04:28 Speaker 2
I thought our chances were zero of keeping this thing open and.
01:04:31 Speaker 2
He said WhatsApp?
01:04:33 Speaker 2
You know, and he said he told this conference of attendees his nuclear conference.
01:04:38 Speaker 2
That the effort to maintain it, he said.
01:04:40 Speaker 2
What’s happened since, you know, the last six months has been like a snowball.
01:04:45 Speaker 2
That everybody has changed their position just in.
01:04:47 Speaker 2
The last year.
01:04:49 Speaker 2
On shutting these things down and we saw obviously Germany is re you know thinking the three remaining of their six that they were going to turn off, they’re putting back on and I think we’re going to see new ground broken and.
01:05:00 Speaker 2
Han came out just in the last week and said they’re going to build more nuclear power and nuclear power plants.
01:05:06 Speaker 2
Now think about that.
01:05:07 Speaker 2
That’s awesome.
01:05:08 Speaker 2
That’s unbelievable.
01:05:09 Speaker 2
They had Fukushima.
01:05:10 Speaker 2
The German shut off their nuclear because of Fukushima.
01:05:13 Speaker 2
But guys, the Japanese are saying we’re building more good guys.
01:05:16 Speaker 2
Fukushima didn’t happen by accident.
01:05:18 Speaker 2
There was a like an incredible tsunami.
01:05:22 Speaker 2
Which was?
01:05:23 Speaker 2
Once in 100.
01:05:24 Speaker 2
Earthquake, you’re talking about these extremely long.
01:05:28 Speaker 2
Elephants, yes, the retaining walls could have been built better.
01:05:31 Speaker 2
But these are.
01:05:32 Speaker 2
Things we find, we iterate to solve.
01:05:35 Speaker 2
It was not the reason to shut down an entire mechanism of energy generation.
01:05:39 Speaker 2
Stupid mistakes where they put it just too low in the wrong place.
01:05:43 Speaker 2
If they just put the hill a couple of miles it would have been fine, but also if you look inside of what happened.
01:05:48 Speaker 2
There was enormous pressure inside of these companies to basically, you know, take, take actual direct blame and responsibility.
01:05:56 Speaker 2
I get all of that.
01:05:57 Speaker 2
But these organizations were shamed into turning these in.
01:06:01 Speaker 2
That is not the way to make good, smart decisions.
01:06:04 Speaker 2
OK, so Gorbachev, the last ruler of the USSR, passed away this week.
01:06:10 Speaker 2
Sacks robots.
01:06:12 Speaker 3
Yeah, I mean, I think this was a real milestone. You go back to the 1980s and Ronald Reagan the lead, spend his entire career being a cold warrior.
01:06:25 Speaker 3
Saw the opportunity to basically do business with with Gorbachev, Margaret Thatcher had told.
01:06:31 Speaker 3
So that this is a man we can do business with. Gorbachev had come to power in 1985.
01:06:35 Speaker 3
He had initiated reforms of the Soviet system.
01:06:38 Speaker 3
He was a communist, to be sure, but he introduced political reforms called Glasnost and economic reforms called Perestroika and Reagan seize the opportunity to go meet with him.
01:06:47 Speaker 3
And they signed arms control treaty after arms control treaty and ended.
01:06:52 Speaker 3
The threat of mutually assured destruction that the world had been living with since the beginning of the Cold War.
01:06:58 Speaker 3
You gotta remember that, you know, the Cold War began shortly after World War Two, and we had this doctrine of mutually assured destruction, or mad, and the whole world is living under the shadow of nuclear annihilation.
01:07:10 Speaker 3
This was showed repeatedly when I was a kid.
01:07:13 Speaker 3
There was a TV movie called.
01:07:15 Speaker 3
Come the day after, do you?
01:07:16 Speaker 2
Yes, the the day after it was scary as hell after.
01:07:18 Speaker 3
Remember the day.
01:07:18
I think it was.
01:07:19 Speaker 3
A really fair had the day.
01:07:19 Speaker 2
No, my Lord, they terrorized that that America, when we’re gonna die.
01:07:21 Speaker 1
Off and yeah, yeah.
01:07:23 Speaker 2
We had did you ever have nuclear bomb drills?
01:07:26 Speaker 2
You had to get under your desk.
01:07:27 Speaker 3
Yeah, I mean, so, yeah.
01:07:27 Speaker 2
We we have them.
01:07:29 Speaker 3
So if you’re like our age, you remember this, that, that.
01:07:32 Speaker 3
Movie by the.
01:07:33 Speaker 3
Way that that was a TV event movie.
01:07:35 Speaker 3
That was one of the most widely watched movies, but there were others.
01:07:38 Speaker 3
You know, Jim Cameron used this concept and the Terminator movies.
01:07:42 Speaker 3
You know, it was something that people were really afraid of and Reagan seized the opportunity, thought fundamentally.
01:07:48 Speaker 3
That nuclear deterrence was a moral that yet better to have deterrence than a nuclear war, but that he if he could, he sees the opportunity to negotiate the end of the Cold War.
01:08:00 Speaker 3
And by the way, there were hardliners in his administration who did not want him to negotiate with Gorbachev.
01:08:05 Speaker 3
But they ended.
01:08:05 Speaker 3
Doing a series of meetings.
01:08:08 Speaker 3
Uh Cole made in 1986 at the Reykjavik Summit and they signed deals to remove, you know, these, these INF system deals now and and that ended the Cold War. And then basically what happened is in 1989 the Berlin Wall came down.
01:08:23 Speaker 3
Gorbachev allowed the western the Warsaw Pact countries to leave, and then in 1991 the Soviet Union collapsed.
01:08:31 Speaker 3
So, you know, he gets a lot of credit for being willing to reform that system now.
01:08:36 Speaker 3
The sad thing is, if we were Fast forward 30 years later, where are we today?
01:08:40 Speaker 3
We’re back in a new Cold War with Russia.
01:08:44 Speaker 3
I mean that we’ve been spending a good part of this year talking about the threat of a nuclear use.
01:08:50 Speaker 3
And, you know, this was a problem that we thought was.
01:08:52 Speaker 3
Solved 30 years ago.
01:08:55 Speaker 3
And now we’re back with it today and you’ve got to ask, have the successors of, you know, Reagan and and and George Herbert Walker Bush, the people who inherited our foreign policy over the last 30 years, have they done as good a job as Reagan did Reagan?
01:09:14 Speaker 3
Ended the Cold War.
01:09:15 Speaker 3
We are back in a new Cold War.
01:09:18 Speaker 3
What is the reason for this?
01:09:20 Speaker 3
There’s been a a series of stupid policies that now have put the risk of nuclear war back on the table.
01:09:28 Speaker 2
My interest in Gorbachov is slightly different.
01:09:31 Speaker 2
He is an incredibly important character.
01:09:35 Speaker 2
Are the second-half of the 20th.
01:09:37 Speaker 2
Century undeniable.
01:09:38 Speaker 2
You know when the.
01:09:39 Speaker 2
Nobel Prize, as you said, David kind.
01:09:41 Speaker 2
Of ended the Cold War.
01:09:43 Speaker 2
But the most important thing in my opinion was the precursor to Pro Strika and why he did it.
01:09:50 Speaker 2
And as you said, like you know, this is a fairly art and communist, although he had really interesting views.
01:09:56 Speaker 2
Like he ran a very kind of like open kind of politburo where folks could debate and he, you know, promoted a lot of young people from within all of these interesting things.
01:10:06 Speaker 2
But the most important thing, and he’s written about this a lot, is the reason that he embarked on pro striker was because USSR at the time had an incredibly poor work ethic, terrible productivity and horrible quality goods.
01:10:21 Speaker 2
And I think that there’s something to be learned by that because at the tail end of Communism, essentially where you had central planning, central imposed economic princy.
01:10:33 Speaker 2
What happened?
01:10:34 Speaker 2
People did not feel that they had any ownership.
01:10:37 Speaker 2
In the outcome.
01:10:38 Speaker 2
No agency, no agency whatsoever.
01:10:41 Speaker 2
And I think that there’s a really important lesson to observe there, which is that if governments get to actively involved, this doesn’t just happen in Russia, it happens everywhere.
01:10:52 Speaker 2
It’s happening in California.
01:10:53 Speaker 2
We just talked.
01:10:53 Speaker 2
About it, it’s happening where we live right now and if you look at then, what happened afterwards.
01:10:59 Speaker 2
It became the.
01:11:00 Speaker 2
Aristocracy that basically ruled the USSR before.
01:11:05 Speaker 2
And then fighting against all these folks that wanted reforms and that created this schism which then perverted capitalism for, you know, seven or eight years through Yeltsin until Putin got there.
01:11:17 Speaker 2
And that’s what created the oligarch class and, you know, really exacerbated a bunch of wealth capture by a handful of folks that may or may not have deserved it.
01:11:25 Speaker 2
And I’m not going to judge that.
01:11:27 Speaker 2
But I just think it’s really important to understand that he was forced to embark on this because of all of these state central planning policies.
01:11:36 Speaker 2
And so it’s just an important lesson for Americans in democracy, which I don’t think.
01:11:41 Speaker 2
Governor, you might get more government.
01:11:41 Speaker 1
But many.
01:11:44 Speaker 2
You’re exactly.
01:11:45 Speaker 3
Right, the Soviet Union, their economy used to run on what they called 5 year plans.
01:11:49 Speaker 3
It was incredibly centralized. It was all run by the government. And, you know, this was Communism and the 20th century, the second-half especially, was a giant battle of systems.
01:12:00 Speaker 3
Not just of countries.
01:12:01 Speaker 3
It’s not just the Western bloc led by the US. The free world versus this year in the Warsaw Pact was also a battle of philosophies and systems.
01:12:10 Speaker 3
There was the philosophy of state control versus freedom and and a free economy and freedom one, you know, the free economy one in that battle.
01:12:20 Speaker 3
And the crazy thing?
01:12:21 Speaker 3
’cause 30 years later, we’re talking about socialism being a viable doctrine.
01:12:26 Speaker 3
You have politicians basically saying that they are socialists, but 30 years ago you would have.
01:12:32 Speaker 3
Been like that was unelectable.
01:12:33 Speaker 2
So there’s and.
01:12:34 Speaker 2
And the point is example after example, empirical evidence, well documented of just how it doesn’t work.
01:12:42 Speaker 2
And I guess The thing is, you know, we all say like you just have to learn it for yourself, you know, like you’ll tell your kids to do to not.
01:12:49 Speaker 2
Do something add.
01:12:50 Speaker 4
In fake items.
01:12:51 Speaker 2
So, yeah, they gotta touch distilled themselves and get burned.
01:12:54 Speaker 2
We’re about to go do that in California.
01:12:56 Speaker 2
Can you imagine if, like, people who want to be socialist here, bongers if it had to be in a food line or have rations?
01:13:03 Speaker 2
Literally Russia had food lines and they were.
01:13:05 Speaker 2
Rationing food in the 19.
01:13:07 Speaker 2
He’s like, well, you’ve been spending all got a large driver of Gorbachev basically negotiating these peace settlements with, you know, with Reagan and this nuclear, you know, demilitarization was in part because he knew he couldn’t fight, right.
01:13:22 Speaker 2
It was the realization that the client was he had no choice, right?
01:13:22 Speaker 3
So this was collapsing.
01:13:24 Speaker 3
That’s that’s that’s centralized system.
01:13:26 Speaker 3
With boxing, yeah, he’s.
01:13:28 Speaker 3
Cannot keep up.
01:13:28 Speaker 3
Reagan began their arms buildup and there was an arms race and they were losing.
01:13:33 Speaker 2
They were losing.
01:13:33 Speaker 3
They were losing.
01:13:34 Speaker 2
And again, this is, and This is why, like people should not misunderstand what Gorbachev was.
01:13:38 Speaker 2
He was not necessarily some democratic freedom fighter.
01:13:41 Speaker 2
He was person who was observing the underground conditions of the socialist system decay, their ability to compete.
01:13:48 Speaker 2
And so he had to capitulate before.
01:13:50 Speaker 2
It was forced upon him, meanwhile.
01:13:53 Speaker 3
Right.
01:13:53 Speaker 3
This is why I don’t think he deserves much credit as Ronald Reagan is.
01:13:56 Speaker 3
Because at the end of the day, Gorbachev would have kept communism going.
01:14:00 Speaker 3
If he could have.
01:14:01 Speaker 2
If he could have.
01:14:01 Speaker 3
If he could have but, but his.
01:14:01 Speaker 2
You know, he wanted the Soviet Union.
01:14:03 Speaker 2
To take stick.
01:14:04
Together, I mean.
01:14:04 Speaker 3
That’s right.
01:14:05 Speaker 3
But his but but I think to his credit when the things started to collapse.
01:14:09 Speaker 3
He didn’t use.
01:14:09 Speaker 2
He acted decisively.
01:14:10 Speaker 3
Violence and repression to try and hold it together.
01:14:13 Speaker 3
So, you know, he was a, he was a reformer, he was a liberal iser and and progress and disease, violence, but and ultimately he was a partner.
01:14:16 Speaker 2
Describe my test, maybe craghead this?
01:14:21 Speaker 3
For Ronald Reagan, remember Ronald Reagan began this gigantic arms buildup.
01:14:25 Speaker 3
He was denounced as a cowboy who would get.
01:14:27 Speaker 2
No, and sorry.
01:14:27 Speaker 3
Us in World War three.
01:14:28 Speaker 3
But when he had the chance to negotiate a.
01:14:30 Speaker 3
Deal with Gorbachev.
01:14:31 Speaker 3
He took it and they basically got on.
01:14:34 Speaker 2
And it was because Reagan was able to sit on top of an extremely productive capital assistant that allowed him to make those investments that made that capitulation basically effective, complete.
01:14:46 Speaker 2
And I think that that’s another thing for a lot of us to to understand, which is free market capitalism removing.
01:14:53 Speaker 2
These degrees of decision making give us degrees of freedom, and I’ve said this before in the last pod, the great thing about the IRA and what Chuck Schumer did is actually will be written in 10 or 15 years from now. Because when we get to energy independence, when every home is rising.
01:15:09 Speaker 2
When the national security calculus in America changes wholeheartedly overnight, I mean think about our relationships, right?
01:15:15 Speaker 3
We were energy independent two years ago.
01:15:18 Speaker 3
Biden canceled it.
01:15:20 Speaker 2
OK, well, listen, no.
01:15:22 Speaker 3
It’s true, if you’re willing to use natural gas and fracking, America is one of the richest energy countries in the world.
01:15:23 Speaker 1
Fair enough.
01:15:25 Speaker 2
Fair enough, but you’re right.
01:15:28 Speaker 2
Well, we produce a lot of oil too.
01:15:30 Speaker 2
I mean, listen it it will change everything if we can really go all in on all of the categories.
01:15:36 Speaker 2
It’s it’s just little minor guys that if you, if you, if you let the capital markets do and the free markets do what they’re meant to do, they will empower the government to do great things for all of you all.
01:15:48 Speaker 3
Citizens, I agree with 1%.
01:15:50 Speaker 2
And the reason?
01:15:50 Speaker 3
That’s the, that’s the system.
01:15:51 Speaker 2
We want to stop.
01:15:52 Speaker 2
It is because we have a couple of examples of, you know, extreme wealth.
01:15:55 Speaker 2
And I think that’s something we have to think about is like are the extreme is.
01:15:58 Speaker 2
The extreme wealth created for a certain class.
01:16:01 Speaker 2
Enough to stop the the prosperity train that we actually.
01:16:03 Speaker 2
Have in America.
01:16:04 Speaker 3
Listen, Jason, the cultures in California think they can run fast food business is better than the people who own those.
01:16:11 Speaker 3
Those restaurants. These.
01:16:11 Speaker 2
We have we have a great smoke.
01:16:15 Speaker 2
We have dictating is.
01:16:15 Speaker 2
Wouldn’t yeah.
01:16:18 Speaker 2
The great thing is we have a running AB test which will show whether this state central planning.
01:16:24 Speaker 2
Can work or not, and again, if we refuse to want to listen to the examples of Russia or all of these other countries that have tried this.
01:16:32 Speaker 2
Then so be it.
01:16:34 Speaker 2
We will know in the next three to five years that these policies actually don’t work, and actually that it actually accelerates the exact hellscape that they think they’re trying to avoid.
01:16:44 Speaker 3
But, you know, not only to my point about foreign policy.
01:16:46 Speaker 3
Not only are we forgetting the lessons of this Cold War, the economic lessons that a free enterprise system generates more wealth and prosperity and more national greatness, more ability to fund a defence budget, create a better economy, not only does it do all those.
01:17:03 Speaker 3
Things we forgot.
01:17:04 Speaker 3
Now we’ve forgotten that, but also.
01:17:07 Speaker 3
We have abrogated.
01:17:09 Speaker 3
We have ended every single defense control and arms control treaty with the Russians that Reagan and Gorbachev signed.
01:17:16 Speaker 3
Why? Why did we do that? Now our nuclear missiles are pointing each other again. And you know what? Russia is a much poorer country. the US were actually 15 times richer than them during the cold.
01:17:28 Speaker 3
Or at their peak we were only three times richer than them. There were 15 times richer, but they still got over 6000 nukes.
01:17:34 Speaker 3
Why did we get rid of all those arms control treaties?
01:17:37 Speaker 3
Why have?
01:17:37 Speaker 2
Well, what we’re dealing with and yeah, you know, we talked, we said it before. Like you, you’re dealing with a pragmatist and Putin’s KGB agent.
01:17:37 Speaker 3
We basically alienated them.
01:17:44 Speaker 3
Maybe, maybe, maybe you feel like Putin isn’t so we can deal with now, but he was someone we could have dealt with ten years ago.
01:17:45 Speaker 2
Is slightly different, yeah.
01:17:50 Speaker 2
We’ll see over time, I mean.
01:17:50 Speaker 3
20 years ago we missed the opportunity to.
01:17:52 Speaker 3
Deal with him.
01:17:53 Speaker 2
Jason, if he was a rational actor, as he was a rational actor, we would be able to give him.
01:17:54 Speaker 3
Dell on cycle.
01:17:57 Speaker 2
I think the only way.
01:17:58 Speaker 2
He’s actually going to be the only way we’ll be able to deal with him is if he doesn’t have the oil market he has.
01:18:05 Speaker 2
Like, he just has too much power.
01:18:06 Speaker 2
That oil and overtime that’s the solution.
01:18:09 Speaker 2
We have to be energy independent, you know and I think Europe is learning that lesson.
01:18:12 Speaker 2
Harder than we have.
01:18:12 Speaker 3
He was a communist.
01:18:14 Speaker 3
He was an heir to Stalin.
01:18:16 Speaker 3
And yet Reagans could still do business with him and sign an arms control treaty so that we can end the risk of mutually assured destruction.
01:18:24 Speaker 2
We should we take.
01:18:24 Speaker 3
You do not have to believe.
01:18:24 Speaker 2
Advantage there, yeah.
01:18:26 Speaker 3
You don’t have to believe that Putin is a good guy in order for us to avoid getting back into a Cold War.
01:18:32 Speaker 3
Which is the situation we find ourselves in now.
01:18:35 Speaker 3
How does it benefit us to have Russian nukes once again pointed at our heads?
01:18:41 Speaker 2
Yeah, I mean, we’ve raised.
01:18:41 Speaker 3
And the reason why?
01:18:43 Speaker 3
The reason why?
01:18:43 Speaker 3
We alienated him.
01:18:44 Speaker 3
Jason has nothing to do with him being a madman or whatever.
01:18:47 Speaker 3
It is because we brought NATO, which he views as a hostile military alliance, right up to his border.
01:18:53 Speaker 3
And and by the.
01:18:54 Speaker 3
Way listen to this video from Gorbachev. Gorbachev was asked about NATO expansion in front of the US Congress. He was giving a talk.
01:19:01 Speaker 3
To them, and they asked him, Gorbachev, what do you think about NATO and what do you say?
01:19:05 Speaker 3
He said that you cannot humiliate a country this way and expect there to be no consequences.
01:19:10 Speaker 3
Gorbachev was against data expansion.
01:19:12 Speaker 3
When when basically George Herbert Walker Bush and the Secretary of State James Baker went to Gorbachev to argue on behalf of German reunification, this is basically in 1990.
01:19:22 Speaker 3
Baker made the promise to Gorbachev not one inch eastward.
01:19:26 Speaker 3
Gorbachev said yes, OK, they can reunify, but we do not want NATO moving up to our border.
01:19:31 Speaker 3
Baker made that promise.
01:19:33 Speaker 3
We have brought NATO up to their border.
01:19:35 Speaker 3
That is why Putin regards us with hostility.
01:19:40 Speaker 2
Yeah, and I think worked for about 10 minutes past healthy. And they’re scared of him because he keeps invading country. So yeah, this takes you to tango. But hey, this has been episode 94.
01:19:49 Speaker 3
It does. It does take two to tango. But you have to ask, has the US foreign policy over the last 30 years that’s gotten us in a new Cold War with Russia?
01:19:57 Speaker 3
Has that been a successful part foreign policy?
01:19:59 Speaker 3
They have undermined all the good work that Ronald Reagan and Gorbachev did together to end the Cold War.
01:20:05 Speaker 3
We are back in a new Cold War.
01:20:07 Speaker 2
And we need to find Reagan’s we?
01:20:07 Speaker 3
Yes, put the whole subject printer has some blame. Putin has some blame. But things US State Department service, US State Department.
01:20:08 Speaker 2
Just need to find a new ring.
01:20:11 Speaker 2
Sodergren seed sprout.
01:20:14 Speaker 2
And Europe.
01:20:14 Speaker 2
And Europe.
01:20:15 Speaker 2
Europe has a big part of the bone chair here.
01:20:17 Speaker 2
He’s their neighbor.
01:20:18 Speaker 2
Yeah, so.
01:20:19 Speaker 2
The Sultan of Science, the Rain Man and Reagan, Library chairman, are you?
01:20:24 Speaker 2
The chairman of the Reagan.
01:20:26 Speaker 2
Let me ask you this.
01:20:26 Speaker 2
When you were a kid, did.
01:20:27 Speaker 2
You have a Reagan poster in.
01:20:28 Speaker 2
Your room.
01:20:29 Speaker 2
Have you ever under Reagan poster?
01:20:32 Speaker 3
Have I?
01:20:32 Speaker 2
Maybe at Stanford?
01:20:32 Speaker 3
I’m sure I’ve.
01:20:33 Speaker 3
I’m sorry, I’ve definitely owned a picture of of Reagan and look.
01:20:36 Speaker 1
Have you fun.
01:20:36 Speaker 3
At the Ronald Reagan listen, Jason.
01:20:39 Speaker 2
You hang around Reagan poster or a picture in your dorm at Stanford.
01:20:43 Speaker 2
Yes or no?
01:20:44 Speaker 3
Listen, Ronald Reagan, whole second.
01:20:45 Speaker 2
Nothing, yes.
01:20:47 Speaker 3
Ronald Reagan won the Cold War without firing a shot.
01:20:50 Speaker 3
He gave us the greatest economy.
01:20:51 Speaker 3
The US has.
01:20:52 Speaker 3
Ever had he.
01:20:53 Speaker 3
Ended the inflation and stagflation in the 1970s, and again he he avoided getting us into any of these major wars. Tell me the politician whom you Revere.
01:21:03 Speaker 2
Could have lunch with anybody in history.
01:21:04 Speaker 3
Who’s the politician who you Revere?
01:21:06 Speaker 3
Has a track record like that.
01:21:10 Speaker 2
Yeah, I mean, I, I guess one would say Bill Clinton, you know, would be the closest, you know, great president of our lifetimes, right.
01:21:16 Speaker 2
You would agree with that?
01:21:18 Speaker 3
He is a good, good president, not specially on the domestic that, but remember he benefited from the economy.
01:21:19 Speaker 2
Phoebe did #2 behind way again in our lifetimes.
01:21:23 Speaker 3
That Reagan created.
01:21:23 Speaker 2
Whatever reason you would agree with me, Clinton is right behind Reagan, Reagan and Clinton in since like 1950. Something easily top two. Yeah, where I’m easily easy. It’s hard for attacks.
01:21:35 Speaker 3
Reisenauer Eisenhower is very good.
01:21:37 Speaker 3
Listen, man.
01:21:38 Speaker 2
We’ve been heading shoulders, I think, like for practically what they dealt with at their point of time.
01:21:43 Speaker 2
All right.
01:21:44 Speaker 2
Listen, Sachs, I know you love Reagan.
01:21:47 Speaker 2
Second, you should be Reagan, Nixon, Reagan.
01:21:52 Speaker 2
And Bill Clinton?
01:21:52 Speaker 2
One on each side of you for next week.
01:21:54 Speaker 2
Will you do that for us, little guys?
01:21:56 Speaker 2
I gotta go to I love you.
01:21:57 Speaker 2
Taxi filled with peace.
01:21:58 Speaker 2
All next.
01:21:58 Speaker 2
Time. Bye bye.
01:21:59 Speaker 2
Love you too.
01:22:00 Speaker 2
Happy birthday.
01:22:01 Speaker 2
Thanks bud.
01:22:03 Speaker 3
Let your winners live.
01:22:06 Speaker 2
Rain Man.
01:22:07 Speaker 2
David sacks.
01:22:10 Speaker 3
And instead we open sourced it to the fans and they’ve just gone crazy.
01:22:14 Speaker 2
With bloody Wet queen of him.
01:22:26 Speaker 2
This is my dog.
01:22:27 Speaker 2
Take it out in your driveway.
01:22:34 Speaker 2
We could all just get a room.
01:22:35 Speaker 2
And just have this one big, huge Georgie ’cause.
01:22:37 Speaker 2
They’re also useful. It’s.
01:22:38 Speaker 2
Like this, like the sexual tension that they.
01:22:39 Speaker 4
Second, you’re about to be wet here, feet wet.
01:22:39 Speaker 2
Just need to release that out.
01:22:43 Speaker 4
Where did you get merges are back?
You did a great job brother.
00:00:06 Speaker 1
Or like the punch up to the formatting where you actually put the questions in.
00:00:10 Speaker 1
Yeah, I think it’s like ’cause I I want us to all agree.
00:00:12 Speaker 1
On this stuff we want to grok on you know, the professional TV show they would have pre interviews with everybody, get all their positions, then they put the positions into the.
00:00:21 Speaker 1
And they, you know, they basically do it.
00:00:22 Speaker 1
What’s called a pre interview or here’s another idea.
00:00:25 Speaker 1
You could do your job.
00:00:26 Speaker 1
Wow, I mean.
00:00:26 Speaker 2
Do you know about that?
00:00:29 Speaker 1
Or, you know, or how about I turned you 3 miserable into actual likable people in 91 episodes, which nobody thought was?
00:00:37 Speaker 1
I actually think I’m becoming less likable.
00:00:39 Speaker 1
The longer I’m on this.
00:00:44 Speaker 5
All of us.
00:00:45 Speaker 1
All of our like.
00:00:50 Speaker 3
Winners lied.
00:00:55 Speaker 4
2nd we open source.
00:00:58 Speaker 3
To the fans and they’ve just got second.
00:01:02
Queen of keenwah.
00:01:05 Speaker 1
Hello and welcome to the all in pod.
00:01:08 Speaker 1
I am your moderator for today out of the hot seat doing the easy beat Dave Friedberg.
00:01:14 Speaker 1
I’m joined today by our esteemed panel.
00:01:17 Speaker 1
Back from his European shopping spree, our National Treasure, America’s favorite dictator tomorrow, Polly Abatia tomorrow.
00:01:25 Speaker 6
How are you feeling?
00:01:27 Speaker 2
Logged, you’ll say.
00:01:28 Speaker 2
You’re recovered, yeah?
00:01:29 Speaker 6
Yeah, well, I’ve got, I got a.
00:01:30 Speaker 1
Little head cold though.
00:01:31 Speaker 1
Oh well, sorry to hear.
00:01:32 Speaker 1
That hope it’s not COVID taboo now.
00:01:35 Speaker 1
I tested on COVID negative, thank God. OK, also with us, as usual, from his emergency bunker ahead of the US Civil War. The Raymond David Sacks. How are you, David?
00:01:46 Speaker 1
Happy with the late start this morning, I’m sure.
00:01:48 Speaker 1
And of course everyone favorite Skibo.
00:01:51 Speaker 1
Producer of the Woodstock of tech conferences, that one and done all in summit Miami Jason Calacanis Jason what’s it like to?
00:01:58 Speaker 1
Be a guest E today.
00:01:59 Speaker 1
Oh, it’s so delightful.
00:02:01 Speaker 1
When you said you wanted to moderate that to me was chefs kiss.
00:02:04 Speaker 1
I get to, I get to comment and not be the moderator.
00:02:08 Speaker 1
I love it.
00:02:09 Speaker 1
So we’re mixing it.
00:02:09 Speaker 1
Up a little.
00:02:10 Speaker 1
Bit today I’m going to take the lead.
00:02:11 Speaker 1
J. Cole is going.
00:02:12 Speaker 1
To sit back, I’ll say a couple of words before we start because I think last week.
00:02:16 Speaker 1
We got a little nasty.
00:02:18 Speaker 1
How could anyone back him?
00:21:46 Speaker 1
Everything we talked about is how we would actually do a teardown of any other weed that was looking for money.
00:21:52 Speaker 1
David, you know we would look at what is the FFO ultimately, it’s like you know what’s implied cap rate and what’s the FFO.
00:21:58 Speaker 1
Can you get a?
00:21:58 Speaker 1
Paid for a.
00:21:59 Speaker 1
How much do you have to spend and can?
00:22:00 Speaker 1
You get paid and this is where.
00:22:02 Speaker 1
This is where I think like, you know, trying to.
00:22:04 Speaker 1
And you know, so if if if only if on the inside of it.
00:22:08 Speaker 1
What, what instead it was not that but it was pitched as some, you know, convoluted technology play.
00:22:14 Speaker 1
It’s a little bit harder to believe.
00:22:16 Speaker 1
Being an African you guys wanted?
00:25:48 Speaker 1
To cover this right.
00:25:50 Speaker 1
They are thumbs up, sure, I mean.
00:25:52 Speaker 2
Right.
00:25:54 Speaker 5
OK.
00:25:55 Speaker 4
Well, I mean.
00:25:55 Speaker 1
I think everybody is talking about why wouldn’t we were talking about it?
00:25:58 Speaker 1
OK, so during COVID during COVID, Marc Andreessen wrote uh.
00:26:02 Speaker 1
That’s a uh called build, and I’m going to read an excerpt, he says.
00:26:07 Speaker 1
You don’t just see this smug complacency, dissatisfaction with the status quo and the unwillingness to build in the pandemic or in health care generally.
00:26:15 Speaker 1
You see it throughout Western life, and specifically throughout American life.
00:26:19 Speaker 1
You see it in housing and the physical footprint of our cities.
00:26:22 Speaker 2
We can’t build.
00:26:23 Speaker 1
Nearly enough housing in our cities with surging economic potential, which results in crazily skyrocketing housing prices in places like San Francisco, making it nearly impossible for regular people to move in and take the jobs of the future.
00:26:35 Speaker 1
And then last week, Mark and his wife, Laura, submitted a letter to the town of Atherton to fight against multifamily housing, saying, I’m writing this letter to communicate our immense objection to the creation of multifamily overlay zones in African please immediately removes all multifamily overlay zoning projects for the housing element.
00:26:55 Speaker 1
Which will be submitted to the state in July.
00:26:57 Speaker 1
They will massively decrease our home values, the quality of life, ourselves and our neighbors, and immensely increase the noise pollution in traffic.
00:27:08 Speaker 1
I’m just gonna hand the mic.
00:27:09 Speaker 3
Over well, I mean.
00:27:11 Speaker 3
I’m happy to defend the residents of Atherton on this.
00:27:15 Speaker 3
I’m going to take the contrarian standpoint, but does anyone?
00:27:17 Speaker 2
So I I was going to do the same I thought you.
00:27:19 Speaker 2
Guys were gonna patch it so.
00:27:21 Speaker 3
Well, look, I mean do.
00:27:22 Speaker 3
We have a a problem where housing is too hard to construct in.
00:27:26 Speaker 3
The state of California.
00:27:28 Speaker 3
Yes, and there’s a bunch of reasons for that.
00:27:29 Speaker 3
The permitting process is Byzantine.
00:27:31 Speaker 3
It takes years.
00:27:32 Speaker 3
All those delays cost money.
00:27:34 Speaker 3
The tenant rights movement has gone so far that landlords.
00:27:38 Speaker 3
Can’t you know, it’s almost impossible to evict anybody, and that makes it so no one wants to be a landlord, so no one wants to build these multifamily buildings or buy them.
00:27:50 Speaker 3
And then, you know, you’ve got like all these taxes, so you’re just in Calvin. In San Francisco, for example, they just passed the 6% transfer tax.
00:27:58 Speaker 3
Where if we talked on the show and they basically just took 6% of my home and there’s like nothing you can do about it.
00:28:04 Speaker 3
So there’s a lot of reasons why people don’t want to invest in more housing in California, and I think that.
00:28:11 Speaker 3
This average example is sort of cherry picked because what this?
00:28:14 Speaker 3
Is really zoning, you know?
00:28:16 Speaker 3
There are these suburbs, and it’s not just Atherton.
00:28:19 Speaker 3
I mean you got the East Bay as well where people live in these areas that are zoned for single family residences as opposed to multi family and that determines the character of the neighborhood now if you go buy a house.
00:28:31 Speaker 3
In one of those neighborhoods with that zoning, then that’s what you expect to be the case.
00:28:36 Speaker 3
I mean you have to spend more money buying house in that neighborhood because you are investing in the character of that neighborhood.
00:28:44 Speaker 3
It is unfair to the residents of that neighborhood for a developer to come along and say, hey, I’m going to change the character of this place so I can make money.
00:28:51 Speaker 3
I’m going to take a bunch of single family lots, turn them into multi family apartment complexes or something like that so I can understand why the residents would be against that.
00:29:01 Speaker 3
So I would differentiate between legitimate.
00:29:04 Speaker 3
Reasons for zoning and.
00:29:05 Speaker 3
Then things that the state or cities have done.
00:29:09 Speaker 3
To undermine the market for housing, basically creating frictions or impediments in the market for
00:33:27 Speaker 1
State Commission and I think that State Commission can issue some sort of penalty or something.
00:33:31 Speaker 4
Yeah, that’s right.
00:33:31 Speaker 1
So, you know, it’s it’s, I think the residents will pay for that freedom if you will, to to not have that building happen.
00:33:40 Speaker 1
But again, I just go back to.
00:33:41 Speaker 1
It doesn’t solve the crux of the problem.
00:33:45 Speaker 1
The crux of the problem is we need to solve.
00:33:47 Speaker 1
This housing crisis in the order of magnitude of millions of homes.
00:33:52 Speaker 1
OK.
00:33:53 Speaker 1
And so millions of homes can only be absorbed mostly in cities?
00:33:59 Speaker 1
So the real conversation, and you know, is I have more sympathy for the residents of Atherton than I do for residents of the city of San.
00:34:07 Speaker 1
Francisco, OK, because there is dense housing in San Francisco.
00:34:12 Speaker 1
There already is an infrastructure, social services that were designed and built.
00:34:17 Speaker 1
There are sidewalks again.
00:34:19 Speaker 1
Simple example.
00:34:20 Speaker 1
There are stoplights.
00:34:22 Speaker 1
You know in San Francisco that a lot of these towns don’t actually have now.
00:34:26 Speaker 1
Again, that was a decision they made.
00:34:27 Speaker 1
50 years ago.
00:34:28 Speaker 1
And they would have to change that decision.
00:34:30 Speaker 1
They they get to state their feelings.
00:36:42 Speaker 1
I think what we need to do is convince people.
00:36:44 Speaker 1
And I think there’s two really good art.
00:36:45 Speaker 1
Let’s hear number one.
Down to earth.
00:44:21 Speaker 1
This is the dirtiest little secret in just doing these.
00:44:23 Speaker 1
Democratic states.
00:44:25 Speaker 1
Again, mostly democratic, but if you look inside of California and a couple of other states, how horrendous, Lee gerrymandered.
00:44:33 Speaker 1
It is so that you can basically redistrict in a way to cordon off tax dollars to only then send to one or two public schools and sit inside of your area your ZIP code, because that’s what the law says.
00:44:45 Speaker 1
It’s a ZIP code oriented scheme, is well versus created.
00:44:49 Speaker 1
Incredibly horrible incentives for people.
00:44:52 Speaker 1
So magic David is right, which is that there’s a there’s a contortion.
00:44:55 Speaker 1
Of laws that come together that underlies some of these decisions have been manifesting a petition like this and et cetera.
00:45:02 Speaker 1
They all need to get cleaned up.
00:45:04 Speaker 1
And Jamath it’s even worse than that because the same people who have rigged it so that all their tax dollars stay in their non development community, then they’re over funding their public schools.
00:45:15 Speaker 1
They could have easily or private, but they’re using all that money for just their private school and the one in the town next to it.
00:45:20 Speaker 1
Needs power off.
00:45:21 Speaker 1
Or whatever.
00:45:22 Speaker 1
They have no money and then.
00:45:24 Speaker 1
These people have the audacity to fight against school choice so that those poor people can take tax dollars and.
00:45:30 Speaker 1
Then pick up a bet.
00:45:31 Speaker 1
So it’s hypocrisy all the way up and down.
00:45:34 Speaker 1
And you know, I think This is why people are largely moving to different places around the country and it’s a competition.
00:45:39 Speaker 1
Between States and cities.
00:45:40 Speaker 1
OK, we’re going to go from super local to global.
00:45:43 Speaker 1
You know, this is a topic I wanted to talk about today.
00:45:47 Speaker 1
’cause I, I want to bring together a couple of of breads.
00:45:51 Speaker 1
And get your guides his take on, you know, all of these things kind of coming together and what it means for foreign policy and how things might play out on the global stage in the next, you know, call it years to decades jinpei it’s been reported this week.
00:46:08 Speaker 1
Is taking a trip to Saudi Arabia.
00:46:12 Speaker 1
You know, this is just a few weeks after Joe Biden made his trip to Saudi Arabia.
00:46:16 Speaker 1
I’ll read a just an excerpt.
00:46:18 Speaker 1
He’s going to end his more than two years of self-imposed in person diplomatic isolation and his first trip is going to be to Saudi Arabia.
00:46:27 Speaker 1
Yeah, you know, this is from unnamed Saudi sources, so it’s unclear.
00:46:30 Speaker 1
This isn’t an official statement, this is just reporting.
00:46:34 Speaker 1
You know, the Wall Street Journal reported in March that after six years of negotiations, China and Saudi Arabia are getting close for China to start paying, paying yuan for oil that they would be buying from the Saudis.
00:46:50 Speaker 1
So there’s an important kind of economic tie up that may be emerging that.
00:46:54 Speaker 1
That could affect the US dollar and the importance of the US dollar on the global economic stage.
00:47:00 Speaker 1
And meanwhile this week as well, it’s been reported that China is doing military exercises with Russia inside Russia.
00:47:08 Speaker 1
So there is an extension of China and their influence and their economic tie ups and their military activity with both China, I’m sorry, with both Russia and Saudi, I also want to highlight.
00:47:20 Speaker 1
Another important point that came out this week.
00:47:22 Speaker 1
Saudi Aramco reported their earnings, the largest earnings ever for a company.
00:47:28 Speaker 1
$48 billion of net profit in 1/4. That is more profit than Microsoft, Apple, Facebook, and Tesla combined in a single quote.
00:47:37 Speaker 1
00:51:56 Speaker 3
These are nations with serious conflicts or differences of interest, and we’ve made it really easy for China to to turn Russia into the junior partner in that relationship.
00:52:07 Speaker 1
Timoth do you think US foreign policy needs to change and that we’re setting up this, you know, axis of conflict, this this access of allies that that we don’t want to have the allies and.
00:52:19 Speaker 1
You know, would you kind of.
00:52:22 Speaker 1
And also you know, do you get concerned about this?
00:52:25 Speaker 1
Oil Umm trade where there may be some.
00:52:29 Speaker 1
01:05:22 Speaker 1
Those are not going to be credible businesses like we thought they were going to be.
01:05:26 Speaker 1
Instead, the raw tonnage of dollars would do what America was able to do for solar and PV over 2000 to 2022, which is just crushed the cost per Watt into the pennies so that it can be equivalent to Hydro Poland nuclear and put everything on a level playing field and then allow the market to figure.
01:05:47 Speaker 1
Yeah, I mean, there’s a.
01:05:48 Speaker 1
Lot of other.
01:05:49 Speaker 1
Stuff in this bill I I want to highlight.
01:05:52 Speaker 1
For you guys.
01:05:53 Speaker 1
I don’t know if any of you looked at the CBO, CBO, the Congressional Budget Office.
01:05:57 Speaker 1
Any time the bill is being voted on, they do an accounting analysis on how much spending and how much revenue there will be as a result of this bill for a 10 year.
01:06:06 Speaker 1
Yeah, I.
01:06:07 Speaker 1
Period. Yeah. And so, yeah, if you look at every year for the next 10 years, the CBO score for this bill is that we’re going to spend an incremental, we’re going to increase the deficit by $330 billion for the next five years.
01:06:20 Speaker 1
And then we’re going.
01:06:21 Speaker 1
To decrease the deficit by 320 billion in the five years.
01:06:24 Speaker 1
After that.
Like there is no way this thing is netting out to 0.
01:08:44 Speaker 1
Like, this thing sort of costs us a fortune.
01:08:46 Speaker 1
Government is in shambles, we don’t know what we’re doing.
01:08:49 Speaker 1
I thought that the links you sent for the podcast with the pros and cons of the carbon tax is really interesting because it is so complicated.
01:08:58 Speaker 1
When I heard these tax experts explaining.
01:09:00 Speaker 1
How you would implement a carbon tax and the import and export and then how often would have to be tweaked?
01:09:05 Speaker 1
And then who decides what your corporate footprint of your watches and and where did the minerals come from to make the watch?
01:09:11 Speaker 1
And who gets paid on carbon? It just seemed to me there’s a fool’s errand. Would be much better to just what if your?
01:09:17 Speaker 1
Watch is made from Diamond and not carbon.
01:09:20 Speaker 1
Well in that case you should just pay $1,000,000 because you are never lead us coastal elite. We should just start with yachts and watches. But my what I realized was.
01:09:25 Speaker 6
Yeah, yeah.
01:09:32 Speaker 1
What we really need to focus on and.
01:09:33 Speaker 1
You tell me if what you.
01:09:34 Speaker 1
Then come for bug.
01:09:37 Speaker 1
Instead of doing this carbon tax, which seems incredibly elegant but we all know is impossible to get consensus across hundreds of governments and locales to to negotiate this.
01:09:46 Speaker 1
It will never happen, at least not effectively and in real time.
01:09:50 Speaker 1
Wouldn’t it be a much better technique to do what we do in venture, which is here are the biggest problems in the world.
01:09:56 Speaker 1
Here are the which in this case.
01:09:57 Speaker 1
Could be the biggest emitters here are the best solutions.
01:10:00 Speaker 1
Here are the teams working on the best solutions.
01:10:01 Speaker 1
Let’s give the teams working on the bus solutions money.
01:10:04 Speaker 1
Tell to work down that list and if it happens to be, you know, ships coming from China, you know with a bunch of containers on and contain.
01:10:12 Speaker 1
We we measure that and you know the the thing I’ve learned after the first six months of investing in carbon ’cause we have a syndicate.
01:10:18 Speaker 6
Now that mollywood.
01:10:19 Speaker 1
Was working with me on this private syndicate.
01:10:22 Speaker 1
We couldn’t find a lot of great investments.
01:10:26 Speaker 1
You know that made sense that weren’t, you know, asset heavy.
01:10:29 Speaker 1
01:19:09 Speaker 3
Which was what Biden said. You know, he wouldn’t increase taxes. Anyone below 400,000. That amendment was rejected on straight party lines. So this idea, yes, is called the Crapo amendment.
01:19:17 Speaker 6
Oh, really? Right.
01:19:20 Speaker 3
5050.
01:19:21 Speaker 3
And Vice President here is set to come in and make the tie breaking vote.
01:19:25 Speaker 3
So obviously they know that there’s going to be a lot of net new audits on people making less than four that yes, exactly.
01:19:30 Speaker 2
Small business owners.
01:19:33 Speaker 3
So the next time.
01:19:33 Speaker 1
So I mean, my my understanding of this is it’s like small business owners, people who run a small business and a service business and are they really accounting for their books correctly?
01:19:41 Speaker 1
Are they really expensing the right things?
01:19:44 Speaker 1
Are they accounting for revenue?
01:19:44 Speaker 3
All or they’re going to get rimmed.
01:19:46 Speaker 2
And that’s that’s, uh, that’s that’s where.
01:19:47 Speaker 3
Yeah, they’re gonna get Grammy by this.
01:19:49 Speaker 3
Because look, let’s face it, billionaires already getting audited.
01:19:52 Speaker 3
You know, you run out of tweets saying, listen, I get audited as a matter of.
01:19:55 Speaker 3
Course every year.
01:19:56 Speaker 3
You know, these people already have, so yeah.
01:19:58 Speaker 1
Dude, I use a big four accounting firm.
01:20:01
Yeah, I.
01:20:02 Speaker 5
Mean this is, I mean the amount.
01:20:04 Speaker 1
I I have a partner, I have a partner of like Anderson that is literally like, you know, covers me like it covers a Fortune 500 trucking company, not is.
01:20:12 Speaker 1
Not being ridiculous put.
01:20:13 Speaker 6
Him in your at your your put him in your nanny unit.
01:20:14 Speaker 1
I mean it’s, it’s it’s it’s 10s of.
01:20:16 Speaker 1
People, I mean by the way sax, sax is.
01:20:18 Speaker 1
Right, like if if you look at them.
01:20:21 Speaker 1
You know the ultra well.
01:20:23 Speaker 1
I I think it would be, I would be shocked if any of those folks were actually evading taxes at all, because it’s impossible the way that this infrastructure runs.
01:20:32 Speaker 1
Like, you know, you’re getting key.
01:20:34 Speaker 1
Ones from Blackstone.
01:20:35 Speaker 1
What are you going to do?
01:20:35 Speaker 2
Oh boy, oh boy.
01:20:36 Speaker 1
So you’re gonna change that?
01:20:37 Speaker 1
Like, you know, like, do you guys even know the pin number of your bank card?
01:20:41 Speaker 1
I have no idea.
01:20:42 Speaker 1
So, like, complicated.
01:20:44 Speaker 1
OK.
01:20:44 Speaker 1
So, so my point is I don’t think that if there is, if there is cheating of taxes, it’s happening at that level.
01:20:51 Speaker 1
What’s happening at that level are much more structural issues, like carried interest, which they decided not to touch.
01:20:57 Speaker 1
Ordena state.
01:20:58 Speaker 1
Trust and dismissal of those are those? No, I don’t think that this is my point. It’s not mistakes. There’s nobody with a pencil ruled filling out a K1 for Bill Gates, dummy. That’s my point.
01:21:09 Speaker 1
No, I know, but people can make mistakes. What if a K1 gets left off? That’s what I’m saying is when they find something, it’s usually easily.
01:21:13 Speaker 5
What are you?
01:21:13 Speaker 5
What are you?
01:21:15 Speaker 1
Factoring help, it doesn’t nothing.
01:21:17 Speaker 3
Jason, when I get my tax return, it’s it’s done by an accounting firm and I just signed.
01:21:17 Speaker 2
I’ve had.
01:21:17 Speaker 1
It listed.
01:21:18
Never happened.
01:21:22 Speaker 3
It I don’t, I don’t put anything together.
01:21:22 Speaker 1
Well, I know that what I’m talking about is what are the IRS people going?
01:21:25 Speaker 1
Find is, you know, I think, well, what are they going to find is not they’re going to find a lot of middle class and upper middle class folks and they’re going to have to focus on them because individually it may not represent a lot, but when you multiply it by the number of people inside the United States and this is.
01:21:44 Speaker 1
What the Wall Street Journal and a bunch of other folks have been saying now when you apply 87,000 people and tasked them incrementally with doing a job.
01:21:53 Speaker 1
It’s not going to touch these folks that are already audited.
01:21:56 Speaker 1
It’s going to touch the folks that are not audited.
01:21:58 Speaker 1
And by and large, a much, much larger majority of middle income and upper middle income people are not audited.
01:22:06 Speaker 1
Which is why I think you could spend a lot less than $80 billion and just build software that guarantees
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