All-In with Chamath, Jason, Sacks & Friedberg - E74: Market update, inverted yield curve, immigration, new SPAC rules, $FB smears TikTok and more

Starting point is 00:00:00 I mean Jason and Saks look like fucking two accounts who've just been fired from Lehman brothers in 2008. Absolutely. Absolutely. We're carrying our boxes out to the street and getting a taxi. Saks does look appropriate for his setting. How long you in DC for? Saks a pill in and out one day. What are you doing? Yeah, I'm fine. I'm tonight for the fundraiser tomorrow morning. Well, who's the fundraiser? We want to tell everybody? Big boy. Yeah, it's a name for the whole joke. I'm hosting a fundraiser for a Democrat. Blue State, he's trolling everybody with his blue state. Put your red tie on.

Starting point is 00:00:29 Put your red tie on. You ever red tie with your sex? I wore a blue tie today. Really? Oh, you're trolling? A full troll is on. Wow. What a little troll artist. All right, let's get started.

Starting point is 00:00:40 Let's go. You're like your winner's ride. Rainman David Sack. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started.

Starting point is 00:00:50 Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. Let's get started. All right, everybody.

Starting point is 00:00:58 Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of the All in Podcasts. Welcome to another episode of vacation. You were certainly missed even though the episode was record setting. The queen of Kenwa himself, he'll reboot your physique with his Munich puts the Manna and the Kanna and he's

Starting point is 00:01:15 your pal from North Cal, the Sultan of science. David Friedberg, how you doing, brother? You're the hell sequence of these things. This is great. You do actually do work for this podcast. You can keep this going every week, it'll be amazing. I mean, I just felt like getting a plug in for Munich and Con. That was my, if I could get two for a follow-up.

Starting point is 00:01:32 Okay, go ahead. It hits, it. He's a sucker for Tucker, the rain mail himself. David Sacks. That's so good. All right. Next up, the dictator, agitator and our frequent collaborator. He's back to back with the SPACs, a trend setter with the sweaters. The future he can foresee a Tremoth polyhapatia. We got you everybody. It's not as good as David's, I got to say. Well, there's a lot to go with Asperger's Tucker. I mean, he's the material for SACS.

Starting point is 00:02:14 I could have done 20 minutes. 20 minutes. I could have done 20 minutes on SACS. SACS you are, of course, in DC with some star chamber, then you ban in T.L. Who's, what is what star chamber bullshit? Are you doing in No, I spoke at a foreign policy conference today called the name of it. It's called up from chaos and sponsored by a group called the American moment and the American conservative

Starting point is 00:02:39 We think about Well, it's called up from chaos because our foreign policy has been chaos for the last 30 years. The United States has been in seven wars. How many trillions have we spent on nation building? We've lost all of those wars, named one war we've won. Look at all the lives that have been lost, thousands and thousands of our soldiers. And then millions of innocent people all over the world. I've said it before, this is what happens when the United States goes around the world Stampeding like a raging elephant. We need a more restrained foreign policy. So that's what I've been articulating I don't know what about that makes it either conservative or liberal, but

Starting point is 00:03:16 You know what we need is more restrained. It's too logical, right? Yeah, you know, it's it's pretty much everyone in this town I mean, there's pretty much everyone in this town. I mean, there's no lobby for decreasing our involvement, right? Because, I mean, the military industrial complex has gotten so big and so powerful. I mean, Trum did not want to start worse. It was a key piece of his platform. And it did seem up until, and we'll get into this obviously, up until the gath from Biden 12 hours after I said you weren't giving him the benefit of the doubt.

Starting point is 00:03:50 It threw me right into the mud. Biden just declared a new world order. I mean, he has bought and sold this. Reaching change with Putin. Yeah, and he said regime change. I mean, he's bought into this liberal interventionism. Obama was much better. I mean, Obama had all the right instincts. He de-escalated things in Ukraine.

Starting point is 00:04:06 We could have had the situation back in 2014, Obama pulled the plug, and he de-escalated in Syria over the objections of his staff. I mean, the problem is, if you, the Obama basically got played by the staff and the establishment. Because Obama was there for eight years, and he knew that it was all about doing the right thing and also about the legacy and the judgment

Starting point is 00:04:29 that would look back on his decisions, whereas everybody else is like, well, I'm here for this four-year grift and I'll be back for another four years later. So the more chaos, the better for a lot of those people. He couldn't get us out of Afghanistan. Why couldn't he get us out of Afghanistan? Sac, because he wanted to, right? He got played by the general. So Ben Rhodes wrote a book Ben

Starting point is 00:04:48 Rhodes was sort of one of Obama's right hand guys and he coined a term that stuck for called the blob, which is the term for this sort of Washington foreign policy establishment. All the people in the state department and the think tanks and the sort of the the journalists who love being the drums of war. I mean, that whole establishment that is as addicted to war. And you know, if you read that Atlantic magazine interview called the Obama doctrine where Obama is interviewed, he lays it out. He says, look, there is a foreign policy playbook that presidents are expected to follow.

Starting point is 00:05:27 In response to any provocation, any incident, you're supposed to react in a highly multi-rise way. And if you don't, you get attacked. And the generals, he wanted to get out of Afghanistan, but the generals started leaking against him that it'd be a fiasco. And then, unfortunately, Obama didn't stick to his guns. He didn't want to take those political hits. It was unfortunate. He really showed it.

Starting point is 00:05:47 We'll get into Ukraine at the end of the show. But let's talk a little bit about markets up top here. The US yield curve inversion is upon us. Maybe you could give us a CP a little primer on what this means, the inverted yield curve and why people are talking about it this week. Well, I think people, yeah, people are talking about it this week? Well, I think people were talking about it. The reason they were is that they believe that it predicts a recession.

Starting point is 00:06:14 And specifically what they look at is the interest rate on a two-year bond and an interest rate on a 10-year bond and you subtract one from the other. And when it inverts, what effectively, what it means is that, you know, typically in a healthy economy, you want rising interest rates over a long period of time. And the reason you would want that is that you are guessing that the economy will be healthy. There'll be a nominal amount of inflation, so things will tend to increase in price. And as a result of that, you need to get paid more for the future than today. So if you want me to take 10-year risk, you need to pay me a little bit more than if you want me to take two-year risk. And so things should go up into the right. But when all of that stuff

Starting point is 00:07:01 10 years out, all of a sudden, is trading for a lower yield than today. What people think will happen is that governments will cut interest rates massively. They tend to do that in order to stimulate the economy, right, to get money back into the system, and they tend to do that because of a recession. So people look at the difference between the two-year bond and the ten-year bond and they try to guess what's going to happen. Here's the problem with all of this.

Starting point is 00:07:28 It turns out that it's not as correlated as one thinks. And Nick, I posted this link so you can just put it up there. But a bunch of economists at the Fed actually went and you have access to this data, they back-tested this. And what they found was that there was actually a more predictive signal of recessions, which is the difference between the three-month T-bill and the 18-month T-bill. And if you look at the three's 18 spread, they call that the forward spread at the fed. That's actually not showing a recession at all. In fact, that shows a very healthy ascent,

Starting point is 00:08:03 largely taking into account the fact that the fed has told us that they're going to rip in a bunch of rate increases over the next year to 18 months. So what are we to do with all of this? Well, when there's been a recession, it has typically been true that both the two's tens and the forward spread have collapsed to zero, or gone negative. That's this inversion. It has never really been the case that 2s-10s inverts while the forward spread stays up and you have a recession. In the past, we've mentioned that when oil has these kinds of price spikes, it typically forecasts a recession. So if you put all of this data together, it's a really murky picture. So what are you supposed to do? It's not totally clear to me, but I think

Starting point is 00:08:53 that the general way that I think the market is reacting to this is probably inappropriate and I'll tell you why. And the setup, by the way, because of this inappropriateness is actually quite interesting. So why is the reaction inappropriate? Look, if you think about where we were in November and where we are today, almost April 1st, right? So it's been four months, five months. We've had massive exposition of inflation. We've had massive disruptions to the supply chain. inflation. We've had massive disruptions to the supply chain. We've had the beginning of a war whose end is somewhat indeterminate today. That's causing a bunch of spikes in a bunch of really critical commodities the entire world needs. We've had a Federal Reserve that went from hiking 50 or 75 basis points to hiking 200 to 250 basis points by the estimated average. And so all of these things

Starting point is 00:09:48 have happened, yet the market is basically at an all time high, plus or minus to 5%. That really doesn't hang together at some really basic logical level, right? So what's going to happen? Well, Brad said this last week, what has actually happened under the hood is a dispersion, which means the crappy companies have gotten crushed, and the good companies have gotten whacked but not crushed. And then when they rally, they rally disproportionately in favor of the good companies. So what are we doing right now? I think we are going to see this diversion of companies and we're about to go through earning season, right? We're at the end of Q1. And I think what's gonna happen is really interesting.

Starting point is 00:10:29 You're gonna have a handful of companies who have a great handle on their business, who actually project strength. I know what I'm doing. I know how I'm going to perform. The levers are in my control. I'm going to invest for the future. I'm gonna go and consolidate a market. Those companies will get rewarded. And then anybody else who has a whiff of

Starting point is 00:10:50 indecision or whose structural business is flawed, and then they use all of these other issues as a reason to explain their flawed business will get completely whacked. Two examples over this last week, and we had this debate, you know, people were talking about restoration hardware and the CEO basically saying the sky is falling and there's a huge recession. And you know, my comment is, well, if you take the other side of the coin, restoration hardware sells overpriced crappy furniture into a housing market that's basically shut down because refirates are at 5%. There's the other explanation for why his business is crappy. It doesn't necessarily have to be a recession.

Starting point is 00:11:28 Well, and just to clearly define it, a recession is two quarters or more of negative growth, the economy contracting. And we've had about a dozen of these since World War II. We remember a couple of them in our lifetimes. Obviously, the COVID situation created a recession for a couple of quarters. And then we had the Great Recession, which lasted, I think that was almost, it was over a year, right? That was six quarters, I think, five quarters. So these happen every 10 years or so. So if we do have a recession, and it seems implausible to me that we would have negative growth for two quarters.

Starting point is 00:12:09 Well, the other interesting company, for example, was Uipath, which Uipath got whacked today 25 or 26%. And what they actually reported was that they thought that they were going to increase ARR to 1.2 billion from like 900. That's a huge, at that scale, to grow 35, 40% in ARR in a year is really quite incredible. But their ACV numbers and their revenue numbers were a little soft. They got whacked. And now they're trading like 11 times ARR.

Starting point is 00:12:41 So you have some of these companies that are going to blame macro headwinds, but they may actually just have a flawed business model. You'll have these other companies who actually overperformed, but may have been a little bit too highly valued, who will get valuation reset on any faint weakness. And so it's going to be really up to these CEOs and these boards when they write their earnings releases to be very precise. Those that have a handle on their business, I think, are going to get really rewarded. And those that don't need to blame the macro market and just get all the bad news out now because this is the quarter, it doesn't get any better from here. SACS, best ways to fight a recession, cut spending, I'm sorry, increased government spending, cut taxes.

Starting point is 00:13:29 Where are we at in terms of how many bullets we have left to do these kind of things? We don't really have a ability to spend more money. And I guess lowering interest rates is the other way to stimulate it. Do we even know we're going into a recession? So do you think we're going into a recession? And if we are, is there a way to reverse it through the normal tactics? We're definitely going into a slowdown, and whether it becomes a recession to be determined, I think there's a very good chance

Starting point is 00:13:54 because we already were headed for a slowdown because of interest rate increases, because of inflation. And now on top of it, we've got all the supply chain disruptions from this war. And we know that I'm plugging the 144 million Russians in the Russian economy. We've basically unplugged that from the global economy. So that's going to hit our economy. If there's a little bit of delayed reaction there.

Starting point is 00:14:18 So these are all negative indicators. And I think we're either going to have a recession or something very close to it. And they typically last 11 months, right, SACs? So how long would the recession be? You think it's typically 11 months, two quarters, six quarters? Yeah, normally it's like 18 months so you get back to where you're supposed to be or something like that. But you're right, we have very limited tools to fight this because we've already spent, I mean, we've already broken the glass in case of emergency for COVID. We spent something like 10 trillion.

Starting point is 00:14:49 By the way, that's what caused a lot of the problems is we flooded the zone with liquidity. Now we're trying to mop that up with interest rate increases. That's slowing down the economy. So there's nothing left to really spend. You can't really drop interest rates much more. And if you do, you'll get much worse inflation. So it seems to me that we don't have a lot of tools here.

Starting point is 00:15:10 And we could end up with something like a 1970 style stackflation where we continue to see inflation with the sewing economy. Let's unpack what that experience would be like. Economy slowing, there's less job openings. People are spending less money while the prices of goods and services continue to go up That's why they spend less money and that's why there's Recession like I mean you're paying six bucks for gas. You have less money to go out for dinner every week, right? You pay You know twice as much for an airplane ticket. You don't spend as much on the hotel.

Starting point is 00:15:46 I mean, the rippling effects of the rate of inflation are decreased spending, and there isn't enough time for the new job creation engine to catch up, and without a stimulus effect, you're in trouble. That's really the situation we're in, and that's what can kind of cause these stack-flation or effects to to drag on almost every other time we've had a recession People couldn't find jobs and I can remember them qualitatively people saying hey, I want to get a job

Starting point is 00:16:16 I need more money. I can't find one and now we're sitting here with more jobs Then we can fill still over 10 million jobs available and people are still resigning from jobs. So how do we factor in the labor market, Shema? Well, it's super confounding. It's not like previous ones. It is. I actually think Jason, the explanation for all of this is not necessarily about the supply-demand dynamics

Starting point is 00:16:41 of labor, but our social policies related to our birth rate and immigration. I posted this article link for you guys to read in the Atlantic, but basically our birth rate in 2021 absolutely fell off a cliff. It was less than 300,000 net births in the entire country. And net birth is defined as immigration plus births minus deaths. And when you look under the covers, you know, we had two really discontinuously bad things. One that was that has been building since Trump and one that was acute. The thing that was acute was that in 2021, after we had vaccines, which is crazy thing to think about, we had a

Starting point is 00:17:20 million deaths basically, right, because of COVID. So that's a million people that largely exited the workforce plus or minus. Obviously some, not all of those people working, but I think the overwhelming majority of people. Probably 50%, we have 50, 60% of our participation also. More, more, I suspect, I suspect it's really good. Some could have been retired, right? That's what I'm saying.

Starting point is 00:17:41 I think it's probably like 70, 80% of the people that died were probably in the workforce in some way. So you had all those people leave. We have a troublesome issue with birth and birth rates. All Western economies do. Basically, as a standard of living goes up and as the equality between men and women go up, birth rates go down without commenting on the dynamics of that. That is just true. And so, we should celebrate that in the sense that like you want increasing equality want people to have more choice etc all these things. So how do you make up for the gap while you make up for the gap in immigration and the problem is that trump closed the door.

Starting point is 00:18:19 And Biden has not reopened the door. And Biden has not reopened the door. And so, you know, we have had a meaningful fall off in immigration. It doubly compounded because of COVID, we had border controls and we shut the borders completely. So even if, you know, you were a student that would come here, odds were maybe you'd get a master's repeat, and then stay here, none of those people can, so nobody can get in. So that's the real problem that we have to solve Jason which is that you're not going to get you know families to all of a sudden have kids. You know that

Starting point is 00:18:50 that's a 18 year problem if you started that problem today to get them into the workforce or 25 year problem. So immigration is really the only solution and we don't really have the sponsorship to do that at a domestic policy level. Well, and then you add to that the fact that labor participation, which when we were coming up 67, 68% of people in the country were work choosing to work. And now we're down in the 60% and maybe ticking up to 62% it looks like on that Fred website. So we need to greatly increase the number of people in the country and the people participating in the labor force if we're to avoid a recession, right? More people working.

Starting point is 00:19:28 We need to work in our position. We need to boost it. Yeah, I would encourage everybody to read the Atlantic article because I think Nick Thompson does a very good job of just basically summarizing the issues that we have. Freiber word of your thoughts here. Is it getting more people to participate in the labor force, importing more people both, and then how do you get that to actually happen? Sorry, Derek Thompson, not Nick Thompson.

Starting point is 00:19:52 I look, I'm not an economist, but I don't know if that really solves the acute runaway problem that we're experiencing right now. One thing I'll say about inflation, let's say you're running a company and you raise your prices. You're not often going back and dropping your prices again. You have to have a catch-up effect for income and savings to make up for the increment in pricing.

Starting point is 00:20:18 That's really a key driver right now that the rate at which prices are going up and you know, sure gas and other commodities trade back down but consumables, durables typically stay high after they inflate, you end up having you know kind of this persisting effect and it's really hard to kind of just grow your way out of that. So you know without stimulus and so you know I'm not sure the labor solution is going to solve this kind of acute problem that we're going to be facing that seems to be, but what do you think about the argument though that there's a substitutional effect, meaning when prices of goods rise, people find cheaper goods. And then separately, what happens is, you know, part of a productive society is you make

Starting point is 00:21:03 better and it more interesting and more useful goods and services. And incrementally, especially if you use technology, those things tend to be deflationary. So they do get cheaper. Meaning, you use to pay for photo storage, Dropbox comes along, gives it away for free, then Google comes along and gives everything away for free. Yeah. So you have this deflationary, natural deflationary effect where you tend to save money on the things you used to pay for because a lot of people find that they can build a different kind of

Starting point is 00:21:29 business model to monetize giving it to you or subsidizing it. I think this, the key to math is that if prices go up, then entrepreneurs are going to look at say, you know what, there's a better way to do this. You want to go on vacation, you want to stay somewhere for two weeks, you can't afford the hotel. Okay, let's try this new thing like this Airbnb, somebody rents you their apartment, they move in with another person. For the week, you use their apartment and you can rent for 159 instead of 350 at a hotel.

Starting point is 00:21:54 That pricing, when there's runaway pricing, people come up with better solutions for people. Yeah, I think that that's generally been true. And by the way, if you think about the biggest areas that have been sticky, which are energy policy and housing policy, the way that we'll have to unlock better pricing in those markets will be because we deregulate, not by increasing regulation, but by massive deregulation. We have massive nimbism up and down the stack that prevents us from building the housing supply we need. That has to get fixed. And we need to have better energy policy.

Starting point is 00:22:32 Like for example, you take a state like California, it's the most popular state in the country, it's the richest state in the country, but it has an electricity prices that are three times higher than the national average. That doesn't make any sense. How do you expect renewables to really compete when people are so incentivized to fire coal and that gas? It doesn't make any sense whatsoever. These prices cannot be this high. They're high because of lobbying and because of lobbyists and special interests. If you rip that stuff out by deregulation, you actually allow, as you said, Jason, entrepreneurs to do the right thing, and they will push prices back down. Zach? Yes, your question.

Starting point is 00:23:09 Well, though, you might want to comment on what we're talking about entrepreneurs, creating products and services, that lower prices, that then maybe create the exit ramp here to inflation and stackflation, some combination of of that that's going to be upon us. Sure, I mean, there's a lot of entrepreneurial energy in the US. It's strong. The technology does cause deflation. It's deflationary. But this is not going to help us get out of what's coming over the next year or two. Look, the bottom line is that we had a massive government overreaction to COVID in which we printed and spent way too much money, something like 10 trillion plus.

Starting point is 00:23:50 And you know, this is the classic hangover after the party. You know, they put the punch bowl out for way too long and now we're all going to pay the price for it. They spiked the punch bowl. They spiked the punch bowl big time. Yeah. And we're already seeing it. Think about like all the advice we're giving our portfolio companies to slow down their spending

Starting point is 00:24:06 and extend their runway. Every board in America is gonna be doing that. So it becomes self-fulfilling prophecy. But this yield curve inversion is, you know, fairly predictive. I mean, it's not perfect, but you know, CNBC had this report today. Historically, it's met when the yield curve inverts.

Starting point is 00:24:23 It's been a better than two thirds chance for a session at some point in the next year. And greater than 98% chance for a session at some point in the next two years. So it looks to me life. It needs to be inverted for at least 90 days, typically. But again, I think if you look at the forward spread from the Fed, it's more accurate than the two stands. But your point is the same. Something is happening that we need to take seriously. And none of the outcomes here are growthy good outcomes. And the policy wands in Washington really need to figure out what their position is going to be on this stuff and what they push next in terms of legislation. Because we're going to be going into the back half of the year in the midterm election

Starting point is 00:25:05 where the economy is slowing, interest rates are high, prices are high, this is a horrible setup for the day. Yeah, and let's think about what the priorities of the administration have been throughout all of this. I mean, one year ago, they did that whole $2 trillion American rescue plan. They were warned by people like Stanley Druckenmiller that retail

Starting point is 00:25:25 was back, the consumer was back, and yet they still printed two trillion. That caused a huge amount of inflation, it totally backfired. And that wasn't the end of it. If they had their way, we would have had four trillion more of spending in the whole bill back better. Now Biden just floated this new traw balloon over the Sun-real tax. So last year they floated the trabalune about basically doing a wealth tax and Everyone hated it and now they just proposed it again It was insane and even when they brought it out They leave that they had mentioned support behind it and then the next day Mansion came out and disavowed it and said no, no, I don't support this. I mean, what is the administration thinking?

Starting point is 00:26:03 It makes no sense. Well, I mean clearly a foreign policy. I mean, what is the administration thinking? It makes no sense. And then clearly, a foreign policy, I mean, I strongly believe we could have cut a deal on Ukraine a year ago to diffuse this whole situation before it turned into a war. Now we got a war over there. So let's talk about what they should do. I mean, number one on the list for me is, we should be getting every entrepreneur

Starting point is 00:26:21 from around the world, any really intelligent person who wants to go to graduate school here into this country. We need to have like a Manhattan project to just scoop up all these mutant geniuses from around the world and get them here and get them starting companies here. You don't even need to do that.

Starting point is 00:26:37 It was working. I don't fucking up. Bush, Obama, all you had to do was just leave it alone. Everybody who was any good at anything wanted to come to the United States, including the three of us. Yeah. And all of a sudden, it's like, nah, it's good. Yeah, I pass. Yeah. Okay, I guess.

Starting point is 00:26:59 Yeah, well, I mean, if you set out that you hate entrepreneurs and you resent them for success, don't be surprised if they want to stay in a country that. I don't think that's what it was. I think it was much cooler than that. I think that we went to a posture that said, okay, you know what? Net new immigration was viewed as something that was displacing people, wasn't a net value creator, was, you know, in some cases viewed very xenophobically, and that is really problematic

Starting point is 00:27:29 because it's actually about a large population issue, and it's about how you construct a healthy thriving population. Yeah, this was Trump's worst approach. He was best approach, clearly not starting war's worst approach, shutting the borders down for some populist reason when we actually need people in the country. Well, hold on, but see the way you just framed that is why I think there's a problem, which

Starting point is 00:27:52 is, look, obviously, the immigration is a very fraud issue. But the choice that's being presented to us by our political parties is either you're in favor of immigration, you know, like bringing in all these superstars, like we have founders in Silicon Valley, that makes sense. Or you're in favor of open borders. I mean, why are those the two choices that we either have H1Bs or you have an open border? I mean, that makes no sense.

Starting point is 00:28:16 I mean, what we should have is a sensible immigration. First of all, we should strip the border security issue out of it because whatever the number of immigrants in your land. Absolutely. I meanborder security. I mean, we need a point-based system. We need to have a reasonable discussion between Democrats and Republicans about a point-based system.

Starting point is 00:28:31 Right. There's a qualitative distance. You've got to give that for a long time. It works in Canada, and I think you're absolutely right. Australia and New Zealand. Australia and New Zealand. Australia and New Zealand. They all have this.

Starting point is 00:28:41 It's like, what does our country need right now? Okay. Do we need people, you know, who now? Okay, do we need people, you know, who are laborers or do we need people starting companies? Do we need, you know, scientists? I don't know if you've noticed, but to me, this is very equivalent to the removal of SAT and X scoring and admissions in college. The notion of merit, the notion of performance is not one that really matters in this country as much right now as much as the notion of equity. And equity really has kind of become the mainstay of not just how we're making policy decisions

Starting point is 00:29:09 on a local level, but a lot of these kind of national issues are becoming about equity. And it's about, you know, equitable consideration for wealth creation, for existing citizens in the United States, and the perception that a minority of people or some majority of people actually missed out on significant wealth creation over the past couple of decades as globalization and technology advances have accelerated growth in our economy and the share of that growth has been disproportionately assigned to a small percentage of people. And I think it is that same notion that drives a lot of the kind of sub-decision, the local

Starting point is 00:29:43 decisions that we're making, as well as these important policy decisions. And the point that I think is critical, it's really hard to get across to everyone or anyone for that matter is that, you know, and I've talked about this a lot, but progress brings everyone forward, but it doesn't bring everyone forward symmetrically, right? Progress brings everyone forward. Give it example, Freiburg. So Amazon's a great example.

Starting point is 00:30:08 I've used it a lot. With Amazon, we've all been given access to more goods and cheaper goods than we would have had before. So we all benefit from that progress. Everyone can get on an app and get a friggin inflatable swimming pool delivered to their home and the vitamins they need within 24 hours at half the price of what it would have cost them to go down to the local Ace Hardware store.

Starting point is 00:30:27 That's an incredible benefit for all of us. So our share of wallet on that sort of goods has gone down. Therefore, we can spend more, get access to more stuff, and we're all prospering. And if you think back to what life was like 30 years ago, 20 years ago to those of you who were spending money 20 years ago or whatever, it's an incredibly different proposition than what we had back then. And it really has changed the world and changed all of us as consumers' ability to consume more.

Starting point is 00:30:50 That's amazing. The problem is Jeff Bezos is worth $160 billion. So everyone looks at that and they want to land base Jeff Bezos and they want to say, this is unfair. And equity becomes the discussion, which is why is one guy worth $160 billion? The reality is he benefited everyone. Everyone got benefit from the value that he helped create in this world and this market.

Starting point is 00:31:10 And then the reaction is, we got to stop this from happening. We can't let people be worth $160 billion without putting their eye on the point that, you know, what I'm spending three grand a year or less because of this, because of this technology that he brought to market. And so there's a lot of these solutions that I would say are progressive. They progress us all as a society. Everything from biotech to technology and software,

Starting point is 00:31:34 to any sort of business or services innovation that people are willing to pay money for, that people are willing to embrace in an open and free market. And then what happens is the spoils of that progress aggregate in a small way to a small number of people. And that's the payoff and capitalism. But when that happens over and over again for 250 years, you fast forward.

Starting point is 00:31:56 And by the way, a lot of those compound people wake up and they say, I don't want that anymore. And they miss the fact that progress is taken for granted. And here we are. We want to give up progress and we want to get equity. And it's going to cause a real ripple effect that's going to last for decades. And it's not the first time we've seen it, right? This has happened historically over cycles at last hundreds of years and it's happening now in the United States and in the entire Western world. And I think it's going to be really unfortunate generally for progress and all the ones.

Starting point is 00:32:25 All the advocates for equity are going to kind of raise their hand. I think you're totally right. What's the solution? Because it's just a really sad place to be. I've thought about this a lot. And I look at what China did and everyone's going to say I'm pro-China, but what was interesting about China

Starting point is 00:32:40 recently is they ratchet up and they ratchet down that free market system. So they allow progress and then they disallow progress when the equity meter goes the wrong way. And so if you kind of think about an equity meter and a progress meter, you have to balance those two over time because otherwise what happens is you spring back. And then the springing back is when governments change,

Starting point is 00:33:01 revolutions happen, democracy falls apart, autocracies arise, all those sorts of awful things. Really, I would say those cyclical things that happen, I don't want to characterize any of them as good or bad, but the cyclical things that happen with society over time. So that is effectively what's happening, guys. The ultra high tax rate, the regulatory regime, the government coming in and stopping Facebook, I mean, these sorts of behaviors are almost like an attempt to mute and ratchet down both inequity as well as the unfortunate side effect of progress.

Starting point is 00:33:35 And I think you're basically punishing excellence. And that is challenging for long-term growth. You're minimizing progress to improve the rate of equity of distribution of gains, right? And it's very hard. But by the way, what you're also doing is you're relating a first derivative and a second derivative effect.

Starting point is 00:33:53 And so, you know, a first order and second order effect. So it becomes a really difficult thing to, and people don't really see it this way. People see kind of the very, you know, myopic view of I gotta redistribute wealth, I gotta help people that are out of jobs. These guys have only seen their income go up by 10% while everyone else has income gone up by 40%. And so, politicians, legislators react to that circumstance.

Starting point is 00:34:15 But zooming out is that circumstance arose as we all made progress with respect to security, with respect to health, with respect to food availability, with respect to consumables with respect to health, with respect to food availability, with respect to consumables being cheaper, et cetera, et cetera. All these great things that progress has given us. And, you know, there's a ratcheting effect. The hope I have is that ratcheting isn't too binary. It doesn't flip too far back the other way too fast, in which case you have a socialist state arise,

Starting point is 00:34:44 a revolution arise, you know, all the things that we've seen kind of come out of like people just canceling AP math in California precisely precisely and then and then the the rippling effects of no more AP math and no more SATs is You know, Roro like you know, yeah fast forward 20 my team brought back the I don't know if you saw this week my team brought back SATs as a qualifier After they paused it I think a lot of people are starting to realize this is a road to nowhere the, I don't know if you saw this week, MIT brought back SATs as a qualifier after they paused it. I think a lot of people are starting to realize this is a road to nowhere.

Starting point is 00:35:09 Zach, what do you think is to Chimaltz Point, like, is there a solution to get America behind excellence and pragmatic kind of solutions for immigration? And if there is a way to do that, how would you do it? Well, I think like we're talking about, you got to kind of unpack the issue. So like we talked about strip border security out of it, don't make that part of it. Then I think you got to differentiate between high school and low school immigration, like what you call the points system. I mean, if you look at who's founding companies in Silicon Valley, something like 40% of

Starting point is 00:35:40 startups have an immigrant co-founder. So clearly, immigrants bring a ton of entrepreneurial energy to the US, but we also, it's in our selfish interest to make sure that the immigrants were letting in actually have the skills that make them potential founders. So I think it would be smart for us to think that way. And you can't even really have that conversation it seems like today to have more of a skills-based

Starting point is 00:36:04 immigration system. I mean, who's wanting to say that? Well, you could just say three buckets. Here's people who need amnesty because they're being prosecuted in their country and they're here because of humanitarian reasons. Here's a bucket for high performers who are gonna add to our economy and create jobs.

Starting point is 00:36:23 And then here's another bucket, which is a lottery and a lineup system. Hey, you want to come here because you don't have skill but you want to come here because the country is so great. Okay, you know, each of those buckets is going to have its own process and your odds might be different in each bucket. You know, is that so hard for people to grok? Right. But you gotta remember, you know, we're we're sitting in the economy. I mean, it's very easy for us to say this because we are sitting in Silicon Valley and for us, immigration is an economic good. It's a benefit. But if you are in a part of the country or a part of the economy where you're in

Starting point is 00:36:57 a low wage job, maybe you're a service employee or you're a union employee in the Midwest, the more immigrants that are led in that are low-skill, they compete with you and drive your wages down, and that's why people are against it. So, that's basically the conundrum is, as long as you're talking about immigration as being a single thing, it's going to have a lot of political opposition. That's why we need to bifurcate it between high school and low-skill. Let more Let more high school people and less low school. The least, if you had to rank them from least controversial to most controversial, I think letting in high skilled labor is probably the least

Starting point is 00:37:35 controversial thing. Then, and there is always controversy around this. It's always on the, you know, the bucket of people for humanitarian grounds, right? Some people agree, some people disagree. Should these people be considered refugees? Should they not, how many of your family members should you be able to sponsor, how many not, et cetera, et cetera? And that's somewhat controversial. But I think we can all agree. The most controversial bucket are folks that would

Starting point is 00:38:00 otherwise come that would be considered lower skill because they are the ones that really put pressure in very practical measurable ways into the economy. And we just have to, to your point, segregate and differentiate how we think about this problem. Because again, if you take immigration the word away and actually just use immigration as an input to this equation on population stability. We have population instability right now. So unless we figure out something between live births and deaths, which I don't think we're going to solve tomorrow. It's going to lead a very large imbalance that our economy and our country cannot really recover from.

Starting point is 00:38:45 You know what, it's, you, you spark by thinking there, it really is a framing issue. We should not call high skilled labor coming here as immigration. We should be flipping that to talent acquisition. We should be looking at it as America is trying to get more talent here so we can win the industries that matter.

Starting point is 00:39:01 And if we looked at it as, this is talent acquisition as nothing to do with immigration. This is us going out and sourcing the smartest people to come here. So our companies win against other companies in the global economy to create more jobs for American. Talent acquisition could be something we could be investing in. We should be thinking, how do we win that? All the problems that ALS, the solution is in some hard working group of men and women of which some will be entrepreneurs who want to be here.

Starting point is 00:39:29 You know, we're trying to figure out how to actually build their own chips. Well, there are semiconductor experts getting trained whether here or abroad, who would want to be here to do that job on behalf of the United States, right? We want to figure out climate independence. There are men and women being trained here in abroad who want to be here and solve that problem on behalf of the United States on and on and on and on. And that's what it means to be, you know, use a sports analogy, you know, the LA Lakers, right?

Starting point is 00:39:56 That's what it means to be, you know, the New England Patriots, everybody wants to play for you. And so when you're in that position and you have that branding tailwind, you have to use it to your advantage to stack the deck in your favor so that you're constantly winning championships. Otherwise, you're being really derelict in your duty. And I think, hopefully if people look

Starting point is 00:40:18 at the broad population level issue that we just exposed because of COVID, there is a stat in this article as an example. In the county of Los Angeles, we are now in the last 20 years, we've seen a 50% reduction in the birth rate in LA from 150,000 births here to about 100. And if you forecast that forward, you know, before the turn of the century, the county of Los Angeles will have zero net births. If you run the... that's insane. So we need to figure out how to solve this problem.

Starting point is 00:40:56 Because it's a... it really impacts GDP. It impacts all these other issues that Freeberg just talked about as well. The sense of equality and fairness, if we're not creating and growing, we are going to fight over how to split a shrinking pie. And that does tend to lead to revolution. Yeah, that's when people, it could get really gnarly. We're not growing entrepreneurs, we're not coming here. New jobs are not being created.

Starting point is 00:41:21 Imagine if Amazon wasn't created. The historical implications for what Freeper Accent are really well-defined in history. If you go back thousands of years, you look at every single time an empire goes through that period of decline. When they have net negative growth, economic growth, and they have this sort of rising populism, what they end up doing is they end up fighting, and they have different ways of fighting, but they end up doing is they end up fighting, and they have different ways of fighting, right? But they end up fighting over how to reallocate a shrinking pie. And there are many of those outcomes when they fight that ends up in, you know, really turbulent moments in history.

Starting point is 00:42:00 And that's where this wealth taxed. Yeah, that's right. that's where we have a responsibility to make sure you don't end up going through You know a Russia scenario a China scenario, you know And there there are more productive ways to to solve these problems Oh, that's where the wealth tax that was floated which seems let's do it already But this concept of everybody having who's over a hundred million dollars to assess while they're worth and give 20% back minimum each year, is that dividing of the pie. And maybe they can allocate less money towards. Can we all agree that like, you know,

Starting point is 00:42:35 on the margins when you make a lot of money, you can and should pay more taxes? I don't think that's a super controversial idea. You know, on the margins, if you are a massive polluter, you should pay some taxes to compensate for the damage you're creating to the environment. These are not controversial ideas. The problem is that, you know, what Saksad is true, you take a sensible concept and then you pervert it because you have to contort it with all this language to make it political

Starting point is 00:43:04 and it loses all of its value and it then. So for example, you know, why does the administration have to write this law, potential law or proposal, in a way that so obviously violates the constitution of the United States? Are they that dumb? I don't think they're that dumb. But they do it to appease some political aspect of the Democratic Party, and then as a result, it becomes DOA within eight minutes of it being announced. Imagine says this is dead. What is the point of that theater? It's virtual signaling. Aren't you a donor? You should know, right? What would they tell you? I mean, what's the Democratic Party saying? I think what they

Starting point is 00:43:37 would say off the record is that these were sacrificial totems to the progressive left, meaning that they do it for window dressing to just like it's like throwing a cat a ball of yarn. It seems like that that populist progressive left is becoming a bigger base than it was historically. In the downcrack part, it is. I'm not sure how big it is, but in the downcrack party, yeah, look, it's where all the energy is the downcrack part, and it's where a lot of the donors are. Yeah, that is who's driving the agenda energy is the direct party. And it's where a lot of the donors are. That yeah, that is who's driving the agenda in the direct party today. That is why the Democrats are going to get shot at in November read, void to share his sub stack. He is the

Starting point is 00:44:15 Democratic political consultant who wrote the emerging Democratic majority predicting this is back in 2002. He wrote a book about how there would be a new Democratic coalition of young voters and minorities and women, and they would come together and that would create a Democratic majority and Democratic presence forever. And then Obama wins in 2008 and it looks like to share his predictions coming true. And he recently in the last two years has been warning that something has happened that he could never have predicted, which is that working class voters are now moving out of the Democratic Party. Not just whites, but also Hispanics and Asians, even black voters who are working class who are all moving to the Republican Party. So he believes the Republican Party is losing its national majority.

Starting point is 00:45:00 Why? Because progressives have taken over, and on cultural and social issues, they are much more liberal than the working class of this country. So basically, what's happened is the Democrats have become a professional class party, and the Republicans are in the process of transforming into a working class party, and that's turning everything upside down. But ultimately, with young people winning in Virginia last year, and I think the Republicans on generic ballot are up like what, plus 10, plus 12. I mean, they're going to have a huge, I think, wave in November. You know, you got to remember that professionals, meaning college educated voters are only

Starting point is 00:45:38 about a third of the electorate. I think about 37%. And then the other 63% are working class. The working class does not like this extreme social cultural progressive agenda. They don't like seeing their statues ripped down. They don't like this sort of what they see is kind of this antagonism towards American history

Starting point is 00:45:57 and American icons. They don't believe in socialism, you know, and so on down the line. And the Democratic Party is increasingly speaking only to itself. I mean, they are in an echo chamber. And I think these progressives are gonna have to lose a few elections before they realize. I mean, the same thing happened to the Democratic Party

Starting point is 00:46:16 back in the 1980s, right? You had Ronald Reagan and then George Herbert Walker Bush went three landslide elections, and he four 88 and then find the democrats nominate these like horrible candidates to meet Carter Walter Mondale de caucus and then who comes along bill clinton great sees on the great do caucus was pretty great okay like we found the one fan we found the one fan you know who comes along yeah who comes along in, Bill Clinton, and he has this whole new faction within the dark guy party that DLC. And his explicit mandate was to lead them back to the center. And then he chooses Al Gore as his running mate to double down on that image. I don't

Starting point is 00:46:56 think Al Gore actually was that centrist. I think his image at that time was that he was pretty centrist. So, so you had, yes, I mean, I think at that time. So, their Democratic Party had to lose for about 12 years before they nominated a candidate and put him at the leadership of the party, you could drag them back to the center. Now, listen, I mean, all we have right now are foreshadowing of this.

Starting point is 00:47:21 We have the Youngkin victory last year. We have the fact those three school board members, San Francisco, got kicked out. We'll see what happens to Chase of Bootheen on June 7th. So we're getting these glimmers, and I think November will be a big test. But where I think this thing is headed is that the working class voters of this country don't like this radical progressive shift in the Democratic Party. And then the Democratic Party is going to keep losing until they're willing to make changes. Well, an immigration is just such an easy one and courting the working person is what the

Starting point is 00:47:54 Democrats did forever. So I don't know how they how they can screw this up. Well, but remember, working class voters don't what working class voters are not in favor of immigration, Jake. How they do not want a limited number of immigrants come. Well, they don't want unlimited, but they would like to see their family members driving their wages down, but they do want their family members to be allowed in. So for the folks who know you talk to you talk to Hispanic voters who are citizens in America. They are not in favor of unlimited immigration. Well, no, it's a limited for them reasonable. I'm telling you that it's not it's not like what you think. The higher you are economically in the social strata, the more professional you are, the

Starting point is 00:48:31 more you like immigration, because like for people like us, we like immigrants because they found companies and we invested in them. We see the economic vitality that they bring, but if you are a working class, you do not want that wage pressure. But if you are a working class, okay, you do not want that wage pressure. You just don't. So unless the Democrats figure out a way to talk about it, the way we're talking about it, where we separate high skill and low skill, they will lose with that message. All right, let's get into some other things happening in the market. SEC is proposing

Starting point is 00:48:58 a new set of rules to regulate SPACs. I wonder if anybody here can chime in on this. Well, I wrote, Who knows about that? I wrote an editorial in Bloomberg. Basically a year ago, spelling out a bunch of new regulations that I thought the SEC should adopt. They adopted a lot of them in this draft. So I think that that's really good. They missed a couple of key things. And this is again tying back to this other thing.

Starting point is 00:49:22 When we're in this phase right now where we are really questioning how capitalism should work, I think that there are two reactions that people can have. One is you pass more regulation that in trenches existing advantages. And the other is you pass regulation that either deregulates or democratizes a market. And if I had to cast the half of my proposals that the SEC adopted, I would say it falls more into the first bucket than the second.

Starting point is 00:50:00 And Jason, you've spoken to the second bucket of laws that the SEC could also change, which is, you know, it's in their power to give people an on-ramp to prove that they are qualified and accredited, so that they can participate in some of these really, you know, vibrant ways of making money beyond just investing in the S&P 500, like investing in startups if you're educated and capable of doing. The SEC at the same time proposed a bunch of legislation around reporting requirements for ESG. And if you look at both of these two buckets of laws, I think they're rooted in good ideas and I think that there are some good concepts in it.

Starting point is 00:50:38 But who really wins? I think if you look at it, the American Bar Association had a huge victory here because the amount of incremental regulation is going up, which means, you know, what was a 300-page filing with the SEC will not be 350 pages, right? I think that benefits lawyers. I think it benefits consultants. I think it benefits the accountants. So I think it benefits the ecosystem people that participate. It's not so clear how normal everyday folks benefit

Starting point is 00:51:10 from a lot of this stuff. So I think if you strip it all the way, what I would say is, I think the SEC's trying to do the right thing, but I would really encourage them to do the second half of what they should be doing, which is making these on-ramps better built. So, generally speaking, what do you think happens in the SPAC space?

Starting point is 00:51:30 We had 600 of them. It's going to consolidate to the 10 of us that know what we're doing. Got it. Just like, you know, look, the IPO rules are extremely sophisticated. Did it hurt Morgan Stanley or Goldman Sachs as IPO business? No, it just met that the 95 small banks that did IPOs went away and it consolidated to six and the league tables, you know, just churned between the six, JP Morgan one years the top, you know, then it's Morgan Stanley,

Starting point is 00:51:55 then it's Goldman Sachs, then it's B of A, then it's Credit Suisse. Similarly, Spax will consolidate around six or seven players and, you know, we'll do most of the business. What do you think, Friedberg, of this new SEC announcement that they're considering climate disclosures for public-traded companies? This would, basically, not only what they're doing in terms of consuming or allowing greenhouse gases and emissions, but also this scope-3 concept, your inputs, what is your supply chain doing and what are your consumers doing? So if you're making the iPhone, what happens to the iPhone when the consumer gets rid of it? Or what did it take to get those minerals out of the ground to make the iPhone?

Starting point is 00:52:34 What do you think is this a net benefit? Is it the lawyers win or does measuring all this actually mean we're gonna see publicly traded companies manage it better? A lot of opting into it already like Google and Apple are doing it on their own accord. But what do you think generally of this regulation? Well, let me just say something on the SPACs, and I'll answer that question. If you read the comment, the first SEC proposed rule, it was to amend the definition of a blank check company to make the liability safe harbor for forward looking statements such as business forecasts, unavailable in filings by SPACs. So, you know, this was, you know, I think one of the primary points of appeal

Starting point is 00:53:13 over the past couple of years, we've all been private market, sophisticated private market investors. When we take a pitch, or hear a pitch from a company, we all have the experience and the know-how, not always correctly, but at least we know what to look for, what to ask, and over time have learned through our wounds and our failures to appropriately diligence forecast and understand

Starting point is 00:53:37 what they mean and what they say. And you know, because the public markets historically historically through an IPO, are available to retail investors, generally whatever the definition is of unqualified or folks who may not have the level of sophistication that some regulatory body has deemed as needed to be able to do that level of diligence, the statements that are made in an IPO and an S1 need to be kind of factually referenced, referenceable. And that's not true when it comes to forecasts and that's why they're not included in S1s in an IPO.

Starting point is 00:54:13 But in a spec, the appeal was you can tell you're forward looking forecast, paint the rosy picture like you would for a startup, and then theoretically, the investors should make an assessment of the risk and the objectives that the business is saying they're going to go shoot for and achieve. And it's pretty evident, and I think we all knew this coming out of last year that many investors made investments on the basis of those forecasts, being to some degree reasonably achievable or likely achievable, and it turns out that in many cases they were not and were not achieved. And that's the big motivation here.

Starting point is 00:54:48 So the real fundamental question with respect to Chimoff's point about markets is how much do you want to have the government and a regulator play the role of deciding who is and who isn't sophisticated enough to make an assessment about a business is forward looking prospects. Or should we simply keep all forward looking prospects or forecast like this, out of those documents? And it's an important conversation to have. Because for years, people have been saying, I want to invest in private companies,

Starting point is 00:55:16 but I'm not a qualified investor. Therefore, I'm only going to be able to invest in public companies. And as we're seeing, the problem with investing in private companies or speculative companies is that you're investing on the come and more often than not, that doesn't end up happening. And that's a really hard lesson to learn and spacks have kind of forced the retail market that have not historically invested in private companies to learn that lesson very fast.

Starting point is 00:55:38 This is why, by the way, in my, what I, what I was asking the SEC to do on top of the things that they already did was I said, make us all invest our own money. Make the sponsor really monetarily at risk. I've invested a minimum of $100 million in every single deal I've done as a SPAC sponsor. That's a lot of money. More skin in the game and disclosing that would be great. And maybe even having a clearinghouse where you could see the percentage of cash to the ultimate raise that the promoter has would be. That's not for great. All of that stuff, Jason,

Starting point is 00:56:11 is in the spirit of disclosure and transparency. I just probably would have done that. You still think it's important to have forward looking statements and needs inspect. I mean, if that ends up becoming, the cornerstone of this proposed regulation. I don't think it's a cornerstone. I think what I think the thing is that there are really important businesses that need

Starting point is 00:56:32 good stewards to help them get into the public markets to raise money to fund their business. And there are some people who really understand that and there are many others who don't. And the thing that the SEC should make a decision on is whether just having a bunch of middlemen serves a market better or having a combination of some middlemen and some principles, all competing is better. Because remember what is capitalism really? You have these trapped sources of money, right? When you buy an equity, right? Or you buy a bond, you're putting money into a trapped asset. It's an unproductive asset.

Starting point is 00:57:13 It may yield some return. But it's not really generating it. It's dead money. Capitalism is about creating an incentive for you to take that money out of that dead asset, that unproductive asset and put it directly into the hands of somebody who will make it productive. I'm going to, you know, build some oil fields. I'm going to make a battery factory. I'm going to make shoes. Whatever it is, right? And so, you know, having more competition that creates the

Starting point is 00:57:43 incentives for that process to happen, to go from point eight to point B, should be the goal of the government. Because in the absence of that, again, going back to the previous conversation, you're going to basically shrink the incentives of productivity. And I don't think that's what anybody wants to have. It's such an easy solution to all of this. We have a test if you want to drive a car. And if you want to drive a big car called the truck, you have to get a different testing. You want to drive a motorcycle side and take that? By the way Jason, I just want to

Starting point is 00:58:13 have a test. You brought up a really good point early and I just wanted to put a point on what you said. Let's just say all these companies, let's all of our startups included, will now when we go public have to create these disclosures around scope one, scope two, scope three emissions. And there's this weird concept called materiality that exists in law, which will now, again, have to get adjudicated. Let's say Apple doesn't disclose what's actually happening in their factories. Somebody can now sue them because they will say, that's a material disclosure that you didn't disclose. Well, guess what will happen?

Starting point is 00:58:47 That will wind its way and meander its way through the courts. It'll take years. There will be tens and tens of millions of dollars spent on that litigation because Apple will vehemently defend the right that it wasn't a material disclosure because the implications otherwise will be measured in the billions or tens of billions of dollars. So who really wins? Consultants win. Trial experts win. The lawyers win. Lobbyists. Lobbyists. I just want to frame this up for a second because I think it's important for people to think about, you know, costs that are external to the business operation, meaning costs that are born

Starting point is 00:59:26 by the broader society, by other members of society, not the business itself. So let's say that you're a company that makes products with a lot of sugar and you know, or cigarettes that, you know, we know when people consume a lot of sugar, cancer goes up, obesity goes up, diabetes goes up. The cost for cancer treatment, the cost for diabetes treatment, the cost for medical treatment associated with smoking or sugar or alcohol is born by a health system where the ultimate cost is shared by a large group of society, by a number of all members, whether that's a public health insurance program or a private one, there's a group that shares that cost.

Starting point is 01:00:05 And so you as a consumer are not paying that cost today. The question is, should you be paying that cost? And this is true for CO2 emissions, for carbon emissions. You drive a gas gasoline car, you purchase gasoline, there is carbon that goes in the atmosphere. You're not gonna end up individually fixing the carbon out of the atmosphere later. The rest of us are gonna have to bear that cost as our homes burn down, as floods

Starting point is 01:00:28 cause houses to wash away, as all the catastrophe that we're all predicting is going to happen, starts to happen. So, the question is, how do you account for those external costs? And then, the second question that will arise in a market-based system that we have is, who's going to pay for those costs? Right now, we all assume those costs and we don't charge anyone for them. We don't charge anyone for the obesity epidemic. We don't charge anyone for the cancer epidemic associated with cigarettes until we had that big legislation that the DOJ knocked that off. We don't charge anyone today for carbon emissions that we're all going to have to pay

Starting point is 01:01:02 the cost for. And so, you know, the first step is identifying and quantifying the external costs of the product or service that you're providing and deciding whether or not to tax the consumer of that product, whether or not to tax the seller of that product and ultimately how to transition that capital back to the repair mechanism for pulling the effects of that product back out of the system. So in this analogy, Coca-Cola, if people drank too much of it and got fat, would be responsible for their diabetes treatment. Well, this goes back to the sugar tax point, which is, should we have a sugar tax because

Starting point is 01:01:33 there's a quantifiable effect that too much sugar has on human health, obesity, diabetes, cancer? So that's an argument, right? Yes. And so in order to do that, the first step is disclose the risks, disclose the associated conditions that arise from the product or service that you're offering. And I think that's part of the intention. A lot of very smart progressive people in capital markets, some good friends of mine,

Starting point is 01:01:56 we have been talking for years about the importance of this level of disclosure because it is the first step in truly accounting for climate. For climate, you're talking about. Yes, for climate. We're talking about. Yes, for climate. Yeah, pretty controversial. So actually, we think we should charge. We should charge Coca-Cola for diabetes.

Starting point is 01:02:12 Well, go ask the question of should you charge for carbon related product for. Okay. I'll ask both. Carbon should corporations be responsible for the downstream carbon from their Customers and the upstream inputs at least disclose it inside who is ultimately gonna have to pay for that Or the answer to the former is yes the answer to the latter is If you you know, there's a there's a term shit in shit out. Yeah, and garbage in garbage out I've spent a lot of time in climate. I know what's measurable and what's not. I've looked at the space a lot.

Starting point is 01:02:47 And I just think that there is no credible way to execute on David what you're saying you want. All it's gonna do is gonna create a bunch of money that flows to consultants, that create BS nonsensical reports. And the downstream, and the downstream implication of that will be lawsuit upon lawsuit that gets adjudicated by the courts that's nonsensical reports. And the downstream, and the downstream implication of that

Starting point is 01:03:05 will be lawsuit upon lawsuit that gets adjudicated by the courts on this concept of materiality. You think we should be recording a free burger and I disagree or agree with, Trima? No, no, I agree it should be recorded. I'm saying, it's not possible. I'm saying the only winners in this will be the consultants. You agree with that, Lugare?

Starting point is 01:03:23 I'll agree. These carbon markets are absolute BS. Carbon-C, Questration, Mechanisms are absolute BS. I mean, none of this stuff is real right now. It's all free fraudulent markets. It's all grifter. It's all BS. You'll look at my trash. I'm not trying to be too disparaging with everyone. There are good accords out there in good intentions. For sure. There is a tree, but there's a lot of ways that you can kind of take this stuff apart and say, you know what, this doesn't actually add up. And there's a lot of ways that you can kind of take this stuff apart and say, you know what? This doesn't actually add up and there's a good business to be at in the meantime and everyone feels good running that business. Simple example, Jason. How will you know that a sensor that's on a flu of a manufacturing plant is accurate? How do you know that it's not been doctored?

Starting point is 01:03:57 Hmm. How do you know? Just a simple question. Just that. Well, when it came to Volkswagen, a leak or leak the information and that's and the press got on it and that's how it was regulated. It was in the review mirror. That's how Volkswagen got busted. So that's how we're going to we're going to fix. No, that's a bunch of whistleblowers.

Starting point is 01:04:16 I mean, that's what happened also within RJ Obesco and the cigarettes as well. And once changed as a result of that, nothing. No, in the cigarette industry, that led to the largest fines in the history of corporate America, I think, up until that time. We still don't have a tax. We still don't have a pool that we have a tax on cigarettes. Yeah, for sure. But to lower consumption. Yeah, but we don't, you know, we don't force these companies to basically subsidize a portion of our health crockers. Every time somebody shows up with lung cancers, not like we say, you know what, that's going to be half-born by RGR and Abysco.

Starting point is 01:04:46 Yeah, so I mean, the measurement can't be bad, but I guess it's what you're saying. No, no, no, I'm saying the concept is good. The measurement is literally so terrible as to be worthless. And so wouldn't there be a bunch of new companies that come up though that then create the auditing trail so you say, hey, we're going to put that you have to have one of these companies put the sensors on your factory and it's a young have to. It's a small oddity of, you know, again, there's a lot of companies, for example, this is where Silicon Valley, I think, gets a little, you know, caught up in their own nonsense. There's a lot of companies in Silicon Valley that have made a lot of money measuring bits,

Starting point is 01:05:33 right? Analytics companies because the exhaust of a tech company is sitting in some log file somewhere that's just a matter of being parsed, right? Do some ETL, do some transformations, put it in some beautiful table, run some query on top of it, loan behold, you can know everything about your company. When you're measuring atoms, it's just a little bit more complicated. And I think that people underestimate that complexity. So while the desire of this is good, I think the whole point is that, you know, if you draft this language the wrong way, again, my own, my, I want to be very precise what I'm saying. What I think it will do, instead of actually causing more

Starting point is 01:06:05 conformity and have people emitting less carbon, it'll create a shadow industry of measurement and consulting around this industry while people debate materiality when they get caught. Got it. That is not the point of this. But when you draft laws like this, you have to think about these implications. So is there is there an easy answer here or just no easy answers? In terms of if we want companies to be somewhat more knowledgeable and responsible in their carbon emissions. Well, I think that the responsibility ultimately comes from the end consumer by or customer of a product.

Starting point is 01:06:40 Because if they have an alternative that offers them those trade-offs, whether it's at a higher price or a lower price or the same price and they adopt it, then these companies really pay attention, right? Because ultimately, what they really care about is their downstream profitability. Otherwise, I worry that a lot of what's happening in corporate America today is basically some form of greenwashing. You know, so for example, like, we joke, but it's true. When you look at these carbon offset markets,

Starting point is 01:07:10 these indirect offset markets, what are they? A company spews all kinds of gnarly stuff into the environment. They hire a consulting firm. I just wanna explain to you how it works today. They hire a consulting firm who uses an Excel spreadsheet to guesstimate how badly they have polluted the environment. Okay, it's a fundamental guess.

Starting point is 01:07:32 Then they go to another company that says, well, can you buy me some equal and offsetting amount of credits? And that company then will go and plan some trees or buy some trees, claim the trees exist, measure and impute again in a different Excel spreadsheet. How much carbon capture is happening by those trees? Do we know that those trees aren't getting sold 10 times over to 10 other companies? We don't know that.

Starting point is 01:07:57 My point is that we have a lot of work to do to solve these problems. I would rather see, again, raw capitalism solve this problem. And I think in climate change, the most productive thing we could do is lower the barriers for trapped, unproductive capital to get into the hands of really amazing scientists and entrepreneurs who are building things that can measurably remove carbon from the environment. And there's really two ways to do it. One is have a test, and the other is on the roads, we have a speed limit. So if you are a non-affluent person already, but you want to dabble in this, it's a very simple way to do it, you know, I proposed, have a written test, just like you have a

Starting point is 01:08:36 handgun or a car test, a driving test. And then how about you can deploy 10%. It's so incredible, you just said this. can allow an 18 year old person to buy an AR give me the name of the gun AR 15 and a car and go speed down the highway, but they're not allowed to invest in go puff. Yeah, no, they're too, that's a fisticate. You can shoot the bullets in the air while you're going down the road. It's going on. It's well, I mean, there's no path to it.

Starting point is 01:09:03 That's the frustrating part. Like in some places, it's hard to get a gun. You got to take's no path to it. That's the frustrating part. Like in some places, it's hard to get a gun. You got to take a eight-hour test, other places. You can just buy them. I'm like, wherever you allow 18-year-olds, you can allow an 18-year-old to take psychedelics in marijuana, legally, open in a market. But they are not allowed to take out a secondary shares of stripe. No, they're just, yes. And so there's a stupidity of it. Well, here's the other thing. You can have two different things. You have the tests, so now you know the person's educated, but you could also say, hey, listen,

Starting point is 01:09:30 whatever's on your tax return for the last two years, you can invest 10% of that a year in, you know, private companies. So if you made, I don't know, 150,000 in the last two years, you made 75,000 a year. Okay, you can put 15,000 in to come. Let me give you another one. You will allow people to go and work for startups to help build the enterprise value of a startup. Let's pick our favorite startup, like an Uber, but not invest in their equity before they go public. Right. You're not sophisticated. You're sophisticated

Starting point is 01:10:01 enough to drive for them for years to help them build a $50 billion company, but not buy a piece of that company along the way. Yeah, that doesn't seem right either. But you could pull over and buy scratch off tickets and lottery tickets to the cascom home, but you can't buy a scratch off ticket and it starts next no since. All right, Zach, you've been quiet in all of this.

Starting point is 01:10:22 I know that you hate the environment and regulation, what's your thoughts? I'm not, I'm just not deep in this topic. So I don't want to weigh in. All right, well, here's one you are deep in. Facebook hired a GOP lobbying firm to smear TikTok according to the Washington Post, Taylor Ram,

Starting point is 01:10:35 what do you say to the firewall? You say to Sacks. You say this is something you're deep in. It's a GOP. I don't know before that. You said he's like, into destroying the environment or something. Yeah, no, he doesn't care about the environment.

Starting point is 01:10:47 So I mean, Saks is never going to go into the forest and even go near a tree. He doesn't go outside. He doesn't go out. No, he's really looking at his sealed bedroom. He's like, he closed the curtains. He's like, oh, beautiful view of the sky. Oh, nature.

Starting point is 01:11:01 He's not like the Pope. His car has one of these things. He doesn't even have to sit down. It's just enclosed. He stands up. It's bulletproof glass. you know, he just waves as he goes by I go outside sometimes I must prefer going to an outdoor shooting range. Yeah So you going shooting it's an outdoor one So this is a really crazy story teller runs broke it

Starting point is 01:11:24 Facebook paid the GOP lobbying front. Your friend, Taylor Runs. Yeah, actually, I had her on the show. Here is the excerpted from the internal target of Victor email obtained by the Washington Post. Quote, get the message out that while Meta, Facebook, is currently a punching bag. TikTok is the real threat, especially as a foreign owned app

Starting point is 01:11:41 that is number one in sharing data that young teens are using. Bonus point, if we can fit this into a broader message that current bills propels us aren't where our state of turn generals or member of Congress should be focused. So what do we think? I mean, we've talked here many times about reciprocity. We can't have our social networks in China. Why should TikTok be here?

Starting point is 01:12:02 I think we all agree. It sounds like they want to do a PR initiative around the points that you've always made on this pod. Exactly. No, I mean, that's the, that's the, they could be right about this, but doing a dirty, I think TikTok should be back. Yeah, it's a dirty trick, it's a dirty trick in a way for them to deflect attention from the cells

Starting point is 01:12:17 onto some other company's problems. So there's something just tasteful about that. But the point that they're making is kind of true. I mean, we should not allow. I mean, I'm not saying we shouldn't allow them, but I think whatever you think, you think TikTok should be allowed in the United States, really? I don't know about that, but I just think that, what do you think about it for a second?

Starting point is 01:12:35 Most people have with Facebook, they should have them like 10x with TikTok. That's kind of my point. A thousand percent in agreement on this. TikTok is run by a country that we wondered, do they care about the data? And then they literally passed a law. If you want to run your company, the government has to have the data.

Starting point is 01:12:52 I have fallen into a TikTok rabbit hole and I have to come clean with you guys. There's something on TikTok called sandwich br Bros. What are these guys? These guys that make sandwiches. And then they cut the sandwich and then they open it up so that you can see what's in the inside of it. Gochis. I mean, no, some of these fucking sandwiches, these guys are making. I like it. I have watched an hour straight of sandwich talk. Wow. Wait, here's the best part.

Starting point is 01:13:26 So then there is this woman who I thought was going to be incredible. She's like, you know, I'm tired of these sandwich bros. I'm going to be the first woman that really breaks through making sandwiches. I was like, you go get it. And she made a vegan sandwich. God dammit.

Starting point is 01:13:38 And I was like, where is the meat? I wanted to be deep into it, but like, you know, chicken. Roast chicken. Oh my God, it is incredible. Bacon, avocado. Bacon, bacon, bacon. Maybe some pickles in there. Get a little.

Starting point is 01:13:52 Yeah, I mean, this is the thing that I find so absolutely. Chicken masala burrito, this probably my favorite one. What? And the guy made it from scratch, like everything from scratch. I love that. And here's the problem. It's such a compelling product. You feel so terrible using it. So you love it at something and then you feel very vapid for having used

Starting point is 01:14:10 it and you have regret. And then the Chinese are running it and they're programming our children and have all their data and locations. You know, it's a lot of conflicted feelings. What are you trying to program in me with all the sandwich stuff? Maybe you're to then and you need to say, maybe they're trying to program in me with all the sandwich stuff? Maybe you're to them and you need to send me. Maybe they're trying to be vegan, but that sandwich, yuck, it looked horrible. I think this you you just they're trying to program. Yeah, no offense. You get fat, but yuck. That's what they want. They want you to get fat. What are you seeing on your TikTok feed right now? Freeberg since you're so obsessed with your phone and should should TikTok be banned. Should the Chinese be allowed to program our children with their

Starting point is 01:14:47 algorithm? Yes or no, Friedberg? Exactly. Well, just mentioning the product makes you want to use it. So it's so addicting. What is so addicting about Friedberg? Tell me the best vegan sandwich you've ever had, like the best one. Like is there one that's so does Keen wall Keen wall come guys. There's a there's a great sandwich shop in Berkeley you guys You know, I don't think I don't think I ever go to Berkeley. I live in both of those two. Yeah, Berkeley is I get one actually get one uber to over here

Starting point is 01:15:18 Well, what it would is it's not I've got no sprouts. Yeah, there's one I like that's got the I've got no sprouts. Yeah, there's one I like that's got the the feda cheese like the really good sharp salty feda cheese. Yeah, okay. So the cheese is actually voted one of the best sandwich shops in California, I think. Yeah, yeah, really good. No, I made myself a tempeh of a cato sandwich for lunch today.

Starting point is 01:15:40 Oh, yeah, that's fantastic. You know what I was going to do that myself, but instead I just decided to slam my hand with a hammer. It was more enjoyable. I should like smash my hand bag. I had crab brevy only. Oh, wonderful, wonderful. Absolutely great. You murdered those crabs.

Starting point is 01:15:59 Delicious. Okay, but let's just go around the horn. Should yes or no, TikTok be banned. Should a Chinese company be allowed to have a social network at scale in the United States? Yes or no? Friedberg. No, yes, I don't think that we should be rescricting the products and services that people choose to use. Even from a communist country, that is likely spying on them. Okay, got it. We know where you stand. Sex. likely spying on them. Okay, got it. We know where you stand. Sax. Well, I'd want to know that they're not, that is not spyware, right? So yeah, if it's spyware, that's illegal. If it's illegal, stop it. But like, so you're saying you trust, you trust the Chinese government. No, I don't trust them. It would be a serious, it would

Starting point is 01:16:37 be an issue I'd seriously look at. I might come out on the India side of things, but I'd like to understand a little better like what they do. The India side of things being that India has banned. They banned it. They're smart. Indians are smart. I was surprised about that. I just think it's a super slow, good thing you end up seeing China ban iPhones and I mean, the whole thing kind of that's.

Starting point is 01:16:54 We're already banned. They already banned Twitter, Facebook and Instagram in their country. I don't know. There's still a lot. There's a big consumer market in China for US goods and services and it just seems like a separate flip. Where do you send that?

Starting point is 01:17:07 I think you guys nailed it, which is that I think these things have to be quit pro quo. It doesn't make any sense, in my opinion, for us to allow a non-American company to thrive where in that same end market, our products are not allowed to compete. Absolutely. I think there are two things that matter to me, which is that, if we're gonna allow TikTok to thrive here, it seems like there needs to be some version of a deal that says Facebook, Google, these core products and services just need to have a chance

Starting point is 01:17:39 where consumers can vote. That's one thing. And I do think separately what David said is really importantly true. And I don't think it applies to just TikTok, but whenever a product gets to a certain level of scale, and we can define what that threshold is, but it's probably in the half a billion to billion mal kind of range, monthly active users range. You do have to avoid of like, you know, going through the source and making sure there's no crazy spyware in there. And I don't know exactly how to do that. But I think that that

Starting point is 01:18:10 should just be a general expectation for any product because, look, let's be honest. And we've had this conversation before. You don't think the odds are high that at some point, some very talented knowledge worker that is on an immigrant visa inside of one of these large tech companies isn't actually working on behalf of a foreign. Oh, they have Twitter had it. They had two people from the kingdom right there. So, so my point is I think that these things are probably true, right? Like in the tens of thousands employees that work in big tech, there's probably at least five or ten of these people that work on behalf of foreign government.

Starting point is 01:18:46 So we don't know what they may or may not have introduced in certain elements of the code. So it's not unreasonable to fund an organization that can audit this code base. But I think that I would rather let them stay in order to open up that end market for our products. All right. We have to wrap on this free break a couple of weeks ago. You outline the potential of famines caused by Putin's insane, you know, war in Ukraine. That's not what I said, but I'm framing it and framing it the way I want, but you commented on the possible famine caused by Putin's insane war.

Starting point is 01:19:24 Again, not what I said, let's go to famine before sax loses his mind about Biden's quote of regime change, which I'll let you end on. So I actually get you victory lap. But somebody came for you and said, Hey, listen, free broke basically doesn't know what he's talking about because commodity markets are showing that Indian other folks are going to step up and there's not going to be a problem of famine. So can you unpack that for us?

Starting point is 01:19:49 I will tell you that we are already seeing a lot of scrambling happening for redundancy in these commodity supply chains. And there's a couple of issues, which I highlighted before. I'll highlight again. Number one is just the ability to export. So while there may be product commodity products sitting in these markets, getting them on ships out of Russia, out of Ukraine, even if sanctions and trade restrictions are lifted and make them available, is very difficult because a lot of the carriers are concerned about insurance liability as they would be forced to go into a port and do a transaction with an entity that they're supposed to not do transactions with.

Starting point is 01:20:31 So there's a lot of reasons why these ships are not going to port, not picking a product and not bringing it to where it needs to go. Critical risk in Africa in the near term. So this is an acute problem with respect to transport. The next problem is with respect to planting. As of this week, and I'm gonna put a couple of links in here, and these links, Nick are not in order with respect to what I'll say, but I'll kind of put a bunch of these things out here, but there is an expectation that we could see up

Starting point is 01:21:01 to an 80% decline in planted acres in the Ukraine. And there's a bunch of really good anecdotes in this particular story about how farmers are scared about going out and planting because groans might blow them up. And I mean, look, you're in the middle of a war zone. You're not in a rush to go out and plant. And so there's a lot of planting that needs to happen in order for us to have, you know, the expectation of the supply coming out of the field in about six months. So that's kind of the second stage of the supply coming out of the field in about six months. So that's kind of the second stage of the problem.

Starting point is 01:21:25 It's a large export market for goods coming out of Ukraine and Russia. We might have a kind of significant reduction in inventory as the number of acres that are planted goes down. And then the third thing that I highlighted before, which is absolutely still very true and I have put some data in here that you can all look at, is related to the price of fertilizer. So, fertilizer prices through the roof because Nat gas has gone up, so ammonia prices have gone up, pod ash exports are prohibited from Russia, so pod ash has gone up.

Starting point is 01:21:54 And so as a result, we're seeing fertilizer prices shoot up. And in a lot of countries, what I've included here in this particular link in the chat and Nick on the YouTube, you can kind of put this on the screen, but there's a guy named Gary Snitkey. Gary is the ag economist. He's like the number one ag economist in the world. He's at University of Illinois. Everyone reads all his stuff in the industry.

Starting point is 01:22:17 This guy breaks everything down to unit economics. Numbers helps people make decisions about what the plants, what the economics are. And he highlights the current economics for planting in Illinois. Illinois is the largest corn producing state in the US and a critical supplier of our national kind of food supply. And he points out that as of right now, you would have to invest in Illinois about $810 to have a $243 return on corn because the price of fertilizer has gone so high. So you invest $810, you expect to make a little over a thousand and these are not assuming rent. The problem is when you factor

Starting point is 01:23:03 in the cost of rent, the average rent can Illinois $227. So a lot of farmers in Illinois rent their land about half-gay. And so for a lot of farmers, it's actually un-economical, not just in Illinois, but around the world now, where the cost of the inputs, the cost of rent, the cost of production

Starting point is 01:23:21 exceeds the expected profit coming out of the farm. And so farmers are not going to plant. And so we're seeing kind of a major issue with these farmers around the world kind of making planting decisions right now that are informed by upside down economics. This is being monitored, fortunately in the US, the USDA reported today, that it looks like the price of corn is such that a lot of farmers are going to go back and plant soybeans. that it looks like the price of corn is such that a lot of farmers are going to go back and plant soybeans and we're seeing basically a historic planting survey coming out today that says farmers are in fact going to go out in the field, they are in fact going to

Starting point is 01:23:52 plant. But this is not true everywhere. We haven't done the calculus on it yet, but there is a ton of anecdotal support and a ton of survey data that's coming out showing that farmers aren't going to plant the acres that they normally would plant because cost is so high. That means there's going to be less production over the next year. That means famine hits us in a year. That's a big problem. Sax wants to know why they don't just use DoorDash or UberEats. He's to just order more food if they can get the wheat. This is not what's going through David's mind right now. David's mind is. David is honing and he's like LeBron in the fourth quarter. There's

Starting point is 01:24:23 you know. That's what's left. He's like everybodyBron in the fourth quarter. Yeah, there's, you know, that's like left. He's like, everybody get out of the way. Give me a little, I'm so ball. He's gonna do it myself. He's about to play. Clear out. Clear out. Here we go.

Starting point is 01:24:33 All right, here we go. So right as we got a fair and I was defending, hey, listen, you're, your mind reading Biden, he's never said regime change. You got to give him some credit here. You're, you're, you're taking madman, Putin's, you know, version of events over our own presidents. And then 12 hours later, I'm on the ski lift

Starting point is 01:24:54 and crazy grandpa decides to say, for God's sake, this man, referring to Putin, cannot remain in power. Of course, the White House walked us back, but go ahead and take your victory lap, SACS. Oh my God, am I getting an apology here from J-Cal2 on top of this? It's not an apology.

Starting point is 01:25:12 I, you know, I, I, I, the time I was right, but I, I, you said I was, it was, it was basically pro-Putin because of what I said. And now you're admitting that I was telling the truth. No, I admit that Biden, crazy grandpa said something he shouldn't have said. And that maybe that reflects truly how he feels. Right. That's called so in Washington, they call that a Kinsley Gaffer.

Starting point is 01:25:33 A Kinsley Gaffer. The New York Public Editor, Michael Kinsley, who said, a Gaffer in Washington is when a politician accidentally tells the truth. That's what Biden did. He accidentally told the truth about what the administration policy has been. Yes. And you know, you can see this in the fact that, look, who's playing peacemaker right now in these peace conversations? It's been Macron from France, it's been enough, Tully Bennett from Israel, it's been over to Juan from Turkey. It has not been anyone from the United States. We've been strangely absent. And to the extent we said anything about the peace process, it always seems to be us throwing cold water on it.

Starting point is 01:26:07 So there's been a lot of people, you know, prominent commentators like Neil Ferguson, who I quoted before and others who have speculated that the United States's goal here is not a rapid resolution to the conflict, but rather to protract it in order to make Russia bleed in order to destabilize and topple the Russian regime, I think it was actually quite, and the problem with that is, it's very dangerous. I mean, just look at what Friedberg just said about the food insecurity that's causing. It is very dangerous for us to portray this conflict so that, you know, famine could be worse, the war could spread, it could degenerate, we could get drawn into it somehow.

Starting point is 01:26:41 We want this thing to be over as quickly as possible. And I think it was actually the Biden Gaff net net was a very positive thing because they had to walk it back so quickly. And severely. And severely, that it basically, it showed the whole world and the media administration, no, we really need to end this quickly.

Starting point is 01:27:00 We can't be dragging this thing out. So I think by stating what their clandestine policy was so clearly, it forced them to have to disavow it. And the only people who have said at the end of the day were these like neo-cons, like, no, no, no, what Biden said is true. We should try and topple Putin. Yeah. Theoretically, he should go, but not right now. Right. Right. And that was actually very clarifying for US policy because regime change should not be our goal. I think the administration said something effective.

Starting point is 01:27:31 He was speaking as a man. That was a president. I mean, let's, I mean, let's, let's be honest about Biden. I mean, they, they don't know what he's gonna say next. I mean, he's, his, I mean, I don't mean to, you know, speak ill of anybody, but cognitively, this is a huge gap, it's a huge mistake. We're trying to resolve this thing, and then you give Putin exactly the ammunition he wants.

Starting point is 01:27:56 Oh, look, it's regime change, see? And I think what we may have here is two crazy grandpa's. One that wants to put the USR back together, and one that wants to be the person who asks Putin. Neither of those is what the world wants. It's a real bummer that we are kind of on the second stage here, just idling around, looking around

Starting point is 01:28:16 while these other countries are sort of creating a, you know, almost like this new world order around us. That's... It's a bum about. Yeah. We played our hands very, we played our hand very badly because we keep intervening in all these countries where there's no upside. I mean, I keep talking about it.

Starting point is 01:28:33 All of these wars where we spent trillions and we got nothing out of it. You're a peacenick. We like it. I'm just, I don't see pieces of you for real. I'm a realist. Beautiful. I do like peace better than war,

Starting point is 01:28:45 but I don't understand the point of going to war when there's no vital American interest. That's been jeopardized. Our security's not jeopardized, our economy's not jeopardized. In fact, us protecting the war is gonna jeopardize those things. So, I don't get what American policy is designed

Starting point is 01:29:00 to achieve or has been designed to achieve for the last 20 years. We've just been stumbling around the world, making all these like virtue signaling statements about values. And then meanwhile, we end up like bombing the hell out of these countries. Well, the Middle East was for clearly for oil and energy. Afghanistan. Let me in those were about oil. That was our vital. What were we doing? They're trying to build a new state, a new new sort of democracy in that state.

Starting point is 01:29:28 They were. It was revenge for not letting them. Yeah. So that was legitimate. That was a legitimate reason to go there, which was to get a song been loud. And that was the just cause. Yeah. But you know what?

Starting point is 01:29:39 And you know what? We should have gotten a Torah borne instead of outsourcing it to the locals. That was a total stirrup. Huge mistake. But once that job was done, we should have been out of there. Absolutely. Absolutely. What a what a misadventure. What do we have? Do you have any thoughts, axon, like the end game here because it does seem like Putin is getting exhausted and maybe he he gets the win. I know we know what the end game is going to it's going to be. It's basically Ukraine's going to be

Starting point is 01:30:05 neutral. They can't be part of NATO. They get some security guarantees from the Western exchange for that. Crimea is part of Russia. That's a fate of compley. It happened in 2014. And then the last part is what they're really fighting over, which is this Donbass region, where you've got Russian ethnic speakers going up against Ukrainian far right nationalist and they can can agree. Well, both of those sides are willing to fight. So that's the issue. And look, the truth of matter is,

Starting point is 01:30:31 I think it's going to result in some form of independence for these disputed territories of Donetsk and Luhansk, right? I mean, and, but the reality is, United States of America doesn't have a vital interest. We're 37 days into this. Is it going to end in under six days? It's actually suggested the right approach, I think, a month ago, which is let all of those people vote.

Starting point is 01:30:53 To have a plot of say, I have a referendum. Create a referendum, let them vote. Let them be self-deterministic. That may be the most reasonable middle ground for both sides to say, okay, let's give this a shot. But I know if you could achieve a ceasefire, if you could get a ceasefire here, okay. Force tear and this. Yeah, if you could get a ceasefire, have the UN observers come in and minister in election

Starting point is 01:31:19 Kermia, there's no doubt which way Kermia would go. I don't know what would happen in Luhon's scripted in that. So I think they probably would go independent. So let's just do a vote. It'll be about self-determination, not appeasement, and let's find out. That's what we should be pushing for. Yeah, people getting to vote on their future while crazy idea. I mean, it's got to end. I mean, it's got to end in months, too. This is becoming super damaging for Putin, right? I mean, these economic sanctions, philosophy, you see, there's a story that was on MSN. It's like a 37.

Starting point is 01:31:51 Do you really see it? Yeah, Putin's operating in Russia is 3%. So his approval rate has gone up. We thought, you could say it's fake, whatever, but apparently this is a reasonably decent polling operation. This is a poll by Lavada Center, an independent poll center in Moscow. Well, an independent pollster, Moscow. Apparently his polling, his poll numbers were 69% January. They've gone up. Look,

Starting point is 01:32:11 Russians will rally around the flag just like a resource. What about the resources? And they're suffering in that country. They are suffering, but the Russians are very good at suffering, Jake. Cal, that's their national pastime. You ever read Dostoyevsky? Yeah, no, not right. I don't like to read it. Warren P. So, again, no, I don't likes to read it. War and peace, or that was the thing. No, I don't actually, I would much rather watch the next Marvel movie or a Kurosawa film.

Starting point is 01:32:32 I am not interested in, yeah, the fresh. Listen, my whole speech was about the fact that a professional literacy could have prevented the situation last year. That's not to say that we caused it. It was Putin's decision to invade. It's his war. The bloodshed is on him.

Starting point is 01:32:45 However, a more effective diplomacy could have diffused the situation a year ago, and we totally blew it. We just totally blew it. And this is going to hurt us. I mean, look, this is one of those things that the administration thinks doesn't affect them. But you know what, when our economy goes into recession, because this is a straw that breaks its camel's back, voters are going to take it into consideration. You know, we do hire people in many, many industries to do their job, and the people that are hired to be diplomats, their job is to be diplomatic and to find compromises. All right, everybody. It's time to wrap here some exciting news on the conference of front, Palmer Lucky of

Starting point is 01:33:25 Andrew Technologies building weapons and systems and defense systems is going to come to the event. He's a fan of the pod apparently. He's a big fan of David Saxx's, so we're going to talk about the military and just as a general concept, I have a theme I was going to float by y'all think a lot of the talks and a lot of the the psychis is around the problem I want to solve. So I'd like you all to think about that. I think this will be a celebration of people who are trying to solve important problems in the world. So what are you solving for is going to be the I think the theme of the event. What are you trying to solve for? And so free break if you can give maybe a little talk, Chimoff, David, I would be great if the four besties gave a little

Starting point is 01:34:08 15 minutes solo talk. We're going to have a lot of these solo talks, position, hey, here's what I'm solving for. And then conversations about free bird. Do you know, Dahlio, you should get Dahlio? I think he'd be great. I don't know. And Kathy would be good. I think Kathy Woods coming to. But by the way, there's a new video that Dalia just put out, which is like the 45-minute animated documentary version of his book. Really good. I watched it.

Starting point is 01:34:29 I haven't watched it. I haven't. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it.

Starting point is 01:34:37 I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it.

Starting point is 01:34:45 I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't watched it. I haven't this week. I thought it was exciting. I remember the book. Yeah, I thought it was really good. I'm half way from listening to you guys coming around. You're going to listen to me like a bunch of watch it on YouTube because his animations are excellent. Yeah. It's super is very

Starting point is 01:34:58 accessible. I mean, incredibly, incredibly good. Highly recommend. Yeah. Look, I think we can be here. I agree. One of you guys get Dalio on the thing. Let'sly recommend. Yeah. I mean, look, I think we're here. I agree. One of you guys get Dalio on the thing. Let's get him. Yeah. Dalio, reach out. I know we know you're listening. So I think the question to ask Dalio is I think he is actually I think it's fan of the show. I think the question to ask Dalio is how do you revitalize a late-stage empire? That's right. That's a good. That is the question. Can it be done? No, can it be done? I think it's the real question. All in sum, it may be 15, 16, 17. I think it's too theoretical. I think it's more, how would you do it? Yeah. If it's possible, what would the path be?

Starting point is 01:35:35 It's got to be something about building the pie, not shrinking it. That's for sure. May 15, 16, 17, the conference is the 16th and the 17th. 625 of 700 tickets allocated. If you'd like to apply for a scholarship, go ahead and do that. It's not going to be a bro down the ratio has. Congrats to you, Jason, for really pushing the diversity and getting a lot of scholarships and women and people of color. It's good. Thank you for that. Yeah, really, really, really great to see so many people applying.

Starting point is 01:36:02 If you didn't get a response back for your application, you'll get it by April 15th. That's gonna be when we tell everybody they're officially in or out, but we have been increasing the ratio. It was organically 90, 95% male, female, and now it's 65, 35. So we're really making progress on that front. So it's not gonna be a bro down.

Starting point is 01:36:20 Sorry, Sacks. It's not gonna be a bro down. It's gonna be diversity here. Diversity equals power, Sacks. I hope there's diversity of ideas too. Sorry, sex. It's not gonna be a bro down. It's gonna be diversity here. Diversity equals power, sex. I hope there's diversity of ideas too. Yeah. Okay. Well, there you have it, folks. For the rainman, David Sacks, Sultan of science. Can't wait to see one, one third of my besties tonight. Thanks a lot, guys. Yeah. I'm showing up. I mean, you're the one over three. Well, I mean, these guys, you got to remember, you can, these guys would have, you can send drivers,

Starting point is 01:36:49 translator, with these guys would have to have their drivers. Nick, beat the name. Yeah, these guys would have to have their drivers drive them 30 minutes and then wait for them outside and then drive them home after they've drank in $5,000 worth of your wine. It's a little bit overbearing. What are you going to port tonight, Mark? Drinking five thousand dollars worth of your wine. It's a little bit overbearing. What are you gonna pour tonight, Mark?

Starting point is 01:37:07 Uh, it'll be some really good stuff Uh, probably some like older sassakai. I'm thinking eighty-fives. Oh, but free bird um, if you come I can also make some 10 pay 10 pay To pay me the best 10 pay and you're out there. It's good for gravity only you've ever had You it's good for the family. It's good for the planet, it's good for the animal. What is tempeh? It's soybean for menthol soy beans. It's delicious. You know what, can I tell you what I think it, yuck!

Starting point is 01:37:32 Ugh, yuck. Yuck. In fairness, your chef always makes something exceptional for freeberg when he comes to dinner. So it's always, you're always a generous host and your chef is always exceptional. So get your get sacks is driver and come down come to send the help send the heli up the marina grab me Preberger's come come come just get a driver sacks when do you land?

Starting point is 01:37:58 Late late tonight. I'm good on tilt. Come on tilt. No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no And it said we open-source it to the fans and they've just gone crazy with it. I'm the US, I'm the queen of King Wild! I'm going on a leash! What? What? What? What? Besties are gone!

Starting point is 01:38:34 Go dirty! That's my dog, take it away, I'm gonna show you a driveway. Sit next to me! Oh man, my ham is the actual meaty apple. So we should all just get a room and just have one big huge or two because they're all just like this like sexual tension that we just need to release some time. What your beef, what your beef? Beef, beef, what? We need to get mercy.

Starting point is 01:38:59 I'm doing all this! I'm doing all it I'm doing all it

All-In with Chamath, Jason, Sacks & Friedberg - E74: Market update, inverted yield curve, immigration, new SPAC rules, $FB smears TikTok and more

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