This Week in Startups - All-In E7: California’s collapse, how SPACs are opening the markets for growth stocks & more

Episode Date: September 9, 2020

Follow the crew: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://bio.fm/theallinpod

Hey, everybody, welcome back to the All In podcast, Besties have reunited. It's been a bestie summer. Chimoth, how are you doing? You're back in America, yes? I'm back in America. Back in America. Feels great. Good summer, yes. I had an incredible summer. I had seven weeks in Italy. It was really incredible. What is the vibe in Italy post-pandemic? Obviously, they had the roughest of any nation, I think, except for China and Wuhan with COVID-19. How is the summer? How is the summer? There's no, it was incredible because they're,

I mean, they're so resilient. They basically decided that they don't ever want to go through it again. So everybody wore a mask and people socially distanced. There's lots of dinners outside. No restaurants were really seating people indoors.

You'd walk into a store and you'd have to put some, you know, puro on your hands and wear a mask. And there was like, you know, 40, 50 cases a day. And then I keep looking at the news when I was there of 60,000 a day.

I was, it was just really, it was sad. And then on top of that to see the riots, the fires, I mean, there's a, you know. It's been a disturbing summer here. How are you doing, David Sacks? You're back in San Francisco and you got to spend a little bit of time in an undisclosed location, as we know from the last couple episodes of the podcast. How is San Francisco right now? How has your besty summer been? It's been great. Yeah, I was, I guess I can now disclose that my, And the disposal location was Mexico, specifically Cabo. And that was it was a great place to be for a couple of months. Nobody cares.

Yeah, exactly. But actually, it was great, it was a great place to be in the early stages of the pandemic because everyone was wearing masks. You know, they did take it really seriously. And there were very few cases and seemed like it was under control, at least in the area I was. And then, you know, we came back to San Francisco for school. for the kids' school, which, you know, I'm not sure we have to be here, but that's, that's, you know, that's what we came back for. Is the kids school actually open? Are they going to school or they keep pushing it out two weeks like my kids are? Yeah, it's, we don't, they're not going in person yet, but I think they keep trying to figure out when they're going to be able to start doing that.

So it's all Zoom based right now. Yeah, which means no learning, right? I mean, do you think these kids are actually learning on Zoom or do you think it's just glorified a baby-sing? A little bit. I mean, a little bit. I think it's, it's difficult. Yeah, we gave up on it. And Freedberg, are you there? I'm here. Bay Area. How's your besty summer been during this crazy time? I've been in the Bay Area. I've been crossing all seven layers of Dante's Inferno here in California,

moving from the outer layer of COVID to the middle layer of California's proposed wealth tax, to the inner layers of extreme heat, smoke, And the absolute central layer of pain more recently, my three-year-old daughter decided 34 nights ago to not sleep anymore. So, yeah, we've been living the life. It's been glorious. And, you know, I wear a mask now for COVID. And then I wear another mask on top of that mask for the smoke. So we're just living in the California dream.

What my parents immigrated here for, you know, paradise. Well, I guess that's a good place to start. And just if anybody cares, I spent 10 days in the mouth. do and had a great time. I guess nobody cares. Can't be how my besty summer was. Jason, how's your besty summer? Jaycal how's your besty summer? You know, I've been lonely and I tweeted I'm lonely, and I got about 50 phone calls from

people who are like, I can't imagine J-Cal being sad, but I actually had a talk with my wife and I said, what are the symptoms of depression? Because I think I might have depression and I went through it. And I was like, I don't have depression. I'm just, I have great empathy. for all the people suffering. And, you know, just being isolated, you guys know me very well, better than anybody, like I like to talk to people.

And it's been really difficult for me to, I'll be totally candid, to be isolated like this. And the podcast is great and doing this podcast is great. But, man, I miss people. I just miss people. What are the symptoms of your depression? Just before you were self-diagnosing, I'm just curious. I was feeling like, just sad about watching the,

riots and watch people shoot each other and then watching, you know, the, the wildfires, watching people die unnecessarily, and then watching the madness for the election. It was just all becoming like, I wouldn't say overwhelming, but it just made me very sad that, you know, so many people can't go back to work. And then the stock market's ripping. And it's a very, I don't know how you guys feel, but it feels very surreal, right? Because in our world, and I don't know how your portfolios and investments are doing, a lot of the companies we've invested in as angel investors are doing just wonderfully and we're

investing more than ever. But then you turn on the television. It's like the doom scrolling is crazy. So I had to just stop doom scrolling. I think that was the key thing, Chumath, was just looking at Twitter is that the trending topics is so depressing and just so overwhelming at times that I took three days off this weekend and went camping and I literally didn't pull up Twitter and I felt much better. So I think it's really Twitter related.

like just opening up the trending topics. I don't know if you did that on your holiday in Italy, but it really is a quick way to get depressed. The best thing is that I was using it in a different time zone, and so I was basically out of the flow. And it makes a huge difference because then you're not in the emotional turmoil of people's immediate reaction.

And so you can just kind of move on. And then also I just had a really fun. summer because I really tried to detach and not use my phone. I had, you know, I kept my meetings to a few hours a day and then otherwise I was doing things. Yeah. You want to know, you want to know my phone call to J-Cal? Yeah. Hey, Jaycal, I saw on Twitter that you're, you're sad and lonely. It's like, yeah, yeah. It's like, are you suicidal? It's like, no. Okay, goodbye. I'm too much of a narcissist. I never consider that. But I do, I do want to thank you. David for having me down to Cabo and we got to have some good times. You watched some good movies.

Gladiator extended cut was great. Some other movies that we watched could get us canceled so we won't admit that we watched History of the World or any other Mel Brooks movies, but we had a good time. I played a couple rounds of golf and that was good times. But let's talk about California because I think, you know, we're all residents currently of California. But let me just put it out there. How many people on the call are considering leaving California? Anybody, is that going through anybody's mind right now? Because it's going through mine. No.

Well, it's not for me. But I think that California is sort of emblematic of what could happen if you actually have, you know, the legislative bodies plus, you know, the top sort of political leader up and down on one ticket. I mean, you know, you basically have like massive rife in competition. And it's been compounded. You never, I mean, you know, people who are Democrats would have said, oh, the best thing that can happen for Democrats is if you have, you know, local cities plus an assembly, plus the state Senate, plus the governor as a Democrat. Republicans would have said the same thing for Republicans.

But as it turns out, it basically creates the worst outcomes. And so instead, what you need is a little diversity of ideas and a little push and pull. but California is like a bunch of clowns in a clown car right now. It's a joke. But I'm not going to move. Now, part of one not going to move is I, you know, my taxes I've set up in such a way where California can't get access to most of my assets anyway. So, you know, they can pound cent.

Yeah, David, how are you, Sax, how are you feeling about California right now? and just the craziness in San Francisco, the homelessness problem in San Francisco has become acute during this. It's really getting crazy. And then the wealth task on top of it. It's a disaster. It's a disaster. I mean, I'm not leaving or anything,

but it's certainly a topic of conversation that's come up a lot. And I do know people who have left. I know a couple of people who, you know, prominent people in the venture community who've recently moved to Austin. and it's a horrible time for the city and state to be proposing all these new taxes. Just take one example, because people were already realizing that because of COVID and this new sort of work from home and Zoom business culture, where you can kind of work from anywhere, that people are realizing they don't need to be in San Francisco or in Silicon Valley more to be in the technology industry. And so at precisely the time that people were re-evaluating where they wanted to be, realizing that they could be anywhere, California is now proposing to massively increase the cost of being here.

So it's horrible timing. And then, you know, you do have this sort of seemingly chronic issue in San Francisco, particularly with the sort of homeless problem. It just seems to keep getting worse. and there's there's sort of this weird hostility to technology and tech workers here that I think is somehow used a scapegoat to prevent the city from dealing with its real problems. And what do you perceive those real problems to be in the city? I mean, you use the term homeless. I think most people looking at the problem, as one person candidly told me, you know,

what we have is not, and I wouldn't say who said this, but it's a prominent person. They said this, you know, Jason, the issue here is, this isn't a homeless problem. This is a junkie problem. And they use specifically that I'm using that term because that's the term to refer to people who are addicted to opioids, methamphetamine, fentanyl, and that if you were to actually unpack what we're calling a homeless crisis, it's actually a crisis of drug addiction and specifically fentanyl. And I don't know if you guys saw, we're going to hit something like 500 overdose deaths this year. We're like going to double last year. And it's all fentanyl, which is a particularly, you know, deadly drug. So, I mean,

how much you think that is the problem? David. Huge. I mean, it's, it's, it's, you're right that homelessness is not the, the, the, the, the, the, the, the, the, the consequence of long-term drug addiction and mental illness. I mean, this is the, it's the end state. And, uh, you're right. The city is, it's not really tackling the underlying issues. In fact, it's kind of eating and abetting them. I mean, how many millions of needles does the city give away every year and that it only collects a small fraction of them with the remainder ending up on the streets. It's just it's it's it's bonkers.

And I think part of the problem is that we keep saying that until we is that we is that we can't demand any, uh, improvement in the situation in terms of homeless people. You know, we have this like poop squad in in San Francisco that's literally cleaning poop off the sidewalks because, um, homeless people are using our sidewalks as, as like a latrine, basically as a bathroom. And what you keep hearing is that, well, we can't do anything about that problem until we solve the homeless problem. And that's a, and certainly we should try to solve that problem, but it's a very long-term, you know, difficult and tractable problem. In the meantime, we can certainly do things like demand that homeless people not do that. Yeah. And the policing

seem to, there seems to be a distinct issue with policing right now. I watched the San Francisco So tenderloin Twitter account, David Freeberg. And they have arrested something like 260 meth and fentanyl dealers. But we have a DA, Chesa, I believe his name is, who doesn't believe in prosecuting any of those crimes related to drugs or petty crime. Freeberg, what is the city turned into for you as somebody who's been a long-term investor in the Bay Area? Well, I moved here after I graduated college in 2001. And I loved San Francisco. It was a quieter city and a quaintor city.

I honestly, over the years have found the traffic and the congestion and the buildup of the city to be frustrating. I'm a little bit of an anomaly in this sense because I think a lot of people, you know, think that the city should continue to grow and progress and build housing and so on. Those are all, you know, fine objectives. But I think the quality of life has degraded for some time in the city. As infrastructure hasn't kept up with the changing pace of, companies growing here. And as a result, we've kind of got this ballooning, inflating budget that's been poorly managed. You've got, I forgot the statistic, but there's some number of thousand people

plus that are city government employees in San Francisco earning over $300,000 a year. And so there's a, there's a chronic kind of bureaucratic issue that is the cancer that has caused, you know, a lot of the follow-on crises that I think we're now experiencing acutely here in the city. Now, in terms of leaving to your earlier question, I, you know, I was really like, I've just been like everyone, you know, like I call, kind of talk about the Dante inferno layers. It's also like for me growing up, it's like a seven layer of burrito. It's like one layer of shit after another. Start with the beams. And in the middle, you got the sour cream.

And, you know, this city's just gotten kind of, and the state has gotten more and more difficult to live in. And I was certainly thinking and talking to my wife, like, we got to leave. her families here, so we're not going to leave the state. But then I did a call last week that about, I think, 18 of us were on with Governor Newsom. And, you know, he made a couple of really interesting points that really did honestly reset my perspective. You know, I've tried to take a step back and think a little bit more broadly about the long-term opportunity in California. The way this state operates right now, it's a fifth largest economy in the world. They ran a surplus. They're refinanced their debt. They've done a great job kind of managing kind of the fiscal gap. That's

that's being created by the COVID crisis. And, you know, Governor Newsom made a point. Like, we have had the California Exodus story that's percolated and cycled, really, for decades. He pointed out an article, which I've not been able to find, but I've been looking forward from Time Magazine from 1959 that were, like, declared this is the year. Everyone's going to exodus out of the state. And we hear it every couple of years, there's some crisis that precipitates the mass exodus. And it hasn't happened because it is a great place to work.

It's a diversified industrial base. just tech. Tech is a lot of the growth, but there's a lot of industry here, largest ag producer, largest, large military aerospace industry, and on and on and on. This is a, it's a great diversified economy. It's a great diversified cultural base. It's by the oceans. It's by the mountains. It's an incredible place to live and work. And I don't think any of us want to give that up. And the media has done a great job kind of magnifying these small stories that aren't really a story. Governor and Yusse made the case that this wealth tax proposal, you know, was one assembly member. It didn't even get into committee. It wasn't even really being considered, but it kind of

created this press flourish and everyone got involved and everyone I know kind of freaked out about it. And it became this kind of another catalyzing event, but it wasn't really real. So if we kind of broaden our perspective a little bit, both in terms of space and time, I think we get a little more kind of comfortable with like, of all the places to live and all the places to work, this is the best. and you can go save some taxes and move to Austin, but I mean, then you've got to go live in Austin, you know, whatever. Well, it's the best, it's the best.

You're right that it's the best in terms of climate, geography, natural beauty resources, and the industries that have developed here and have, you know, strong network effects, but it's not the best politically. I mean, it's among the worst politically. And it seems like the politicians are doing everything they can to mess it up. I mean, I almost wonder if there's like a resource

curse issue, particularly with San Francisco where, you know, there's this thing in, and I mean, this observable thing with governments that, that sometimes you get a resource curse where if there's like a lot of oil in the country or something, you end up with a government that's not very good because people just spend all their time going to war to try and capture it. And I kind of wonder if, you know, San Francisco has been the beneficiary of being proximate to Silicon Valley, this enormous like wealth creation, prosperity, job creation, ecosystem that it had nothing to do with creating. I would say two things to build on what you're saying.

The first is I think that when the economies in an environment are really, really good, all the really, really smart people want to go into those economies and that leaves generally dumber people to do things like politics. And that's less true in places that have shittier economies. And I actually think, that that's practically true. We may not want to think it and it may not, may sound a little harsh, but it's true. And, you know, the way that you reverse it is what Singapore does, which is you make the civil servants, the highest paid people in the economy, right? And you treat them like knowledge

workers and you say, wow, look, I'm going to pay these person $250,000, $300,000 a year. You're shocked at the quality of the person you get. That's the first comment I want to make. The second one, though, is that unlike all these other times where I think people have been, you know, sort of, prognosticating the doom and gloom of California. The thing that's different now is that because it is such a dominant political environment for the Democrats, it's much easier to judge if they actually know what they're doing. And if they are going to do things that are aligned with the sort of like the moral code of the party that elected them.

And so like let's just talk, for example, about the fact that we are not going to have police reform of any kind in California, which is where you'd think would be the first state where people got their act together and said, okay, if we really believe that we need to reform police, we can do it in our own backyards, but that legislation is going to get blocked because Californians have decided that they care more about the alignment to police unions than they do to the right of law and to social justice for minorities and blacks. That's crazy. We should be the most progressive is your point on this, Chimov. And the point is to say it explicitly is the politicians are in the pocket of the unions. And because they're in the pocket of the police

unions and the education unions, we cannot make forward progress even though we're supposed to be the most liberal of all locations. Correct? That's in summary. Yeah, exactly. We actually, if we believe that we have up and down the ticket, the ability to implement justice, right? At least justice in the vein of the Democratic Party and what that platform represents. Or, for example, all of the people that were out protesting, okay, during Black Lives Matter, during that entire movement, I suspect the overwhelming majority are Democrats slash progressives. Or, you know, let's just say the majority, or at a minimum of plurality, okay? But then the idea that then you have a state, the most populous and the richest,

filled up and down the ticket with people who are theoretically aligned with those political values. But then when push comes to shove and the legislation hits the floor, it basically gets mothballed. To me is inexcusable and disgusting. Yeah. I mean, look at the housing issue. We just had a bill that was an incredibly simple bill. I think it was 11. Yeah, SB 11. 20.

I don't know if you followed this one, but I've been following it on the Twitter. And it was a very simple piece of legislation. Any single family home lot could have a duplex on it. So you could have two homes on a single lot. And they couldn't even pass that in a city where, you know, a firefighter, a teacher, et cetera, cannot live within 90 minutes of where they work. And they couldn't even pass that. Well, also there's there's also AB5, right?

I mean, Jason has Uber's third or fourth investor. I'm sure you got something to say about that, right? Well, they tell me, third or fourth, but I think third or fourth. But here we go to the VC Braggs controversy. Can we just, yeah, can we just pin down exactly which one it is so you could just say you're the fourth investor or something like that? It's so much better to say third or fourth. And that was my step, obviously. But you know, AB5 is another one.

Look at all the careers in which you can be, David Sachs, a freelancer. And the high, the more money you make, the more you get to dictate your schedule. But if you are poor and if you are in an entry level job, the California government will not let you, even though 70% of drivers for these services want to be freelancers, and the services themselves said they will put into a fund for healthcare. Like they literally Uber, you know, Dara's like, hey,

we're going to put money into this. Lyft is going to put money into it. They still will not let people decide for themselves what shift they want. That's right. It makes no sense. I mean, and, and it trickled into like journalists too.

I mean, they said now journalists, if you write, if you write 30 articles a year for a single outlet, you're technically considered an employee, even though you're writing the articles on your own time with your own research and you're getting paid for successful, for good articles that are accepted.

And then there was this follow-on controversy about translators. It's like, well, translators takes five minutes to translate an article. So why would 30 articles apply to a translator? And obviously, when you have that degree of confusion and complexity, something's off, right? Yeah. Yeah. It feels like virtue signaling, yeah.

Yeah. Well, I think, well, I mean, the reason why AB5 happened is, it was at the behest of the Teamsters, right? They're trying to unionize the Uber and lift drivers and they can't do it unless they're employees. And so, you know, the author of the bill, Lorina Gonzalez, who's sort of in their back pocket, you know, that's why she put forward the bill. And then the absurdity of it was that, you know, they realized after introducing it that it would ensnare all these other occupations like the writers and journalists and photographers and translators. Yeah, even like people like, people like,

like manicurists and so on. Right. And so what they've been doing is they've been now modifying the legislation to exclude all of these categories. And in the process, they're kind of laying bare what's really happening here, which is this is all about either basically shutting down or forcing Uber and Lyft to comply with the will of the teamsters. And it seems like the legislation blinked when Uber and Lyft said, well, we'll just shut the

service down. So what were your thoughts on when that happened, Sachs? you, what do you think will happen? Who will win this AB5 showdown? Well, they threatened to basically stop service and they got to stay, I think, from a judge. Yes. So AB5 doesn't go into effect until November when,

and there's a ballot initiative that they're sponsoring to get AB5 overturned. So I think, you know, I don't, it's hard to predict whether it's going to win or not, but that to me is like, whether if AB5 were defeated by a ballot initiative in the November, that would be a really positive sign for the state of California. I'll say there was, on this call with Governor Newsom last week, he did point out that AB5 was more of kind of a law of inevitability as a result of that whole Dynamics state Supreme Court decision where the, you know, the Supreme Court basically said, look, here's the criteria that defines an employee versus an independent contractor. You know, they get to decide what work they do or what hours or whatever. And there's

like some set of criteria. And they said, look, Uber drivers and all these other kind of technically independent contractors don't meet those criteria fully. Therefore, they are employees. And as a result, California Assembly tried to and had to effectively codify what it means to be an employee versus an independent contractor. And I'm not arguing for the case. I'm just saying what was conveyed by a governor last week on why this ended up coming to

bear. Now, if they strike it down, there's going to be some other law that's going to pop up because of the state Supreme, the Dynamax decision. and that's kind of, you know, something's going to have to get written down. So, Sacks, don't you think it ultimately ends up just being some sort of negotiated point between all of these industry leaders and, you know, the state to kind of figure out, okay, what's everyone going to compromise on to get something written down that's law? I mean, possibly. I mean, Dynamics is not like constitutional. It's not a constitutional decision.

So the legislature can do whatever it wants here, you know. And so if you were going to respond to Dynamics, you don't have to kind of enshrine it. And I guess there was certainly some question whether Dynamics would apply to Uber and Lyft in this way. They could have made their arguments in front of a court, right? Okay, look, the problem is now, and whatever applies to California applies to every state legislature, how are these people supposed to figure this out? I'm sorry, but like, you know, who are we entrusting here to go and then all of a sudden understand the nuances of Lyft and Uber and really understand the job that they do

versus the translators versus the this person versus the VAT person versus the Dynamx decision. Again, I think 20 years ago, I kind of would have believed that politicians were generally some of the smartest people, you know, frankly amongst us. And it really did attract a certain level of intellectual person who cared about legislating. But, you know, now basically you just have like, you know, Jerry Falwell Jr.'s running around. I mean, these are, they're all just running around until they get caught on Instagram and get fired. I mean, they're just, they're not the smartest people that we're dealing with. And so what was, what was Gavin Newsom's answer to that is really what I would.

You know, the Jerry Fallwall Jr. point didn't come up too much, but we can follow up, I'm sure. It does seem to me that if they do become full. time, this would be a tragedy for the people who are trying to just do 10 to 20 to 30 hours of gig work. Like what happens to those poor people who wanted to fill in between when they dropped their kids off of school and picked them up and just grab a couple hours here or there as a second gig? Like, if this actually does pass in their full time.

Honestly, guys. Honestly, you guys are such. You're, you're honestly, look, it won't affect them. It'll affect the long-term profitability and the margins of the companies that have to hire them as full-time employees and they'll have to like, you know, make a bunch of rules and blah, blah, blah, but it has huge operational implications and it has really terrible OPEX implications for a company. But for the person that wants to work 10 hours, Jason, they'll still be able to work 10 hours. So I think I think the point is that like on a specific shift, like they're going to have to come in at a certain shift time. I think the entire public markets who all of a sudden think that a business looks one way, have to be a specific shift. to figure out that it's really a cost plus business.

And what it really means is if you were comfortable with a 60% or 70% reduction in the market cap of some of these companies, you'd be okay with AB5. And I think that's where the tension is, where the people that made the law don't care about the market cap because they don't own the stock anyways. And the people that are reacting to AB5 are the ones that own the stock and are really thinking about the market cap. Well, but the drivers, the drivers don't honestly own the stock and they're against it. The driver's own eight shares, David.

I mean, come on. No, no, no, no, that's what I'm saying. Is there not shareholders for the most part? But this really does reduce their flexibility to contract for their labor. No, but I think what you're saying will happen, which is that they will create a, you know, AB5 prime, which is a modification that's neither this nor what it was. But it seems that the tailwinds are pretty clear, which is that we're moving to a place where these companies, have to get built in a very clever way,

and even if they are super clever in capturing consumer demand, the unit economics are going to be pretty shitty. And I just think we have to own that. And probably what it means more than anything else is it's not a real venture kind of business, and so you may be deficit financing it or building it in a very different way than we used to.

Right, but it doesn't have to be that way. What you're saying is, I think, that this law will have very adverse consequences for their business. Okay. I mean, I grant you that. But it's why is the state interfering in the relationship between Uber and its drivers in this way when everyone's happy with it? No, but it's not.

I think what actually is happening is the state is effectively capturing the excess return of Uber and Lyft. Meaning, I think if you just take a pure, unemotional economic view at this, it's like any other market. If there is a huge amount of margin available and there are not many competitors, what happens is somebody comes in to take the excess margin. And you think that's the government it wants to take it and that unions want to take it. Absolutely. Yeah. Absolutely.

So the question is should we let them then dictate what hours people work? The thought exercise that I would ask, guys, if there was in a market 90 different competitors for transportation, would AB5 have been written, past, adopted? And my answer to you would be that it would not have been. So Uber and Lyfts and DoorDash's success is what leads. to people wanting to get a cut and get a slice. The oligopolis model of success where not enough other companies are pulled through.

Got it. Well, that gives us a good segue into... By the way, sorry, last point on this. And the funny thing is the people who created the problem are the ones that hated the most, which are the investors, because they pile in the incremental dollars into the winners, trying to king make a winner through capital. And now what's happening is their rate of returns are basically getting taken away. And I think that in a weird way, that's also kind of fair.

well i i would just disagree slightly in the sense that just because this has big distributional consequences like basically who who makes the surplus doesn't mean it also doesn't have a huge deadweight loss associated with it and whenever you prohibit people from engaging in the type of economic contracts relationship that they want to engage in you're reducing um surplus and so i so i hear what you're saying but and i and i i And I think there is, I think this is all about regulatory capture, right? This is the Teamsters trying to capture a big piece of the value of Uber through their politicians in the legislature. So you're right about that.

But I also think that we should care about it, not just as Uber shareholders, but as consumers of the product, because it's going to get worse. Well, and also the product's going to go away in certain jurisdictions. I mean, if Freeberg wants to get an Uber north of the Golden Gate Bridge or in the East Bay somewhere, they're just not going to have. the economics in some communities to even operate the service. So just like Uber Eats and Postmates stopped delivering to Treasure Island, a lot of the drivers were in their local communities at home with Uber turned on, or a door dash, and when they got a call, they would leave their house. And that was part of the magic of it is you can just be sitting there, you know, Netflixing or hanging out with your kids and then a good call comes in and then you leave your house. That's why

you would have that like one minute pause if you ever saw it, you know, in an Uber ride where it's like, why isn't the car moving? It's because that person's at home. And they were capturing the one ride every hour in their local, you know, suburban area. But if you force them to be hourly, we were going to say, you know what, it's not worth having an eight-hour shift in, you know, whatever suburb. And the service will go away. And then guess who's going to not have service and transportation? I think free. I think, I was saying it was like Sachs's point, like, you know, from a consumer perspective or Chimov's point, if you end up with 90 of these service providers and I'm a consumer, I'm less likely.

to order a cab or order a ride share service or I'm less likely to order food for delivery. I don't want to deal with 50 fucking apps. I don't want to have to like go find the one app that has the contract with the one restaurant. Then the natural market dynamics, the way that the market naturally evolves is I want simplicity as a consumer. I want efficiency. That's what makes me want to use it more. And when you take that away because you're interfering from a regulatory perspective and

how that market operates, the product sucks for me. And the shareholders ultimately suffer. I think to your point, the way that that would probably get solved is you have people that are higher order in the consumer behavior that own these relationships that enforce basically a user experience. For example, Facebook and Google and Apple essentially say, we're abstracting all these services because there's 90 of you. Google says, I'm going to put all of you guys on the map view. Yelp says the same thing. And essentially what happens is there's some like open way. where essentially a service provider can turn themselves on and broadcast into a network that says

I'm available to do A for B and it all gets fixed. Now, that's a future state. Which was the original idea of Uber, by the way, was to make a marketplace like that. And now Uber's talking about doing a franchise. Exactly what you're saying, Jamath, is let some franchisee take the East Bay and then provide their inventory to the Uber network. I think franchising is a really, really smart business idea. and I think that particularly in transportation

and a lot of these services that have this natural dynamic to be local where there are an infinite sum of many local markets, I think it's like a Burger King. It's like a McDonald's. And the company that moves to a franchising model and then figures it out, I think will be a huge winner. And that will be a very asset light,

really operationally sophisticated, very well-run, highly profitable business, I think. Let's talk about the public markets. Wait, Jason, can we just talk about the police brutality thing in California? I just want to get your guys' take. It really bothers me that California, like, I bet you there's going to be states that are diverse in its democratic and Republican composition and some Republican states that passed comprehensive police reform, and California will be more.

one of the lagers. What do you think if you could wave a magic wand, chamoff, what are the one, two, and three things? Take a minute to think it through, and everybody in the call can. What are the one, two, and three things you would do to change policing in the United States? I have my own list, but I'm curious what you guys think. And I actually put a tweet storm out about my number one thing. What are the specific tactical things?

Let's get tactical first. I mean, the first one that I've always been a big fan of, as I've studied it, at least from 10,000 feet, is ending qualified immunity. Explain why and what that is. You know, qualified immunity is essentially that there is this immunity that certain individuals have and that they, that they're not subject to prosecution. And so, you know, they essentially have a carte blanche to behave in ways that can be good in some cases, very, very bad in other cases, gray in other cases, yet there's no adjudication of their behavior. And so you have to allow people with solid, dispassionate, detached judgment. to be able to enter and say,

hey, listen, you were way out of line here, and there are consequences for it. And people coming in, doing those jobs, need to understand those consequences, versus you have a carte blanche to basically do whatever you want. And I think that-

Let's talk specifically about the shooting involving, I would say murder right now, because I think all the facts are not in. But Jacob Blake was shot in the back. He was obviously not listening to the police. The police then followed him to his car. There's a discussion of if there was a knife on the floorboard. And point blank, they shot him in the back multiple times.

And I've heard both sides of this. You know, this person is not listening to the police. This person is going into the car. They're reaching potentially for a weapon. And the cops had no choice. It seemed to me that, you know, the training of a police officer might actually be that that was a legitimate shooting. But that means maybe they have to rethink policing because you could have easily taken that person down with even the most modest.

of a chokehold or a tackle. And when we see that, it feels like that's the raw shock test right there of like how you look at shootings in police. When you saw that shooting, I take it, Chimoff of Jacob Blake. And I saw it and I just like, I can't see these anymore. They send me off the rails for days. But yeah, I did see it. Yeah.

And so, I mean, when you look at something like that, that's clearly training has to change because I believe that based on police training and qualified immunity, this is going to be considered, even though it's shocking to see it. I think it's going to be considered, you know, an allowed shooting or there's not going to, the person's not going to be prosecuted because the person was clearly not listening and there was a knife on the floor and he was going for it.

And, you know, it seems to me like we really need to change the actual training. The average is six months of training. So I think that's one of the top things that has to change is that these police office have to be trained not to fire first, but to use other tactics. So for me, the first one is that. The second one for me, which I'm a really big fan of, is that there needs to be a new way to actually intercept 911 calls.

And instead of deploying police officers, we have a separate branch of people that we, you know, massively pay and train that are effectively, you know, social workers plus plus. Negotiators, yeah. And they should be deployed in all kinds of situations. where I think that what people want is a de-escalation. And I think that sometimes the words de-escalation

and police don't really sync up. And in a lot of people's minds, they think of escalation. So people who are trained to de-escalate, I think. And so, for example, like, you know, all of the mental health checks, all of the mental health issues could probably be dealt with folks like this. domestic disturbances would probably go into that category.

The third one is I would very much rationalize drug use, just because I think the amount of low-level offenses and arrests around drug use is antiquated for people's general views on drugs. And I think that it needs to sort of correlate to how society views it. And then, you know, the last two that I would give you is that there's a concept of no-knock warrants. That's how Brianna Taylor was killed. Insane.

insane. It's kind of really scary the idea that we could all be sitting in our houses right now as we are. And literally the police can just charge in is a little scary. I mean, totally unnecessarily. I mean, she was being for some like low level drug idea, they're going to knock the doors in. And of course a person is going to try to protect themselves. That's the Dermude House. Sacks, what are your thoughts on? They knocked. They knocked the doors in and they were playing clothes wearing police officers. So people are coming. And they did it at like midnight when she was asleep. So, yeah, people busting into her house at midnight, screaming, making noise, and not dressed as cops. That's a crazy situation. Yeah. And then the last one I would give you is militarization of police. A lot of these ideas, by the way, are Justin Amosch's ideas. I've retweeted and I followed, but he was the one that put me onto these things. But, you know, like you have all this excess military equipment in the army that gets basically passed through and now directly sold into police departments.

Yeah, especially post 9-11. We basically militarized them. So those are my ideas. What are your ideas around policing and how we should change it? You've heard, Chimauds. I don't have more detailed ideas than Chimoth. I think he's given some good ones for sure. I mean, I think we definitely need better training and I think better oversight over the use of force.

The body cam idea, Jason Seen, you tweet about, I think that's pretty interesting too. I think you're right. I'll just explain that for a minute. The body cam idea I had was I asked, does anybody know, and does Black Live Matter or another organization track which police departments, because we can get a list of every police department that exists in some database somewhere, do we actually know what percentage actually have body cams and what model they use and what percentage are working? Because one of the things that I think has happened this year is, you know, the live streaming and the live video and the number

of smartphones out there has resulted in us being able to see what black and brown people have been telling us for decades, which is they're murdered by cops. And now we get to see it. And And, you know, when you see George Floyd get murdered, it's fairly obvious that that's what happened. We don't have a video. Or they have the video of Rihanna Taylor getting murdered. So that's from a cop webcam. I'm sorry, body cam. So I was thinking we should just start with that as a basic, which is every single cop car car car car car.

It should be a federal mandate. And I don't exactly know how federal mandates were at SACs. But don't you think there should be a federal mandate for just cameras and car cameras? I think it's a good idea. I think the use of cameras is a good idea. I mean, maybe not recording the police officers when they're sitting in their car. But every time there's like a call. Yeah, they pull somebody over sort of, you know, like Fourth Amendment type search and seizure type situation.

Yeah, I think it would make sense to have that on video. Why not? Yeah, I mean, you've got to think every police will behave better. Go ahead, Freeberg. There was a case the other day, a young guy, I think it was 19 years old, was shot in D.C., named Dion K. I don't know if any of you guys watch the body camp footage. And so he was a 19-year-old black man. He was shot and died.

But in the body-cam footage, you can see that he pulls out this gun and throws it. And when he pulls out the gun and flings his hand around, he's got the gun in his hand. That's when the cop shot him. And so there was about 100 protesters that showed up, but it's largely become a non-story as a result of the facts associated with the body-cam footage. But I just want to propose something else that's a little bit more radical. maybe my libertarian ideals kind of cross with my socialist ideals and forming this this concept. But perhaps, you're a socialist?

No, I've never been accused of that. But if we trace back, you know, these systems are really chaotic. Everything you're talking about is layers and layers of bureaucracy and ideas and shit we should do to manage the problem. But there is kind of one common, you know, butterfly effect, butterflies at the source of all of a lot of what we're talking about, which is guns. If there weren't any guns in the United States, I would not feel threatened as a police officer. I would never have any reason to feel threatened, and I would never have any reason to pull a gun. The reason I always make to pull a gun as a police officer is my life is threatened. And in the absence of firearms, I have no right to pull a gun. And that's the

case in like the UK, for example, where there are like no police officer shootings of civilians because they're never under threat of being killed by a gun. So there's a simple answer. which is get rid of the guns, but a little too controversial and obviously many layers to that argument, especially from kind of both sides. But I would say, you know, much of what's going to go on now and in the future is just chaos theory. It's going to be building more layers of complexity. It's more entropy. It's more kind of associated complexity to try and resolve the underlying problem of all of this,

which is that we've got guns on the streets. We've got guns in people's hands. And therefore, you know, there's always this threat. against every individual that their life might be taken by another. Well, let me make a prediction right now. There's not going to be any new gun control legislation for a generation because of the looting and riding that's going on. Gun sales are at an all-time high.

I mean, every single gun store that you can't get guns. You can't get ammo. And there are more first-time gun buyers in the United States in the last several months than there's ever been. I mean, the ranks of the NRA must just be swelling right now. And so this idea that you're going to get gun reform, I don't think it's going to happen. People aren't going to support it. And, you know, I think, you use the word, I think, idealistic.

I mean, I think it's like a little bit naive to assume that you're going to be able to get rid of all the guns in the hands of bad actors. There are a lot of people in this country who feel the need to have a gun to protect themselves. And, you know, the cops can't always get there quickly enough. And a lot of people feel the need to have that for self-defense. I also think the minimum amount of training for a police officer should not be six months. I think they have to re, I mean, if we really want to have the society move forward and, you know, to solve our issue of race, which is, you know, like the original Sidna of America, we're going to really need to start thinking about making, you know, police go back to school for 18 months, 12 months and rethink how we how we address this situation because it's just tragically unfair of that.

one group of people's children has to worry when they're driving in a car. And, you know, other people on this call don't have to worry, right? And, you know, that is just crazy. Let's take a hard shift to the economy and then we'll go into the election. What do you think, Tramoff, you've been talking a little bit about the economy and the stock market ripping again. And we seem to have hit a pause. But we did have like a massive rip with Tesla and Apple, I guess, doing a stock split. and we hit all-time records.

Why are we hitting all-time records, Jamath? We have the most important thing that's happened, I think, in economics in the last 10 years. To listen to the rest of the podcast, search for All In with Chimoth, Jason, Sax, and Friedberg, available across all major podcasting platforms.