Supply Chain Shortages, Inflation, DeSantis, Ted Sarandos Netflix Memo, Cancel Culture, Fan Q&A

The recording opens mid-conversation about a high-stakes game the night before. Speakers say the blinds and bets doubled round after round, from the $500 chips up to figures like 32,000. Asked who won and lost, one speaker gives losses in the hundreds, another declines to say, and the group teases a host who answers "fine" as a sign he lost. A joke about a $42,000,000 breakfast is played for laughs.

The formal welcome marks 50 episodes of the show and says they will "definitely get 3 or 4 more in" before an unspecified break-up. The hosts introduce themselves with their usual nicknames, and the host list includes an undisclosed recording location. Replies are upbeat: one host says he feels grateful and points to markets being up, which another puts at 4%, a figure that is the speaker's own.

Two hosts report that their partners are close to delivery. One says his wife went to the hospital three times in the week, each time believing she was in labor; another says a scheduled induction is set for the 26th, eleven days away. The others try to turn it into a wager, setting a line at the 21st and arguing over who will have a child first.

The talk drifts to whether the hosts are too old to be having children and then to a joke guessing who has had a vasectomy. One speaker guesses it is probably Sacks; another declares one host definitely has not, since his wife is pregnant. The bit is lighthearted, with one host asking whether the audience really needs this information, and it is dropped to move on to the main topics. No one confirms anything about anyone's medical history.

A host sets up the main subject: supply-chain interruptions and shortages of key components such as microchips. Citing Car and Driver, he says the vehicles most affected were the Ford F-series pickups, Jeep Cherokee SUVs and Chevy Equinox SUVs, and he reports that some cars are losing advanced driving features. He says that a Cadillac Escalade he was considering dropped its self-driving option for the 2022 model because of the chip shortage. He links the problem to COVID, to strong demand for computers and to a labor shortage, with employers raising pay and some states ending bonus unemployment early.

Chamath says he disagrees with the market view that these are short-term contractions that will work themselves out after COVID. His main evidence is a labor stat he says he saw: average hourly earnings for non-manager workers in hospitality and travel rose from somewhere over $20 an hour to $33. He reads this as a sustained period in which work cannot get done without higher pay. The statistic is his recollection and was not checked on the show.

He adds that the President had to call the Port of LA to ask it to run around the clock, and says unionized workers expect pay that fits round-the-clock work. In his view the only efficient way to fill millions of open jobs is higher salaries, and those raises will be persistent because employers will not take them back. He pairs this with raw materials that he says are "going bananas", concludes the pressure is here to stay, and says that after earlier episodes saying there was no inflation, he is now hedging his own positioning.

The host asks about the LA and Long Beach ports, where ships are queued offshore, with a peak of roughly 70 or 80 in July by his recollection. He raises a possible upside: if workers earn more, the middle class grows, but they then buy more, which could worsen the bottleneck. Friedberg answers that the difficulty is the rate of change, which is what the Fed tries to manage.

Friedberg says the current estimate he has heard is that clearing the global logjam will take about a year. In the meantime, scarce inventory is bid up, businesses need more labor and pay more for it, and workers then ask for more still, which can produce an inflationary spike that persists. He describes the White House economic task force as trying to cool this without causing economic disruption through higher interest rates, a balance he calls a complicated second- and third-derivative problem.

A speaker then notes that central banks around the world have raised rates, and that, as he understands it, the exceptions are the ECB in Europe and the Federal Reserve in the United States. He adds that Europe and the United States absorb labor and materials from the rest of the world.

Continuing from the last point, a speaker argues that the United States is a net importer and the buyer of last resort for these goods, so any inflation in supply-driven economies abroad will come onshore and reach American prices. He expects prices to rise.

Another speaker offers a free-market counterpoint. If low-wage labor becomes expensive enough, businesses may find it worth investing capital in automation, and technology companies may build the tooling for it. He lists fast food, local delivery, factory assembly, self-driving trucks, biomanufacturing and 3D printing as areas that could benefit. In his telling, that shift would eventually be deflationary and the market would come back into balance.

One host says the bigger risk may be stagnation or stagflation, because goods and services are not being produced at all, not only costing more. As an example, he says that a Tesla he ordered earlier took about two weeks a couple of years ago, but this time he was told to wait two months with a further two months possible. He notes that Tesla books revenue at final payment on delivery, and says traditional automakers such as Ford are hit harder. If companies cannot deliver, he warns, a recession could follow.

He singles out the ports and cites a tweet thread by someone the transcript renders as Zach Kanter, which argues that the supply chain crisis is a rebrand that hides unions holding ports hostage while ships pile up. He says the announcement that the Ports of LA and Long Beach would run around the clock came with no date. By his reading of an article updated the day before, the ports had only announced an intention to negotiate with the unions. Another speaker thought they were already running 24/7, and he held to the article.