Post-vaccination virtue signaling, pandemic lessons, immigration, Caitlyn Jenner for CA Governor, Big Tech earnings & more
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§01Segment 1
This is an incredible fashion disaster we
have today.
David Sachs
is dressed like, where's Waldo? Okay.
Friedberg Freeburg is dressed like driving a fucking Subaru Outback.
Oh god.
Unbelievable. I mean, this is
ridiculous. screw.
The let your winter ride. Rainman, David Saffens.
And I said, we open source it to the fans and they just got a reasonable work.
Everybody, everybody. It's another episode of the All in podcast episode
31
with us today from Well, it's just rolled out of bed. The queen of Kinois himself. David Friedberg is here. Let me do my hair. Get that hair.
It's not gonna
Have you been setting the homeless problem by by yourself going out on the streets or what?
What is that? Do we need to do an intervention?
I'm gonna go change.
Can you give me a favor? No.
No. No. No. No. No.
Keep the Friedberg minutes up. We have to keep the freeburg relation -- Uh-huh.
--
ratio up. somebody stop me in Miami and say, keep the Friedberg ratio high.
Uh-huh.
Also with us chiming in is Where's Waldo himself, the skipper, David Zach's Rick. That's here. Skipper. Skipper is here.
Don't change my nickname. Don't change my nickname. I'm comfortable with rain man. Don't throw
me off. Yeah. Definitely. I'm definitely okay with rain man. Of course, not the skipper.
Not the skipper. And the dictator himself. Got a full night sleep, I hope, this time.
I did. Shamal -- I
really did.
--
Hapatia. And, of course, I'm Jake Howell, the baby seal here. In Miami, look at the view how beautiful. It's been an incredible incredible week. The Tiger has been unleashed.
I went to Austin, Now I'm in Miami.
Jake, Kelly,
you're more like a you're
you're more you're more like a pudgy hyena. I don't know. You're not really a tiger.
The the quarantine 15, big announcement, £10 are gone, 5 to go. I'm lifting weights, outside in Miami. It's been amazing. Field report. I get to Austin.
I kid you not. I got my mask on.
10
people first of all, 10 people say, I love the all in podcast. Every, like, 15 feet walking in Austin and in Miami, But somebody looks at me with my mask and says, are you okay, son? And I was like, why? My kids are not. And I he said, are you vaccinated?
And I said, yeah. He's like, why you're wearing a mask? And I realized it's time for independent critical thinking. Sachs, I gotta give it to you another great great tweet for me to copy and adapt to steal your deal flow. But I love this tweet that you had where you said early in the pandemic, explain the tweet, or maybe read the tweet.
This is this is to me.
I I've been blessed.
What about masks? About one group of people Wouldn't wear masks.
Oh, yeah. Yeah. Well, at the beginning that's right. I mean, the the the dysfunction of our politics is that how the country wouldn't wear a mask at the beginning of the pandemic, and and and now the other half of the country won't take them off at its end. this is the problem is that the mask has become it's the equivalent of the red MAGA hat for team blue.
This has become some sort of virtue signaling even when it's not necessary. But it's actually destructive because it's performatively sending the signal to people that the vaccines don't work. And we have a third of the country today is still vaccine hesitant. And this is not helping. What we need to be sending the message to them is, look.
Get vaccinated so life can get back to normal so you don't have to wear a mask. And, you know, we still have the CDC putting out this ridiculously conservative and timid guidance saying that, well, If you get vaccinated, you can take off your mask outdoors as long as you're not with too many people. Well, like, what no. I mean, look, once you get vaccinated, you should need to wear a mask outdoors or indoors. And, you know, we had to stay this sort of mini state of the union this past week with Biden.
And it was just really, like, showing the image. No. It was, like, an empty room -- Empty room.
--
because of social distancing, and they were all wearing masks even though you know every single one of them is vaccinated. And so I think Biden really missed an opportunity in that speech. Yes. He said that everyone should get vaccinated, but show not tell. I mean, you know, he walks up to the microphone in a mass saying that we should all get vaccinated.
Well, what is the mask for? Why don't you tell people if you get vaccinated, you don't need a mask anymore. And so, you know, the we have this sort of contrast where
-- -- actually really it it's really incredible because to your point, he was trying to make some very important points in that speech, David. And when the camera would actually pan from behind him, So instead of looking at him and Kamala and Nancy Pelosi, it would look, there was nine people. And you thought another
sold that crowd for for Trump and Ambien.
No. Because because no. No. No. Because, typically, when when you give these sort of state of the union or, you know, these kind of, like, 100 day addresses, it is packed because you have everybody in congress.
You have everybody in the senate. You know? You have you have typically, like, a bunch of other officials. You have
the Supreme Court judge.
Yeah. Like, in a state of the union address, and there was nobody and it felt really striking to watch that.
If Trump's mistake was not wearing a mask, in April of
2020,
I think Biden's mistake is not taking it off in April of 2021. Why can't we get a political leader who is willing to put en masse at the right time and take him off at the right time.
I wanna do a risk assessment.
Just we we need a political leader who's reasonably scientific and -- Yes. -- we'll actually say, here's the Intersection of Science And Common Sense that everybody can map to and and copy me. Because it is, to your point, David, you know, the the leader of the free world has given that title for a reason. It's not
it's not
complete completely ignore what I say. I've been put in this position because I am you know, on some dimension, expect it to be the most thoughtful person in the room and set the example for everybody else.
Let's let's just talk like the important consequence of this and and I agree with Saks. The important consequence of this, however, is the economic effect it has. So, for example, in San Francisco, restaurants are only allowed to be at a quarter capacity. So there are restaurant owners that wanna get back to business that wanna generate income again that wanna get off of the PPP loan program and all of the the government support. And they should be able to because most people in San Francisco at this point, the vast majority, in fact, are vaccinated.
And the restaurants for no scientific reason are shut down or limited to a quarter capacity. And this is the case across a lot of cities and a lot of states in the country right now where the conservatism with respect to coming out of the, you know, the the major part of this kind of pandemic is what's now keeping the economy or not just keeping the economy because we're we're fueling the economy with stimulus. but is keeping business owners and keeping people that wanna participate actively in in building and running their businesses from getting back to work. because we're so conservative about this. And you know what?
Saks is totally right. Yeah. Like, take the masks off. Let people go into restaurants and let people go have dinner in San Francisco. Let these places get back to work.
By the way, we have a we have an a b test that's actually nobody is talking about, which is that the more conservative version of America's posture. Right? America is sort of like half we don't care and half we care too much. But in Europe, you could see a more, you know, homogeneous approach to the problem and we printed a negative 0.6 percent GDP growth in Europe. So to your point, with all the vaccines that are out there, with all of the logic and all of the science, Not being able to just take the mask off and get back to life as normal was negative 0.6% GDP growth in a quarter where they also printed 100 of 1,000,000,000 of dollars.
And now you come into the United States. Last year, I don't know if you guys remember this, but every forecast I saw Had g d from the smartest folks saying q 1 GDP would be on a run rate to be around 10%. It would be one of the best in history. It was only 1.6%. So we're on a 6.4% GDP growth run rate.
Guys, that's not 10%. Now it's still a lot, but the point is We gotta get back to life as normal. We have to show that these vaccines work. We have to tell people that you can have a normal life. You should be going out, spending money, going back to the office, live normally.
Yeah. And and we we should we should just cover the data. I mean, we should I mean, it'd be great to put up the latest CDC data on the screen. Yeah. If you use the CDC as a source for the data as opposed to listening to their interpretations of it, their policy interpretation, it's actually pretty illuminating.
So out of 87 million people who've been vaccinated, There have only been 408 serious cases, which would be counted as hospitalization or death related to COVID. So those are odds of 1 in
213,000.
The odds of being hit by lightning are 1 in a
180,000.
So your odds of being struck by lightning are greater than your risk of getting seriously
-- --
the odds of a royal flush? I need this in poker terms. that sounds like hitting a royal flush twice.
Yeah. Yeah. Exactly.
It's crazy. How many royal flushes have we each hit?
I'll put it I'll put this article up, and you guys can share it in the
Show notes. Is the technology review 1? Yeah.
Yeah. And I think it it does a good job of speaking to Saks's statistic. Now yeah. So I think Saks setting this represents the CDC data and the first paragraph in this article, but it goes on to kinda speak about the statistical likelihood of of these events. So know, basically, you know, it opens up by saying, you know, as of April 20th, 87,000,000 people in the United States have been vaccinated and only
7157 0.008%
when on to become infected with SARS CoV
2, 330
of whom were hospitalized and 77 of whom died from the disease. And I would guess that that of those people, there is likely some immune dysfunction which is a
§02Segment 2
--
Yeah. -- you know, a a a likely reason why. It it doesn't mean that every individual has that risk. It means that there are certain people there that are gonna have immune dysfunction and won't react well to to to won't develop the appropriate kind of protection from the vaccine. And that's you know, that that small, small, small, small percent of people are the are where we're kinda seeing, you know, actual risk going.
That's where I get 408 number is it's the number of hospitalizations plus deaths minus the ones that they say in the footnote were not related to COVID. Right. So there's some other, like, cause. So 408 out of
87,000,000.
And by the way, I I think it's worth just highlighting you know, just think about the rationale for why there is conservatism here still. Right? So If there are still pockets where people have not been vaccinated in the country and there are still areas where people are hesitant vaccinated, and there's a large unvaccinated population. The official guidance the the official kind of reasoning, I believe, is that we need to be conservative to get all of those people to behave in a conservative enough way to keep a, you know, a surge from occurring regionally around the country And the the loss, the downside is very negligible where people still have to wear masks. What I don't think that that calculus accounts for is that the loss is actually not negligible.
The loss of telling people broadly to keep wearing masks is a hesitancy to go back to work. A hesitancy and a conservancy to engage in normal economic activity. And so, you know, I think that we're kinda missing that point in the kind of officiating of this of this exit strategy here And it's it's certainly I I'm I'm aligned with sex on this. I certainly think it's it's biting us more than it's helping us.
To give you an idea, just like experience wise, when I was in Austin, Every restaurant is at a 110 capacity. The locals there were like, I can't get a reservation for a week or 2. The town is packed everybody in the country is going to Austin and Miami because they've just learned that Austin and Miami have officially declared. If you have the vaccine, you can go have your life. But there is still a little bit of theater on the margins.
When you go into a restaurant, I went in to to get a meal And I didn't have my mask on. I kid you not, 110 capacity, hundred people sitting at the bar, two hundred people at tables. She hands me a mask, and I said, I don't have one. I put it on. I said, can I ask you a question?
And she the host says, why should you wear a mask when there's three hundred people in here without a mask and the doors are closed? like, that's the exact question. She goes, it makes no sense. The governor wants no mask. The mayor wants masks.
And so they're having their own little version of the national conversation in Austin, which is locally scared or at least the politicians are, and then reasonable otherwise. So you literally put your little mask on. You walk 10 feet to your table and then take it off for the rest of the time. In Miami, It's a true story. I go to Miami.
I walk into I I I you know, it was I I haven't been out in 14 months, so I decided I would check out a club. And I went to a nightlife club, and people were dancing and having a great time. People were also popping bottles And I was like, oh my god. It's over. Like
--
At nightlife club.
It was a nightlife club. And then
--
Uh-huh. No. It was not a yes. Anyway, it was a legitimate club, you know, here in South Beach. And so I took a little insta, and I share I fed the insta and immediately, I got 3 comments from friends who were like, what are you doing in that club?
And I wrote back to all three. I'm vaccinated. And they were like, okay. And I was like, It's not what I think is
but I think this was the point I made a few months ago, which is I do think that the the the subconscious training, the fear factor that's been kind of, you know, built into us over the last year, year and a half, it's gonna take a while to kind of train our way out of. You know, people aren't gonna be that rational and that conscious about, oh, I've been vaccinated. People are basically, the default is fear, the what ifs, the butts. But, oh my god, people are still getting COVID even though they're vaccinated. there's there's variants.
But and everyone looks for a conscious or, you know, a kind of conscious reason why they're rationalizing their subconscious fear. and everyone's got this fear to go and do things and this fear to go back in the world because we've literally been trained and beaten into a corner for the last year. Now the conscious reality is you don't need to be fearful, but I'm fearful, therefore, I'm looking for reasons to maintain my fear. And I think this this this is like what again, I I'd say that I said it, like, 4 before, but I this is what happened after 9:11, and it lasted for years. And and, you know, we still have ridiculous TSA processes.
We need our leaders to take their masks off. Get Tell everybody they're vaccinated. Take their masks off. Go back to normal life so that everybody else will feel that it's okay too. Because even if you're even if you're if you're not fearful, David, the other thing that you are is just guilty.
And, you know --
Right. Totally.
And you gotta you gotta get rid of that as And the only way you'll do it is if highly visible people are now actually going back to life is normal. Yeah.
Like, the peer pressure element of it. It's like I feel bad I feel bad going into a store when everyone else is worrying asking. I I'm I'm asshole.
--
crazy this crazy MSNBC moment.
1
of the hosts of one of their shows said I've been fully vaccinated, but I went running in Central Park, so I double masked. And I'm like, the furniture signaling was so insane. And I'm like, Wait a second. You're outdoors. -- insane.
Oh,
this is a this is a Joy Read thing. Yeah. I don't
I don't wanna see the person's name because -- Yeah.
--
then if you mention who it is, then you might be attacking a person of color or a woman host. So I just said
-- Well, now you're avoiding it, which makes you think that you are. So who is it? Who am
I supposed to say it without be -- Does
anybody what? I mean,
nobody watches them as a BC.
That yeah.
What is that?
That's what I'm gonna say. MSMBC was the Trump get it. It Trump derangement syndrome therapy was MSNBC, the ratings go. I wanna I have a question for the 3 of you. Knowing what we've seen here between the illogic of both sides and the media and the insanity, What do you take away from the year of the pandemic as it comes to a close in how you personally look at the world Sachs, you wanna start?
Like -- Yeah. I'll tell you. I feel like the American people are constantly being propaganda and there is almost like an information war being perpetrated on the American people where we cannot get the data, the facts, and the truth. I think it it's true now in terms of people not taking off their masks even though we have the CDC data that basically shows the the lightning strike probability of getting COVID. But we saw at the very beginning of the pandemic.
Remember, I have all these people on Twitter telling me every time I tweet about this, why don't you just listen to the experts. Right? They want me to shut off my brain and just do whatever the CDC says and I'm like, well, do you realize The CDC was against mass at the beginning of the pandemic back in March of 2000 last year when I was saying we need to wear mask because I was looking at the success of the Asian countries and some of the data coming out of that. The CDC was very, very slow in adopting mass. They were against it.
They were telling us we didn't need to do it.
And that was the historical CDC. Like, right, they've been around for a long time. And then also, Trump was anti mask. And so you had
--
Trump was slotted a dot mask too. And, yeah, and absolutely. And so, yes, I mean, I've said that there's, like, a Venn diagram of American politics where the you know, One circle is favored mass wearing 1 year ago. And then once they get rid of mass mandates today, the Venn diagram of overlap between those two groups is very small. I'm in that overlap.
I feel like I'm in, like, a very lonely part of the the political graph.
But -- Yeah. Chamath, how has your thinking? You know, now that we've had to process this event in our lifetime that is probably the most consequential you know, moment.
Yeah. I have I have I I thought about this a lot, Jason. You ask a really important question. And I think everybody should probably try to take 5 minutes and actually write this down because I think I'll tell you what I learned. I learned I learned 3 things.
The first thing I learned is intellectual, and it's exactly the same thing that David Sachs said. it is completely shocking to me how much disinformation there is and also how we are so prone to turning off our brains and not thinking for ourselves. So it's really shocking and I think 2020 was the year that that was laid bare, that the institutions that feed you information can't really be trusted, that you can't really trust the interpretation of actual simple data that nobody wants to think in 1st principle. So that's the first one. We have stopped thinking for ourselves and that's a recipe for disaster.
And so that's an intellectual thing that I've realized, and I don't wanna do it. And so I'll think for myself and I'll take the consequences. The second was economic, which is, wow, we have really over rotated to this crazy form of globalism that is gonna get undone over the next 30 years and that's gonna have a lot of implications and it can be done in a way that can rejuvenate the United States which I think can fix a lot of the stuff that was created and we should talk about that later today. And then the 3rd is physiological which is if you didn't know before, I'm gonna tell you now and it's this three letter word that we make into a four letter word in America which is the letters f a t. We have a fat epidemic in the United States.
Almost 80% of every single person that was hospitalized because of COVID was clinically obese. And you can't test And you're not allowed to say it. If you say that somebody is fat or if you say that somebody is obese, it's all of a sudden like, you know, you're gonna get virtue signal cancel and instead what we're doing is we're leaving an entire generation of people completely abandoning them because we're not confronting the problem that by a combination of food and the lack of movement, we are setting them up to either die acutely of something like COVID or chronically by heart disease and diabetes. And that it was like it is now so obvious. And by the way, that's the other thing where These healthy fit people were running around double vaccine and or double masking in Central Park, and they don't even know the basic data.
§03Segment 3
Like, even if you thought you were gonna go to the hospital, the 80% of all of those millions and millions of hospitalizations were from people that were obese. They had physiologically completely taken their body to a place that it wasn't able to fight Right. So those are my 3 takeaways. Intellectual, economic, and physiologic.
And start one thing on that is because I agree with with everything Chamath has said is this this idea of laying bare. The laying bare, the the sort of corruption of these, like, institutions that are supposed to be coming with good policies and educating us. And it turns out they, you know, keep giving us this foolish guidance. But there's also another institution. I think that was laid bare, which are these education unions.
Right? We had school closures for a year. The the learning loss and the isolation that kids are have experienced We don't even know what the results of this are gonna be. This could be a generational consequence. And what do we see from the education unions?
They didn't wanna go back to school. They fought it. You know? We had the whole Oakley school board resign because they just said, well, they want us to go back to work to be babysitters for their kids so we could smoke pot. These are people who don't care about the kids.
And after this year, I don't know how anyone can be against school choice or charter schools or giving parents more involvement in their kids' educations.
100%
Friedberg coming out of the pandemic and looking at your own psychology and your own life, what have you learned and what do you take forward in terms of lessons and how you're gonna approach post pandemic life.
I'll kinda flip it a little bit. one of the first experiences I had with how broadly people could be influenced in a way that doesn't have grounding or rooting in facts in reality is when I sold my company to Monsanto in 2013. And Jay Cal, I think you came with me on one of these trips that I took Yeah.
I visited myself out with you. It was very
educational. And, you know, there was an incredible bias by my team and by me personally, prior to even engaging in conversations with Monsanto against that company because they were deemed to be evil. And as I as I spend a lot of time personally kinda digging into the the fact in the history of the business and kinda how we got here, it was surprising to me, like, how much of the bias against Monsanto was not rooted in fact and was in fact, you know, a series of claims that then became truth and reality because of the perception. and it just became things got stuck that way. GMOs are bad.
GMOs are evil, that the science of how they work, what they do, why they're useful, was never contemplated, never became part of the dialogue. It was just the sassumed fact that this is an evil company that this stuff is bad. And, you know, this is a long, long topic. We could talk about this, I'm sure, for an entire hour and a half about the science and technology behind GMOs and how we make food and all that sort of stuff. And be happy to do that another time.
But, like, for me, I was just so surprised when I engaged with thoughtful friends of mine who were scientists even and they had this bias. And then when you engage them in a dialogue about, like, why? Where does that come from? What's the rooting? It just wasn't there.
And I got and and I mentioned this to you guys when I was an executive at the at the management team in Monsanto, we had a WHO ruling where a guy got himself elected to the eye arc, the this is the Cancer Research Group within WHO, He was this liberal guy who was very anti technology who got himself elected to the eye art board and got a ruling made that Roundup is a possible car signature. And that ruling led to a $10,000,000,000 lawsuit that Monsanto or Now Bayer is settling. which wasn't rooted in the science or the fact that that the other scientists on the committee had kind of previously kind of preview previewed and gone through and said, this isn't cancerous. and it's incredible the implications it's had. And so I've always you know, for for several years now, I've had this kind of belief that, like, people can be led to believe things that aren't necessarily rooted in objective truth or in fact or have empirical evidence to to behind them.
And this is this this goes back to the origins of religion and modern keys and, like, you know, these myths and these these these these tales we tell ourselves where we all end up believing something, and there's some influencing factor that that drives that. I think this has just been an incredible manifestation of that. The the the misinformation on both sides from the beginning to the end of the pandemic, And it's just been extraordinary to watch. I don't think you change it. I think social networks amplify it.
You know, I think that the the rate at which information or misinformation flow back and forth is making it easier and quicker to kind of adopt this, you know, systemic, inaccurate belief system that people might adopt. And so, you know, it's a it's a it's a big question mark for me. I I don't know, you know, how we as a people kind of move forward with, like, objective fact based decision making and and belief systems. And I don't know if we ever will. But
--
Well yeah. -- it's just how humans are wired maybe. You know?
I've been giving it a lot of thought. I And I really like all of your answers because mine is very similar. Number 1, I I feel like I was always an independent critical thinker in my life. and that I think I kinda started to pick sides because of Trump that, like, I just found him so offensive. And I realized have to go back to being just an independent critical thinker.
I affiliate with no party. I assume all news stories are fake news. I assume all data is being manipulated. I assume everybody's got an agenda. I believe everybody's virtru signaling now, and I'm making the decisions for myself.
And I in the one of the things stuff tells exactly what you said, Shamoff, which is This was a disease of a of, you know, old people and fat people, obese people, of which I have been one for far too long. And this is my commitment is just I I gotta take my health a 100% seriously now that I'm fifty years old. I got a trainer. I got a masseuse. I'm working out and doing weights.
I'm doing everything. I changed my diet. I'm taking supplements. The the stuff we talked about here. I went right to my doctor after that episode.
We did off. I'm getting that body scan for 4 fucking grand or whatever it cost, and I I'm just doing it all.
Are you saying Massachusetts is gonna help you lose weight?
No. But I've had a I've had shoulders
-- -- that Maybe the -- No.
No. Beep that out. Beep that out. No. I just realized I don't stretch.
I don't stretch, and my shoulders were getting very tight and being on the computer and everything. So I'm just
What a what a man of the people? What a man of the people.
Oh, look
at you.
Which I got, sir, you were a traitor? I got a miss sucks every week. I gotta figure out go.
I got a personal I got 4000 my money
on making myself out. The third thing and this is heartfelt and sincere is that friendship and our loved ones are really with along with health is so important, and I am cherishing every moment, every experience with every friend knowing that the world can shut down and whatever And we have to take advantage of every moment. And that that for me is the the takeaways.
The just to build on something, I'm really proud of what you're trying to do Jason for your health. When I I remember, I you know you know how we all have these high grade school pictures?
Yep.
Right? Like, you go to, like, picture day or whatever. Yeah. And there was this crazy contrast that I had in my grade school pictures. There was, like, 2 of them when I was in Sri Lanka.
So I was like, you know, 5 and 6. And then great. You know, then I was 7 or 8. and then all of a sudden this crazy, hey, hey, hey. What's up, Antonio?
Antonio, it's you. Gus. What's up? Me. Me.
mucho Caliete.
Does does he tell you to realize he's on an international night
right now? Yeah.
going into that.
Nobody even knows who he is. Don't worry. He's like one of the most powerful guys in in our industry.
What I was gonna say is, like, by, like, I think when I was like 9 or 10, I had gotten really fat. Right? Because because when we moved to Canada, It was a very different food supply. And then economically, we were in a different place. We ate what we could afford, and I put on a lot of weight.
And that weight carried with me until college and then after college, and that's when I said I gotta get in shape. Exactly for the same reason, Jason, because like my dad was getting dialyzed. He was constantly you know, dealing with these health issues and I said, I don't wanna deal with this shit. But that's a rare thing that happens. If you think about the number of people that are put in this predicament of like not even Forget you you're you're able to get a trainer or whatever, but there are a ton of people that can only eat what they can afford.
Yep. Right? And the reality is it is just meaningfully cheaper to eat at McDonald's than it is to go to Whole Foods and be able to buy organic food And so it's just not even on the agenda for people. So this is what I mean by you. We have to be able to say that it's not that people are fat because they choose to be.
that there are these systemic imbalances that make people sick. You know what I mean?
Education and health. These are
the things that we need to work on
in America. Like, Saks, you said at the was it last week, Saks, you said, you know, the I think this is a great bargain that could happen in America with all this polarization. if even a Republican conservative, like Saks can say, everybody should get a great education, and everybody should be healthy. Right? Like and Saks is in a socialist, but this this is important, and it's so easy to just get a happy meal than to to eat a salad, you know, or whatever.
I was in Washington, DC this week. And I met with this organization which anybody who is interested in this should check out called Third Way. And what Third Way is is a centrist organization. Right? So they they largely work with Dems to try to pull them here.
And I think the Republican version is called the Niskansen I guess, center. But the idea is I I sat with these guys, and I was like, just teach me something. And they taught me the most incredible thing. You guys know who Pew is PU goes out and does all these surveys. --
etcetera. They've been doing it for decades. They're they're the most respected, I think, in service.
§04Segment 4
Pew does this incredible thing where they go to, like, a whole bunch of countries in the world. And they ask this basically very simple question. I'm gonna ask you guys what you think the answer is. on a 0 to 10 scale where 10 is important, what do you think Americans think to the following question? How important is hard work to get ahead in life?
Meaning, right? So it's a proxy for how Americans think about hard work. How important is hard work to get ahead in life. Friedberg. What percentage of Americans do you think that say that hard work is important to get ahead in life.
And I'll give you a couple of data points in Indonesia. 80%. Yeah. But the setup is Indonesia, 28%, India, 38%. Germany, 50%.
Go ahead. What do you think the answer is?
Well, it should be a 100%. But what do I think it is in the US? I I'm I'm hoping it's about
60.
I agree with you, Saxx. A 100% is the right answer. And I believe Americans don't believe it. I'm gonna put Americans at
35%.
because we've seen so many people get lucky and get rich in in the United States.
Or or just people think the system's rigged, or the victim culture where people tell everybody don't bother trying because it's rigged, and you just it's -- I think
the argument sorry, Shamal. I'll I'll let you give us the answer in a second. But I think the argument that, like, entrepreneurism fuels these moments of extraordinary success, but the perception creates the opposite effect, which is someone can get rich quickly, and therefore, there's this luck factor or this unfairness factor that is, you know, that is inherent in the system. Right? And so while it does enable hard work to drive, you know, tremendous outcomes, the perception is that holy crap in 3 years, you know, Kylie Jenner went on Instagram and became a billionaire or whatever.
Right? And and people get really kinda blown away by that, and I think it's discouraging. And
--
Or one person's success makes it such that other people can't, that it's 0 sum when in fact a company. Right?
What's your what's your number for America? 80%. The number is 73%, and we are the 3rd highest ranking country in the server.
That's great.
So it's amazing. Now if you if you ask then Americans who better represents the interests of hardworking people, Among Republicans and Democrats, the overwhelming answer is now Republicans, which is really interesting. Democrats even in exit polling basically voted for Biden because they just really found Trump distasteful. And a lot of the people that basically said, you know, he's an ass, and so they voted him out. But it was not because they believed that Democrats could do the job of actually reinforcing the values of hard work.
And this goes back to -- Yeah.
They don't want handouts.
People don't want handouts. People people people want a fair shot. They want an even starting line. They don't want an even finishing line.
Yeah. They don't they don't no one wants paternalism. And and everyone wants opportunity, you know, but you take what you're given when it's available to you. No one says no. You know, I spent a lot of time with farmers in the Midwest in the United States.
Very die hard, conservative, generally. Right? And and farmers benefit greatly from significant government federal government support programs, primarily a crop and share program and some commodity price support programs, but but they are very anti government. And there's this tremendous irony there. Right?
Because they don't wanna hand They they wanna kind of be left alone. They wanna be able to run their business. They want and I'm and I'm generalizing. Right? But I'm just speaking broadly to kind of the theme of things I hear when I when I meet with farmers.
But when the crop insurance program shows up and direct support payments show up, you're like, okay. I'll take the check. You know? And so it's it's hard to say no But I think the motivation for everyone is universally the same, which is right? I I I wanna have the opportunity to be successful independently.
Are we creating policies that reinforce this And are we creating the condition that makes people feel less like a victim, less looking for handouts, and let's reduce. I I have a concern about the stimulus check I I I do think it was a smart thing to do to get us out of this. But do you guys wonder if this generation, which is not going back to work, we have a shortage of Uber drivers. We have a shortage of bartenders, waiters. Nobody was a lot of people are just choosing not to go to work because this they have their stmis.
America is a place where you come to because you want to grind. You wanna find your own little engine room and you wanna be in there and you wanna put in the hours. And the people that it attracts from around the world speak to that. You know, the way that you can explain you know, why Indonesia and India are so far to the left on that same question is because it's an extremely homogeneous population with 0 immigration.
No immigration. Yeah.
I actually think the reason why America so far to the right is it itself selects not by, you know, some kind of gender age or religion or color of skin,
by motivation.
It's motivation. And it's like, if you're motivated to crush, you come to the United
States. Yeah.
We we've all we're all what are we? Like, you know, one generation away except Jason. You're 2 generation Americans?
My Irish side is 6th generation.
We're all we're 1st generation except for Jason. Right? We all moved here to the United States as immigrants.
As immigrants.
With motivated family. Yeah.
I think that's why I'm the least successful of the group.
Is that what you're saying? Yeah. You're the you're the lazy can place in America, and whereas we're the hungry immigrants.
I've tried. I've tried. Hey. Listen.
You're the Daniel Day Lewis character in gangs
in New York. You know, you
hate the Democrats. sit at the boat. You throw eggs at everyone. Yeah.
It's interesting you bring that up. Yeah. Do you know where my Irish Porberis came from and where they immigrated to? Ireland. -- can the 5 points.
Oh, the 5 points.
We were in the 5 points. It's exactly accurate.
Yeah. Of course,
I was. It makes a lot of sense.
You're not Daniel Day Lewis. You're the the heavier shorter guy, though. That was kinda the
--
Not so long. You know what? Yeah. I I dropped 10 of my my quarantine 15, and I gave it to Saxx.
Yeah. You did.
You're looking good, Jakeau. You look good you look good
in Miami. Miami suits you.
In a weird way, I gotta give I gotta give Jakeau as much credit for where he came from as Chamath because, I don't know, those parts of Brooklyn are maybe as tough as Sri Lanka.
Kids with guns. Kids with guns.
Yeah. You know, child warriors
are gonna jump to always roll with a posse.
By the way, you know, on immigration, I don't know if you guys saw this. You know, George W. Bush is a paints now, and he paints immigrants. Yes. So I bought his book.
I bought a signed copy of it. I should have brought it to the podcast today, but it's a great book. I highly recommend it.
Trigger warning.
No. But he actually has some writings in there that talks about the power of immigration. and how immigration is so core to the success of the United States just to our point. So this this conversation made me think of the book that I just bought this week. Really cool book, by the way.
George W Bush, amazingly, great artist really captures the personality of immigrants in his in his work. I think the thing the thing is, like
like, everybody wants to come here to work hard. Everybody that's here is willing to work hard, right, whether you're 1st generation or not, And then the question is can government create policies that allow us to do that and actually just create a safety net to catch us if we fall because that's what we also all want. So there are parts of Biden's bill that I think made a ton of sense like, you know, making community college free. that's a really disruptive idea because it'll put a ton of pressure on for profit colleges. Right?
To, like, get their act together or not? That's a good idea. The child tax credits so that you can actually have subsidized, you know, childcare for your kids. That's a good idea. But then where you kind of go astray is then when you start to figure out, you know, the levels of taxation, again, we talked about this last time, but You know, I just think that that's where you can kind of demotivate people to not then put in the hours.
I think this is a good segue also into immigration through our southern border and this incredibly polarizing issue and how the media is polarizing it, how the parties are polarizing it. Just to ask a question to see if we even understand the data, how many people do you think are illegal immigrants in the United States right now?
20,000,000.
Okay. Friedberg Sacks. I'm I'd suggest.
Yeah. I I guess I guess 18,000,000. I'll take a slight under to but about the right that's about the right order of magnitude.
The the last summer I heard was, like, 12,000,000, but that was a few years ago. And so
--
It's 12. Now how many people are apprehended at the southern border a year since 2010 every year.
Half a1000000.
Anybody else wanna take, I guess?
50,000.
Alright. It's
350,000.
So we literally are tearing the country apart.
And I know that because I watched the movie Sicario, and I'm estimating based on the scene where they round everyone up at the border and took them away. So that that that's my
--
Terrifying film
--
Yeah.
--
and awesome. Like, also,
You think incredible film. Just bring us my bring us Xanax
because you might have a panic attack.
My favorite modern director, Dennis Villanuev. He's unbelievable, but Yes. We we digress. Yes.
That scene when they're racing the cars into the border crossing voter checkpoint. What it is so into the bag. It's so intense. So I don't
So if
you guys are into sci fi, that guy directed the arrival, which is one of my favorite films. Yeah. That's a fabulous beautiful thing. Yeah. Beautiful, though.
So literally, the country's being torn apart, a country of
330,000,000
over 3000000 would be 1%, point 1 percent coming into the border. And we just said immigration is just all these amazing people coming here to who wanna strive and who want great things, why are we tearing the country up over this issue? This is a tough topic.
This is a tough topic.
Well, I think I think, Jason, I think your your point of view on immigration really depends on where you're sitting in the economy. I think for all of us who are in Silicon Valley, we know that something like half of startups have an immigrant cofounder Totally. So we've seen, you know, like PayPal, I think, you know, there were, like, 3 or 4 immigrants on the founding team. You know? Peter, was born in Germany.
§05Segment 5
Elon was born in South Africa. Max was born in Russia. You know, I was born in South Africa, and then you go down the list. Same thing with Google. You know?
Sergei Bring came from Russian just on and on and it goes. So if you're sitting in Silicon Valley as a tech worker, you see that these immigrants bring tremendous dynamism to the economy. However, if you're in a low wage job, maybe low skill service, then the you know, a lot of this immigration is competition and it creates wage pressure for you. So this is why historically, the unions have not been in favor of, you know, of of immigration. You have, you know, a lot of service workers in the minority communities.
you know, there's a lot of animosity towards immigrants because of that. Fundamentally, it creates job competition and wage competition. And I do think well, so so so look, it's easy for us to sit here in Silicon Valley where we sit in the economy and say, oh, well, let's just have unlimited immigration It doesn't matter. Well, yeah, it doesn't matter to us. But if you're in the low school part of the economy, it does matter a lot to let in a flood of immigrants who are in that low category.
And by the way, we're worried about these jobs getting automated away as well. So, you know, I think you have to have a sensible policy I mean, yes to immigration, but I think you have to think about how much sort of low skill immigration can we assimilate and absorb
Right? But aren't a lot of those people who are coming in also then taking lower wages because they're off the books and they're illegal? Whereas if we had a more reasonable policy of letting whatever percentage in. Like, we could just pick a number. And if that actually worked and they were getting paid on the books, then it would remove some of that downside pressure.
So you're not paying somebody under the books to be a delivery person or a dishwasher or whatever the entry level job is. they have to get paid that minimum wage.
Jason, I think this speaks to the broader kind of set of political topics, which relates to the enablement of competition. And and it speaks to some of the trade policy points that I think the last administration made, which is to limit trade and to limit access to global markets to to provide services and products to the United States and to tax them, because the lower cost labor ultimately outcompetes with higher cost labor in the United States. And so, you know, you get lower cost goods, but the balance is is it worth having lower cost goods and services where you could actually see too much of a decline in the employability or in the wages of people that are currently producing those goods and services in the United States. And that's the tricky balance. Right?
There's no blue or red right way to do this. we wanna enable competition. We wanna enable progress. We wanna enable lower cost of production, lower cost goods and services, but we also don't wanna have the economic impact and the social impact of people being underemployed and unemployed. And bal balancing those 2, one of the tricky pieces of that balancing puzzle is immigration, another one is trade, another one is regulation, etcetera, etcetera.
Right? So a lot of these things kind of drive that that that tricky balance.
I really bounce around on this. I of all of the four of us, I was the only one that immigrated myself. So I didn't you know, it's not that my parents did it.
Oh, you did? Yeah. Yeah. Okay.
I did it myself. I drove to the border. I got a TN visa stamp. You know? I crossed the border into Buffalo.
I stood in line. I got my own Social Security number, and I started a life in America in in in the year 2000.
How old were you?
22, I guess, or 23?
You had a job lined up already?
I had a job. I had a job offer. I had my offer letter. I did the thing. Then I transferred on to an h 1b visa.
I had to go through all of that. Then I had to, you know, wait in line. I got delayed. I had to refile. So as a person that went through the immigration system and finally got their green card in 2007 or 8 and then my my citizenship in 2011 or 2012, I bounce around on how I feel because I remember the insecurity I felt in not wanting to lose my visa and have to leave and go back to Canada, And so if somebody was in that situation, I could see why, you know, they would get very agitated if they saw a lot of immigration being lumped into one broad brush.
Right? And because if you if you look at it actually, there's a there's a really interesting conundrum because it's not like immigration is a thing where all immigrants are pro immigration. Right?
That's right.
It's actually not that at all. It tends to be sort of cultural elites are pro immigration because it's a it's a synthetic way showing openness and open mindedness. But then, you know, in inside no. Right? I mean,
it's true.
It's a because they don't they don't get affected by
it doesn't get affected. Exactly.
If anything, it makes it easier for them to maybe find people to hire.
Well, at someone that lived through it, what I would say is it it you know, if I was still waiting for my green card and waiting in line and having the idea that there was some amnesty program would have made me feel very insecure. I'm not sure how I would have reacted to it. But in that moment, I would have felt insecure. So the the broad solution to immigration is you have to separate the two problems and say, This part of the problem can be solved almost like a professional sports team which is to say we have the ability to draft every year the smartest and most interesting capable people that wanna come here and work hard. That will probably, you know, it'd be a rising tide.
Then there are these 2 other buckets. Bucket in the middle is just compassionate openness. You know, family members and other people, refugees, you know, because I was emigrated into Canada, not in the first bucket because we didn't have much to contribute economically, but in the second bucket, which is for social justice and refugees. And then there is a third bucket which is there are people that are not going to be in a position to wait in line. They are going to come to the border and we have to have a mechanism of saying, okay, You shouldn't have done it but you did and now here's a pathway where you can earn the right to prove that you should be here.
And I think that there there there is but we can't have that nuance because nobody wants to hear it. You wanna lump it into 1. You know, this is where, for example, like last year when Trump you know, decapitated the h one b program, I thought this is just so dumb. Yeah. No nuance.
It's it's basically telling, you know, like, it's forcing a star athlete, you know, to go and play a different sport. Why would you do that? You know? And it's so artificial. It doesn't make any sense.
But it's such a reasonable there's such a reasonable discussion to had here to be had here because other countries have solved this exact thing with the point based system. Australia, Canada, New Zealand, and others have all worked on a system like this, which is you get points for each of the qualities that you bring, and then you put some numbers on it. But there is no difference.
--
check out. Those countries are much, much harder to get into than the United good luck getting into New Zealand. You better buy a property or something like that.
It might be that the point based system is letting in the people that make the society stronger?
No. Canada has a really progressive view on this. I mean, they have a point based system, but they do a lot. They're really compassionate about You know, the they'll take in a lot more refugees than than most other countries. And I think that that they've never lost that spirit.
And I think that the point is, I think I agree with Jason. It's possible. It's logical. The problem is it's too logical. And, you know, you you Let's memorize it.
It's like the math.
I I yeah. Friedberg made an interesting connection to the issue of free trade. So, you know, look, you know, I majored in economics in college. You know, I I was, like, a believer in free trade. Like, sort of completely ardent free trade because why it creates economic efficiency.
And so, you know
It's logical.
it's logical. And if people lose their jobs their factory closes because -- Yeah.
--
we're not as good, then yes. This you let it just fall where they may. I think what we've learned over the last 20 or 30 years is that we have to consider the distributional consequences of a policy like free trade because it's about Well, who benefits and who loses? And, yes, American consumers have benefited from the flow of cheap goods from China and other places, but we've seen our manufacturing
--
American precursors have lost.
--
have lost. Yeah. And so throughout the the Midwest and the rust belt, You've got these empty factories. They just line up like like tombstones up in, you know, places like Detroit. And and you've got the you've got these towns that used to be factory towns that are now just kinda empty and the people are, like, hooked on fentanyl and it's a social disaster.
And so I think, you know, what I've kinda learned about this is you have to take into account the consequence of these policies, and it can't just
be about
-- --
evolved your position.
I have. It can't just be about a Darwinian economic efficiency anymore. You have to think about Who who wins and who loses?
And by the way, what's what's ironic?
Everybody's got everybody's got feedback on this week. What's ironic? It's mop at me.
a lot of the current globalization policy that the United States embraced over the last 2 or 3 decades. I think, Saks, correct me if I'm wrong, but a lot of this originated during the Clinton era, which was, you know, a Democratic president. And then ironically, the free trade Republicans are the ones who have flipped over the last couple of years to realize the economic consequence on the production side of the United States is so severe that we need to now limit free trade. And if you remember Paul Ryan, you know, who was the house speaker a few years ago, had this 6 point plan for the Republicans going into the primaries. And one of the key points was to, you know, enable the transpacific partnership.
They were trying to continue to push free trade And I think that the policy shift is ironic because it's always been kind of a red issue, then it became a blue issue, then it became a red issue. And I think, you know, like everything, we are evolving our points of view as we experience and learn more things and get more data and perhaps the rate of progress isn't the thing to optimize for, but the rate of progress balanced against the equality of progress seems to be where the United States is at right now.
To respond to what what Friedberg said about about how this happened. So there's an old saying in Washington that the best sorry, that the worst ideas are bipartisan. And the idea of bringing China into the World Trade Organization and giving them sort of MFN trading status. That happened under Clinton, but it was absolutely a bipartisan decision. And part of the reason why our politics are so royalty.
Well, it was proposed it was proposed Clinton. It was passed Bin Bush.
Right. Okay. But they both supported it. It was a bipartisan sort of disaster. And I think one of the reasons why our politics are so royal today, you've though you've got this populism on the right and you've got a populism on the left and that where they both agree is in restraining is having a more protectionist trade policy.
§06Segment 6
That's right.
So so I think so I think a little bit of history here is important. I think you got most of it right, but If you go even one step back under Clinton, there was nothing that they actually did, but it was something that Deng Xiaoping did. which was that, you know, for a large time, I think until the mid nineties 94, the Ramin Beak was firmly pegged to the US dollar. And, you know, it was like, you know, 5.8 renminbi to the US dollar. And all of a sudden, they basically said, well, look.
We have this hapless economy we have to do something about it and we have this enormous bulge of young people. And so they did this brilliant thing. and China said, you know, we're gonna basically devalue our currency and they're gonna basically make it essentially float. And instantly, you rerated the currency by 40%. And over time, it rerated by almost 60%.
And what it did was all of a sudden it unleashed, as you said, all of these subsidies into the United States. Why? Because now Chinese goods became 30% cheaper. Right? And then the Thai goods became 30% cheaper.
Indonesian goods became 80% cheaper. Right? Vietnamese goods became 50% cheaper. That's that's that entire contagion in Eastern Asia that we went through in the late nineties. So it's like China devalues their currency.
All of a sudden, you have all these young people in China who can make things for 30% cheaper. You're able to flood the American market with goods. We were like, wow. This is incredible. My jeans that caught $10 now cost $7.
I'm just using it as a representative example. I'm just gonna buy more jeans. And so you're consuming consuming consuming, consuming,
All of
a sudden Bush comes along and says, well, you know, this seems to be working out well. I wanna go to war with a rock. I need to basically get China to vote yes and the security council. Okay. What's it gonna take?
China's like admit me to the WTO because even during all of this, they were still not part of the WTO. And to David's point, and that's when the nuclear bomb went off in 2004. You know? The minute that they were involved and they could actually have bilateral trade relationships and normalized trade relationships. Then all of a sudden the next wave happens because instead of just buying cheap Chinese jeans, Every American company was like, wait a minute, I can drive up earnings by just exporting this factory to China writ large.
And the Chinese had all this capital that they had built up all these US dollars to then support it and subsidize it.
Well, it's a prisoners dilemma. Right, Shamoff? Because if you don't do it as an American company and you don't move your manufacturing there. And everybody else does, your
shareholders, your shareholders will decapitate your stock price. You're you know, as a CEO, you get fired. And so so then that's That's when David that what you said happened. That's when you hollow out. From 2014 to 2016, you hollow out the middle class, you hollowed out the inside the rust belt, And then basically, you deindustrialize the west.
You saw the rise of populism. You saw the rise of opioids as essentially a coping mechanism for people's inability to even work hard to have purpose.
To have purpose, Jamoff.
Americans are wired to work hard.
Right. And
so they need to self medicate if you can't let them work hard.
Yeah.
They turn defense and Illinois to do it, and then all of a sudden, Donald Trump gets elected in 2016. So what if we a
man without hope is a man without fear? You know, you give people no job and no purpose in the morning. What happens?
And the democratic party's turn to socialism. I think that's, like, part of it as well.
So this is really interesting because we're talking about second the sec I think everybody who is doing this was considering the second order problems. And what we're experiencing now is the 3rd order problem, which is things that people couldn't predict like we we now have a communist country that is not changing its human rights record and is not changing its behavior and might even be getting worse And we've enabled them.
China, but date but Jason, China, China will actually self regulate. I I actually think now The China issue is a little overblown the way we take it. Meaning, I think China's central planners are frankly just much, much smarter than ours. Right? They just are.
Well, they have simple planning.
And they have better tools.
They don't they don't have they don't have a domain.
Obviously, it's an Olympic system that's just reactionary to their -- Yeah. -- the
--
or any legal system. They have no legal system.
That should scare us that there are more effective planners than than our than our politicians.
But here's the thing here's the thing that smart policy can't outrun though. It cannot outrun demographics. And the most important takeaway that I learned over the last few weeks when I was studying this problem. because I've been thinking a lot just currently like, okay. Inflation, what's the 10 year view, what's just gonna happen like what's my macro view of the world.
And I saw the most interesting stat which is the median age in China and the median age in South Asia is greater now than the median age in America. So it's in the mid forties versus the mid thirties. And that's an enormously important thing because now you have an aging population in China. You've had this one child policy that's really has worked against them for a very long time. So they have they have an underrepresentation of these young people.
And so you're flexing now to managing a demographic shift where folks are older. They're not going to work in a factory. they're not making goods the same way they used to. Economic growth is tapering. And so that whole China situation, in fact, demographically, is gonna solve itself But the implications for America are not good.
Meaning, I think inflation goes up, commodity prices go up, prices of everything go up, But it allows us to actually reestablish and rejuvenate the the industrialized rust belt of America. We just have to spend the money. And this is where I think, like, when you look at Biden's plan, this is where I've I wonder, like, didn't anybody do this simple macroeconomic you know, trace route to actually come up with this because it's pretty obvious what to do. And then you wonder, which is why I mean, have have literally a $1,000,000,000,000 allocated to reestablishing entire supply chains across critical industries that we wanna own.
Which I think, Friedberg, you brought up, what, 15 episodes ago that this is an incredible opportunity for us.
I think manufacturing here, bring the next generation. And reinvent manufacturing. I still think bio manufacturing represents this this complete a great domain where the United States could build and lead, you know, I'll just give you some statistics. Globally, there's about 25,000,000 liters of fermentation capacity or biomanufacturing capacity. Of that, about 20,000,000 is used to make beer and wine and pharmaceutical drugs today in a in a closed system.
5,000,000 is available for rent, and of that 4,000,000 is already rented out. So there's only a million liters of capacity really available for rent. there's a 100 synthetic biology companies that are looking to produce fermentation based products from materials for clothing, to food, to animal protein, to new drugs, and they can't get the capacity to make this stuff. And every one of them is scrambling around Silicon Valley looking to raise 100 of 1,000,000 of dollars of funding to go build frigging manufacturing capacity for bi manufacturing. This is where the United States can lead because we can make every material every drug and every consumable that the entire world would use using biomanufacturing.
And just to be clear, biomanufacturing.
--
effing go.
And so you edit the DNA of an organism, and it can be programmed to make a a molecule for you. And so we can use large fermenter tanks to make this stuff. I did the math recently, and you would need about 10 to 50000000 liters of capacity to make all the animal protein for the entire world. And using 45,000 liter tanks, which are three meters wide each, it would take about 30 to 40 square miles of fermentation tanks to make all the protein for the whole world. We could build that in the United States for about 3 to
4
for about 3 to $400,000,000,000. and we could build it in a couple of years. I mean, that is, like, a moonshot. You could also make materials for clothing. You could make -- Detroit.
You you could make bio glasses.
Put it there.
and and this is like this the and because today, the science exists. Like, go back to, like, the Internet era. We now have this ability to program organisms to make stuff for us. This did not exist 10 years ago, 15 years ago, 20 years ago. Today is the moment it exists.
So if we don't capitalize on this huge budget to build infrastructure to go after this massive opportunity to make everything that the world consumes, we're gonna miss out and and free markets will compete us away. This is the one time that big check can be written, and that big check can enable this new industry. And instead of making cars and making, you know, all the stuff that maybe we don't need to be making anymore.
--
really think that all this trillions of of infrastructure spending is going to what you just described?
That's my point. It's not. That's my point. No.
It's not.
That's my point. And I think that that that but that that that's what I mean is we're we're missing this opportunity.
We're rebranding the same old social programs as infrastructure because The politicians know that's one of the last categories of spending that's still popular. I mean, it's not gonna go to the right things.
It does. It does. Those labels those labels pull well. When you say jobs, Like, for example, one of the things I learned, which is insane, is that for whatever reason, people think fixing climate change is a net negative because it it it will restrict one's way of life and destroy jobs. Whereas in fact, it's the exact opposite.
Right.
It should actually allow you to do more, live healthier, and there should be an an entire renaissance of industries and jobs. And so it goes back to the disinformation just makes a rational conversation almost impossible.
Sweetie, politics. We just shift to Caitlin Jenner real quick before we wrap because we're almost out of
Caitlin Jenner is officially running for governor, and I guess people are making light of it. But Saks, you you actually wrote a considered post on it. so unpack it for us.
Yeah. I was defending Caitlin Jenner. I mean, look. I mean, the the what Caitlin Jenner came out and said is that Gavin Newsom's DA's Chasey Boudin and George Gascon in LA are presiding I'm putting words in her mouth, presiding over a crime wave. and she was calling him out on that.
§07Segment 7
And what you then immediately saw was all of Gavin's people come out and criticize her for being stupid because supposedly, she didn't know that DA's were locally elected. Well, I think a couple of points there. First of all, why hasn't Gavin Newsom come out and distance himself from Chase of Budine and George Gascon and what they're doing in those cities. He hasn't done that because he's been cozying up to their side the the sort of progressive extreme radical decarcerations wing of the party. And the reason we know that is because he he recently had a a job to fill, the attorney general spot in California.
He could have chosen anybody for that job, and he chose an East Bay assemblyman named Rob BonTA for it, who is an ally of Chase of Woodin and Gascon and this progressive DA alliance. And so, yeah, it's true that Newsom didn't appoint these DA's, but he's appointing their allies to post their even more important the, you know, the the attorney general of all of California. And so I think it was a very legitimate issue for Caitlin Jenner to come out and call out Gavin Newsomont. And I think she's on to something here, which is there's a lot of issues in California. There's a lot of things that are wrong from homelessness to unemployment and these crazy COVID restrictions.
But the number one issue, I think, has to be crime. We are seeing explosion of crime in our seat in our streets. We all know there are large parts of LA and San Francisco that we do not feel comfortable walking around in anymore.
Oh my god. You'd be crazy to walk down the street with a child.
The the the livable area where you can where you feel safe living or opening a business or walking around has drastically shrunk in the last few years. And if you do not feel safe in your city, nothing else politically matters. the government's first responsibility is to protect its people. And I think if Caitlin Jenner can keep speaking out on issues like this, I think maybe she has a shot.
Yeah. I think that she's got a credible shot. If she has a reasonable economic policy behind it and, you know, this the school voucher thing on education, Those are the things that'll carry California voters because I do think and by the way, here's where I think we should take some credit The best thing about this podcast other than the fact that we used ourselves to keep us sane, it's it's made it it's made it fashionable fashionable to think independently again. And eventually, what becomes fashionable becomes the rigor. And what that means is I think that there will be more and more people that will think for themselves.
And if she has reasonable policies and a platform that's understandable, she can win. And that's an incredible testament, I think, to people making their own decisions.
And being able to have a reasonable conversation with people with different opinions, I think, is the other takeaway from the podcast that people always give me that feedback when when they see me on the street or whatever and talk to me about it. And as a as a point, going to Austin, they are now dealing with tent city problems like LA, and the same problems that that they're dealing with we're dealing with in San Francisco. So I went for a walk around the lake a couple of times. It was great. And, you know, there were a lot of tents, and they're literally taking the most beautiful lake in the entire beautiful part of the city and it's becoming camp central.
They're they're basically ruining it for the the actual citizens who are not homeless. Austin lifted the 10th ban they had in Texas. Now Texas is voting now. The entire conversation when I was in Austin, all conversations did not go to NFT's crypto, the board or anything. It went to tent city.
And people in Austin who are very liberal were saying, I'm voting to ban intensity. I'm voting I'm voting against, you know, this insanity because it's we don't wanna become San Francisco. We don't wanna become LA. So the and these are liberal people. And the the concept that a city would allow people to camp in the center of the city and ruin it for everybody else is insane.
port. Portland's version of Amsterdam is still up and running. It's been a year.
I mean, if people wanna camp we have campgrounds for that, send the campers to the campgrounds.
Can I tell you the secret origin story of Miami? and why Miami is now a tech hub. It's because of this issue. It's because a tech entrepreneur got punched in the face by a homeless person in San Francisco. I don't know if he'd want me to tell the story.
I'll find out afterwards, and you can peep out his name. But, basically
--
who is a prolific tech founder. He's got I don't know if you'd want me to tell the story, but he was out just
--
We do do two beeps. It's fine.
We'll do two beeps. Anyway, he was out walking around San Francisco. and a crazy, homeless person, just walk up and punch him in the face for no reason. And this is something this homeless person has done many times. The cops were there.
It just kinda shrugged. didn't wanna prosecute it, didn't wanna write up a ticket. He's like, no. I really wanna press charges. So the cops like, okay.
Fine. So then, you know, he presses charges. Nothing happens. The d a office basically keeps, you know, giving him the run around until he basically says, fine. Forget it.
He drops charges, he just moves. He just votes with his feet. So he moves to Miami. He was the first one from that sort of like, the sort of the core, like, Silicon Valley plugged in ecosystem to move out to Miami. He says he he did the seed round.
Then he talked to Keith Rabboy And he's the one who convinced Keith Raboy to move to Miami. So Keith Raboy then is
--
Series A.
--
he did the series a to was the c divested of Miami, and he got Cavoy do the series a. And then, Ravoy, you know, he's very, you know, prominent and loud on social media. He's been evangelizing the whole thing. And then he got De Leon and Founders Fund and their whole noise machine to move, you know, their circus to Miami. And now look at it.
Don't get
it. But
it's it's this
I'm here.
Now it took it it they've got a mayor of Miami Francis Suarez who actually said, we want tech here. Right? You know? And they don't they don't have a homeless problem. The city has a lot of cops.
It's well managed. So, look, he's got the right environment, and and most of all, the city of Miami is welcoming to the techy ecosystem where San Francisco, the politicians seem to can't wait to get rid of it. But it's all comes back to this homeless issue. I think if if -- gotten punched in the face by the homeless person, I think this all would have played out very different.
Mhmm. It's very, very true.
Let's wrap on a quick fang. I don't you must have seen every single major tech company had a massive blowout quarter. And and when I say massive, I mean, unbelievable.
And -- The 5 the 5 tech companies now collectively this year will make more than $1,200,000,000,000 trillion with a t of revenue. If those 5 companies were a country, it would be the 14th largest country in the world. Wow.
We're not talking market cap here, folks. We're talking cash in the bank account.
Just revenue. No. No. Just revenue. Revenue.
Right. We're not paying profits.
Which is which which I which I think is a good proxy for GDP. And so the point is, you know, if these companies were Countries, collectively FANG would be a top 15 country. And And if you and so I guess, really, what we've learned is what we've known, which is, okay. These are monopolies. They have pricing power.
Unfortunately, Facebook had to actually even disclose that, you know, inventory only grew by 12%, but prices grew by 35%. you know, Google basically showed the same thing. And if you go back to sort of like the pillar of antitrust law, which is at 1970 odd Supreme Court case, it defined what's called the consumer welfare test. Right? So so, you know, the FTC and DOJ, there relatively toothless in the face of companies cutting prices, but they can really act when companies raise prices.
And here's where their definition of a monopoly, which is brittle, it doesn't account for 20, you know, 2021 tech companies, does come into play because now you can see that they're that they're winding up their pricing power if they can raise prices. Number 1. The second thing that I'll say is the Apple Facebook thing is a very important canary in the coal mine as well because it's not as if the 5 of them can actually work together. There's infighting. Right?
And so -- Yeah.
It's Game of Thrones.
Well, with this new update to iOS, you know, what those dialogues will essentially do in my opinion, if I had to guess, is limit inventory. Right? So Facebook and Google will have fewer ads that they can actually run-in a targeted way. And so the the only way that they can keep then growing revenue with fewer impressions is by raising prices even more. And then the last thing I'll say is, you know, this complicated dynamic between Apple, Facebook, and Google is that Google still pays Apple almost 70 or $80,000,000,000 for search.
whereas Facebook pays them nothing. So if you put all these things in a box, I think you're gonna see the beginning of the end. This is where now you can see the end game come into focus, which is -- Red
Wedding?
Well, you don't need necessarily new laws in section 230, although we'll have that. you now see Fang M moving into the line of sight of the traditional antitrust framework because now they can use very traditional you know, any competitive pricing law to go after these guys.
I am gonna I'm gonna strongly disagree with Chamath. Okay? Adam, I've not disagreed with Shamoff this strongly since we've done the podcast. The the the reason I strongly disagree is because this is not inventory that is being sold at a fixed price where the price is set by the company. Facebook and Google, in particular, run an auction model.
They are a marketplace business. They have advertisers who show up and they bid on ads, which is the inventory that they're able to get based on the data that they're able to match to that particular ad slot. if the advertisers can get more value by bidding a higher price because of the data that they're getting that shows that this customer is more likely to click on the ad and ultimately buy something, they will bid more for the ads. What has been such an incredible juggernaut of a business for both Google and then Facebook, which was effectively a mimic of Google system, was this auction model. And the innovation has been in getting more data as you as you track consumers around the Internet.
§08Segment 8
And secondly, is in the smart ad targeting, which is where the algorithm figures out which ad to show the consumer based on whether that consumer is likely to click on the ad or not. And the more consumers click on the ads, the more advertisers are willing to pay for an impression because that ad is now gonna con that ad is now gonna convert to more revenue for them. that is why this is not a monopolistic approach to pricing. It is an auction approach. And and and I think and it's why they've won in the past over this argument.
But, yeah, go ahead. I I could Go ahead.
At Facebook, my team was the one that built it. So I I oversaw those guys back in 2008 and 9 when we did the first version of it. Obviously, it's gotten much more sophisticated than you're right. It's a victory auction. And literally, my mandate to the team was, I don't want your innovations.
Copy Google. and give me a version of what Google looks like and we're gonna implement it.
Yep.
There's a problem. It's not exclusively that. Ads are not sold entirely based on that system. Ads are sold direct via a team. So for example, when Budweiser writes a $100,000,000 check or Procter and Gamble, they're not necessarily stepping in the auction the same way as small and medium sized business.
And if you look at how Facebook and Google have oriented their policy, they've only highlighted those people because David to those people, you're absolutely right. There's a very legitimate market clearing price argument for them. But there are an entire class of advertisers that come in over the top
brand advertisers.
Yeah. That gets structured deals, that gets structured APIs, they get structured access, and Facebook is, and Google is setting price. and Microsoft is setting price. And so this is where that's the entry point. Because at the end of the day, an impression to David Friedberg Whether it's seen by the local taco shop or Procter And Gamble, some of it will be a victory auction, some of it will be structured in inventory, it's a convoluted mess of the 2.
You can't tease it out.
You're right. At the end at the end, it's about getting CPM higher. Right? It's about cost per 1000 impressions. but it's a long I think this is a little good conversation for us.
This is
this is episode 31. For the podcast.
I would I would love to talk about some of my early days at Google and how we made some of those decisions because I think it's it's instrumental to how this is designed to be ultimately a system of commerce efficiency that's really important not just a system of selling ads. But let's talk let's talk about it later. Yeah.
Okay. As we wrap, most impressive observation from these quarterly reports that just came out. For me, Amazon's ad business,
24,000,000,000
growing at 77% year over year. On top of their Amazon Web Services business,
it'll be bigger than AWS in 3 years at this rate. Yeah.
What's every else's what's everyone else's -- That
to me was. Yeah. Woah.
What was the most impressive thing for the rest of you guys on on all
the earth? -- a lot of things here. I have a second, but go ahead.
Yeah. It was unbelievably impressive, but we have we have 4 enormous monopolies on our hands. And if I was a betting man, end of decade, these 4 monopolies will not exist.
Oh, broken up.
Yeah. By the end by the end of this decade, so
2030.
Yeah. Okay.
Long back.
I'm willing to bet you dollars to doughnuts.
That what? They they they face breakup?
I'll bet a couple of doughnuts. You bet a couple dollars.
Okay.
And we'll
--
Give the doughnuts to Saks. I'm off doughnuts.
Sachs, what
was your Saks, what was your takeaway?
Well, I mean, I would uplevel it slightly. In in antitrust, there's historically, 2 schools. There's the Bork School And the Brand Eye School. Bork was narrowly focused just on consumer harm and would be closer to, like, the Friedberg position. the brand I school is more about concentrations of power.
Right. And would be more concerned about, you know, not letting people get too powerful in this American democracy. And I think the interesting thing is now that there's folks on the right who definitely are buying into the brand high school because of the restrictions on free speech and access to the marketplace of ideas that companies like Amazon actually, all of them, Amazon, Google, Apple, Facebook have all imposed. They're they're limiting people's access to the marketplace of ideas. So I think now it's really interesting.
You're seeing a combination of both the right and the left get together saying these companies are too big. They're too powerful. I think the Republicans are saying, well, let you keep the money. We're not gonna take your wealth The Democrats are saying we're gonna take your your power and your wealth. The Republicans are just saying we wanna level your power a little bit.
But I think, you know, these forces are gonna come together And I agree with Shamoff. I think I don't know exactly when, but I think these companies are gonna get broken up and knocked down because they are too powerful.
It's a good it's a good it's a good counterargument, Saks. I mean, the other that that that more important point of view of power versus, you know, economic harm to consumers is a is an important one. Clearly, there's no accounting for that quantitatively, and politics will drive it. My I I think, like, it it's just incredible. I mean, if you guys think about it as a consumer, I mean, how incredible are the products that Alpha that Amazon and Apple have made?
I mean
-- --
free and all free.
They'll still exist if they get broken.
--
mean, even the even the iPhone, like, ordering stuff on Amazon. Every day, I'm amazed and I marvel at the world we live in at the shit that we can do with the click of a button, I it is such an incredible world we live in because of these businesses. So as much as we can hound them for all the
wealth and monopoly. Here's the problem here's the problem is that Apple and Google in particular have a monopoly on the applications that can exist on these these incredible phones.
Yes.
And if you can't get access to the App Store, you You can't exist as a app. And, frankly, you can't really even you can't even have a business in the modern world if these guys cut you off. And so we already saw a congressional hearing very recently in which Spotify and some other apps were testifying against Google and Apple because -- And
the Apple tax.
Because, yes, because these platforms were discriminating against those applications in order to benefit themselves, and I think that in particular has to be looked at and I think eventually stopped.
Two things two things. Apple just got sued by the EU today. So they got slapped with antitrust for their app store. So that's gonna sort itself out as well. So you have all this, as Jason said, Game of Thrones.
I wanted to read to you guys something. Justin just put it in the chat This is something I said to Brad Gershner in 2019 when we were he was interviewing me for something. And I think it's it's even more true today than it was in 2019. I said the following. I said, my perspective on Facebook is the reason why the market gives it a small multiple because by the way, you hear this all the time like, my gosh.
These companies are so cheap. Why are they so cheap? I said, The reason why the market gives it such a small multiple is because they don't believe the market. The market doesn't believe that their earnings potential is durable. Because the market is sure that in the next 10 or so years governments will start to act because they care about their own self preservation.
So if you get very reductionist, at the end of the day, that's what governments care about, and so they're going to legislate to protect their monopoly which is the ability to have power.
Alright. There it is, folks. A shout out from Chamath to Shamov in
2019.
Shout it out. I'd like to give a shout out to myself. I told you, Jason.
No, Jason. I would like to do this
Don't hurt your arm, patting yourself on
the back so hard. You gotta stretch
that out when you're functional stretching on Sundays. I get my functional stretch on. Love you, besties.
King, bestie. When are you guys coming back, please? Can we play poker now that we're all vaccinated, please? I might have
to I might have to go to New York next week to just round out my threesome tour.
--
book the can we book the Miami trip tomorrow? Let's let's go out there.
We're no. We're doing a live show. Oh, big news is coming, everybody. We are going to be putting up a voting mechanism you're gonna be able to vote with your dollar with a tiny donation to see all in live, whichever city gets the most donations. I think we're gonna give you.
Alright. I'm just going to Miami.
But where where are we where are we gonna donate the money to? Have we decided that?
Or
--
I mean, I I think it should be something in relation
-- --
play poker and the winner or, you know, do the single hand PLO, and the winner gets to decide the charity of their choice.
No. I like that.
I like that. That could be fun. I mean, I think something that we've always
agreed on.
Can we just decide to sell tickets in Miami and New York and be done with the show? Miami. Miami.
I know. I think Miami and New York. We could just do a 12. I mean, it's a hot quick jump.
Chamak, you decide the date. Well, the rest of us will make it work. These guys
are End of May.
End of May.
We're gonna pick a date. We're gonna go to Miami. We're gonna do the first taped live all in, and we're gonna we're gonna sell tickets for,
like, 5 or 10 bucks a day.
All the proceeds go to charity.
It's gotta be more, like, 50 or 25 because of the venue because we have to the venue's gotta get there, Vig. But, anyway
--
Oh, god.
--
love you besties.
Love you, guys.
Love you, Friedberg.
Love you, Chees.
Most of all, everybody.
Love you, Jake.
Love you, Jack.
Love you, Jack.
Back at all. We'll see you all next time on the all in podcast. Bye bye. here when there's a ride. Rainman, David Sachs.
And I said -- We open sources to the fans and they've just gone crazy like that.
That is my dog
driveway. We
should all just get
a room have one big huge order because they're all just useless. It's like this, like, sexual tension
that we just need to release somehow. What?
You're the bee bee. What?
Pure feet.
What? Where did you get Merckies are back?