SPEAKER_03: What's called a Sax LP meeting? Is it an LP meeting or are you going to lunch with Peter Thiel? Oh, the lair food? What's going on? It's 9 a.m. You must be... There must be a call going on here. It's not a Sax, it's not a It's a ditch, Sax.
SPEAKER_04: Every week, but Chamath is in Italy, another button gets undone. This is definitely...
SPEAKER_03: Hey everybody, hey everybody. Welcome to another episode of the All In Podcast, episode 36. Back with us today on the program, the Queen of Kinwa, science. Spectacular. Friedberg is with us again with leading off last episode Friedberg with a great Friedberg science monologue. The crowd went crazy for it. How does it feel coming off that epic performance in episode 35? Tell us what were you thinking going into the game? And yeah,
SPEAKER_04: Well, I was thinking I would talk about the Alzheimer's drug approval at Biogen. I felt like I did it when we were done. Great.
SPEAKER_03: Yeah, it's just it's like literally interviewing Kawhi Leonard after like a 50 point game. Okay. And with us Rain Man David Sax with layers for players. He's been styled and groomed. And he's in some random hotel room. How are you doing Rain Man? Good, good. I'm not I'm not in a hotel room.
SPEAKER_00: Oh, your home just happens to look like a five star resort.
SPEAKER_03: Got it. Forgot that. And give us an idea coming into today's game with the layers. With the layers. You obviously are here to dominate and get your monologues up. Gotta be hard for you to look at the stat line and see yourself trailing in monologues behind the dictator. I'm referring to all in statistics. Yeah, where some maniac is breaking down how many minutes we each talk per episode.
SPEAKER_00: Jason, I'm really happy with my performance. For me, it's about quality and quantity. I like to stick and stick and jab. Okay, got it.
SPEAKER_02: Got it. What are we talking about right now? What what what?
SPEAKER_05: What is the dictator? What the hell are you talking about right now?
SPEAKER_01: Twitter account done.
SPEAKER_03: You know how the the all in stands have a ton of skills. Like there is an audience for this podcast that has more skills than you know, it's like the 5% of the most skilled people in the world listen to this podcast. So in addition to doing the merge, in addition to doing who's the guy Henry who does all those incredible videos with animations. In addition to those, Henry bellcaster crushing those things are great. Those are amazing. And then of course, you have young Spielberg who led the charge dropping incredible, incredible tracks. And now we have this new crew that is analyzing. Somebody put, you know, we'll put in the show notes a link to it, but they do some type of AI analysis of the audio files, and they tell us who had the most monologues, and then the running time and then historic running time. So they're actually looking at it trying to figure out you know, who is speaking the most and they thought freeburg was going to run away with the episode, but it kind of disappeared in the second half of the game. And Shammoth obviously came around the corner and took his 27%. But they live a pie chart of how much we each talk. I have I always have a very strong first and third quarter.
SPEAKER_01: Yes, absolutely. Yeah. And then he gets frustrated when he passes the ball and somebody misses a shot.
SPEAKER_03: It's kind of like LeBron in the early days. So kicking off today, Lena Khan has been confirmed to the FTC with bipartisan support interesting. And this is obviously going to be a challenge for big tech. On Tuesday, the Senate voted 69 to 28 to confirm Lena Khan, who is a very well established critic of big tech. And this is obviously really unique because she's 32 years old. And she's leading FTC, which is unbelievable. I did a little research on her and watch some videos. She's basically written two amazing papers. And the first paper came out in 2017. Amazon's antitrust paper, the second one came out in June, and was about the separation of platforms and commerce. And when you hear her speak, she is incredibly credible and not so much credible and knowledgeable. It is as if one of the four of us were discussing this, she could come into this podcast and speak credibly about Amazon's businesses, as opposed to the charades we saw at different hearings where the senators and Congress people just absolutely had no idea what they're talking about. Some of the items I picked up from a talk she gave in Aspen is that she, she formed a lot of these opinions by talking to venture capitalists who were concerned about Amazon's dominance and other companies and the competitive space and she is looking at consumer welfare, one of the lenses of antitrust, which will I'm sure David Sachs will have some thoughts on as our resident attorney here. And the framing of those in terms of harm of the consumer, she believes there's other harm that happens. And she thinks one remedy is to kill Amazon basics, because the marketplace shouldn't own the goods as well. She's concerned about cloud computing consolidation, because that creates fragility. And that is another type of consumer harm, while she freely admits that prices have gone down services are free, and this is a consumer benefit. So she wants to rethink the entire concept and she is savvy. She brought up Facebook buying a novo, the reportedly spyware VPN to give them a little advantage as to what was being used on phones, and maybe give them a little product roadmap information. She also brought up Amazon studying the sales of other products to inform Amazon basics, a claim that Amazon says they don't do. But everybody knows they do do because all that information is publicly available. She talked about Amazon's VC arm, using data to invest in buying companies, why wouldn't they that makes total sense. That's great signal for them. She seems to want Amazon Web Services spun out, which I think would just double the value of it, or maybe at 50% of the value of it. And she gave very pragmatic examples, like maybe separating Google Maps from Android. And when you turn on your Android phone, you would have to install maps or maybe you would pick from the different maps that are out there different programs and that there would be integration in them and people could swap out, you know, MapQuest or Apple Maps in their Google searches. So a lot of actually very interesting pragmatic approaches. And she doesn't think these need to be decade long lawsuits, she thinks this is going to be a negotiation, and that people will kind of work together on it. But this is all with the backdrop of partisan politics. And you know, one group of people looking at this through the lens of wealth, and inequality and another group looking at it through censorship sacks, since you are our counsel here. What are your thoughts on this appointment?
SPEAKER_00: Yeah, I mean, the interesting thing is that, you know, Lena Khan is the the Bernie approved candidate, she is liked by the progressive left, but at the same time, she got 21 Republicans to support her. And so this nomination, you know, sailed through confirmation. I think what she's saying, what she's saying, I think there's, there's a very good, good argument to it, that and I've said similar things in the past, which is, you know, what she's basically saying, especially in the case of Amazon is, look, you've got this company, Amazon that controls essential infrastructure, AWS, the whole distribution supply chain going all the way from the port to warehouses to, to logistics and distribution, that is going to be owned by a scaled monopoly player, you have a massive economies of scale, it's pretty clear they're going to dominate that. And what they're doing is systematically going category by category, and using the monopoly monopoly profits they make by owning the sort of core infrastructure, and subsidizing their entry into each of these new categories, that Amazon basics and others, and she calls that you know, it's predatory pricing. And she's afraid that Amazon's is going to end up dominating every category, every category that you could build on top of this core infrastructure. I think it's actually a pretty valid concern. I think you see something analogous happening with Apple and Google and the app stores. We had a congressional hearing pretty recently in which you had Spotify on other apps complaining about what Apple was doing to them saying they are making our service non-viable with the 30% rate that they're charging. You remember Bill Gurley had a great post about this saying just because you can charge a 30% rate doesn't mean you should. Right now we're seeing this blowback from this massive 30% rate. And you had Spotify saying, look, Apple is doing this to basically make us infeasible relative to Apple Music. So I think there is a legit point here, which is that if you own the monopoly platform, the sort of essential infrastructure, you cannot use it to basically take over every application that can be built on top of that platform. That I think is a very appropriate use of antitrust law. And I think that's the good here. Now, I think that there are some concerns or some potential downsides. And the downside that I see is that we used to judge antitrust law in terms of consumer welfare. And so there was a limiting principle to the actions of government, which is you would just look at prices and the effect on prices. Here, the sort of movement that Lina Khan represents, the so-called hipster antitrust movement, they're concerned about power. And they want to restructure markets to avoid concentrations of power. I don't see the limiting principle there. And so I think what the market share be a limiting principle.
SPEAKER_00: Well, it would be a limiting principle in terms of who you could take action on, but it wouldn't be a limiting principle in terms of how you would restructure the market. And I think what we're in for over the next few years is potentially a hyper politicization of big tech markets. I think these 20 Republicans might soon feel like the dog who caught the bumper in the sense that, yes, they're finally going to have the regulation of big tech they've been calling for. But they might not like all of the results because what could happen is a very intrusive meddling by government in the markets of technology. And it could go well beyond sort of this gatekeeper principle that we've been talking about that I think would be a valid reason to regulate. I think she has to be careful in focusing on Amazon.
SPEAKER_01: So if you break down antitrust law, there are really three big buckets where the attack vectors are. And I'm not going to claim to be an expert, but I think they're relatively easy to understand. So you have the first principle body, which is called the Sherman Act. That's the thing that everybody's looked at. And that's sort of where most current antitrust enforcement action has failed on tech companies because it largely looks at the predatory nature of pricing power that certain companies have. And you have to remember this thing was written in the 1800s. And so what did people do when they control things? They just drove prices up. Tech does the exact opposite. They constantly drive prices down. And what's counterintuitive is it turns out that in the olden days, driving prices up drove out competition. Today, driving prices down drives out competition. Yes, right. So you make Gmail infinite storage. Nobody else can compete with why switch? Why switch? You make photos completely subsidized. You make certain music products effectively free. And you subsidize that you create enormous amounts of content, blah, blah, blah. So you have the Sherman Act. Then somewhere along the way we realized, okay, we need to add something. We created this thing called the Clayton Act that was around M&A. We added to that. A lot of folks that are listening probably have heard of Hart-Scott-Rudino, HSR. We've all gone through it right on M&A events. We have to file these HSR clearances when you make big investments. For example, you know, I just made a climate change thing. We had to file HSR. And then there's this FTCA, which is the Federal Trade Commission Act. That is where she can get, you know, if to use a poker term, you know, a little frisky. Why? Because the FTCA has these two specific things, which says you can have an unfair method of competition or an unfair or deceptive act or practice. Now it falls on her and her team to basically build the strongest case around those two dimensions. And my only advice to her, I wrote this in 2019 in my investor letter as well, just thinking about the breakdown of big tech.
SPEAKER_01: If you're going to go after these guys, that's the body of law that probably is the most defensible. But you probably have to start, you know, whether you like it or not with Facebook or Google. And the reason is there are more examples how you can use that language under the FTCA to give those folks a hard time. I think it's much harder.
SPEAKER_03: The example would be Chamath that we are giving away this product losing money on it to keep you in our store and mote you into our advertising network, etc. That's an example.
SPEAKER_01: Yeah, that's or or you know, we then we then and because then when you have control, then you can show that then the first part the Sherman Act part kicks in. Why? So you've seen 15 or 20 years of Google, Facebook, less Apple, by the way, using their edge to decrease price. And for the first time in the last quarter, both of these two companies, and they were the only two of big tech that announced an increase in pricing, right? They saw a diminishing of CPM inventory. And so they had to figure out ways to grow inventory as users started to stagnate. And what they really said is we're ramping up CPMs and CPMs I think we're up 28 30% in a quarter. Yeah.
SPEAKER_03: And there's a lot of competition right now for ad space. Put these two ideas together, which is step one is you surreptitiously basically take
SPEAKER_01: all the costs out of the system and then step two raise price over time. There's probably something there. Friedberg when we look at her age and her obvious, deep deep knowledge, do you see that
SPEAKER_03: as an overall plus? I mean, obviously, if you know, David framed her as the Bernie approved candidate, but then conceded that 20 Republicans are backing her. What do you what do you think about the massive credibility she has freeberg in terms of she's actually understands this deeply? Clearly? I'm sure she's not dumb.
SPEAKER_04: If that's what you're asking. I'm not sure. I mean, it's a 32 year old. I mean, have we seen an appointment like that before?
SPEAKER_03: I mean, I don't think so. Yeah, that's good for her. Um, yeah. So I just feel like there's a bit of a cycle underway, where we have this kind of anti
SPEAKER_04: wealth, anti wealth accumulation, sentiment, as an undercurrent right now, you know, obviously, Bernie and Elizabeth Warren and others are key vocal proponents of change that's needed to keep this kind of wealth disparity from continuing to grow. And one of the solutions is to reduce the monopolistic capacity of certain business models, specifically in technology. The downside that I don't think is realized, and that inevitably comes with this action under this new kind of business model of the technology age, or the digital age is the damage to consumers. And so, you know, as as Chamath and David pointed out, like historically, antitrust has been about protecting the consumer. And the irony is, the more monopolies that are being used to protect the consumer, the more monopoly or the more monopolistic or the more market share Amazon gains, the cheaper things get for consumers. And it's unfair to small businesses and to business owners and to competitors, but consumers do fundamentally benefit. And so the logical argument she made in her paper that was widely distributed a few years ago, was around this notion that in this new world, it's not about consumer harm. And we need to look past the impact to consumers and look more at the fact that this company maybe prevents innovation and prevents competition. But ultimately, if the consumer is harmed in the resolution of that concern, we're not going to wake up to it for a while. And then consumers one day are going to wake up and they're going to be like, Wait a second. Why am I paying $5 for Gmail? And why am I paying an extra $10 for shipping to get my Amazon products brought to me every day? And all the things that I think we've taken for granted in the digital age, with the advent of these, call it monopolistic kind of business models where they accumulate market share, and they can squeeze pricing and keep people out and the bigger they get, the cheaper they get, and therefore it's harder to compete. Consumers have benefited tremendously. I think all of us would be hard pressed to say I would love to pay $10 a month for Gmail, I'd love to pay for Facebook. And at the end of the day, these models, I'd love to pay more for shipping with Amazon. And so, you know, it becomes a value question, right? What do you value more? Do you value the opportunity for competition and innovation in the business world? Or do you value as a consumer, better pricing? And I don't think that we're really having that debate. And I think that that debate will inevitably kind of arise over the next couple of years. If in freeburg, how much of this kind of played out?
SPEAKER_03: And I think to be clear, freeburg, what you're saying is this is driven by the extraordinary wealth of Jeff Bezos, Zuckerberg, etc. It's easy to pinpoint that problem, and then not involve the repercussions to consumers.
SPEAKER_04: If you try and change how business operates in a free market system, and these businesses are successful, because they have customers that like competition. And they drive in a competitive way pricing down and they prevent people from coming in and competing, not by entering into contracts and antitrust enforcement, all this sort of stuff. They're doing it because they're scaling and offering lower prices. I mean, Peter Thiel and Marc Andreessen have separately argued for this in really intelligent ways, probably in a far more articulated way than I can. But they did this early on, which is, we want to find businesses that can become monopolies. Because if you can reduce your pricing and improve your pricing power with scale, it's going to be harder and harder for someone to compete. And therefore, the capital theory is rush a bunch of capital into these businesses, help them scale very quickly. I mean, this is obviously the basis of Uber and others. And they get really big, really fast. Create the moat. Create the moat, drop the pricing, and then no one can compete with your pricing consumers benefit, and you've created the big business and you've locked everyone.
SPEAKER_03: Okay, so let me go around the horn here and frame this for everybody. Let's assume that big tech does get broken up this broken up. This is an exercise. We assume it gets broken up and YouTube and Android are spun out Instagram, WhatsApp are spun out AWS is spun out. And you know, app stores are allowed on Apple's platform, iOS for the first time, I want to know if this is good, bad or neutral for the following two people. So these breakups occur. Is it good, bad or neutral for consumers? And then two, is it good, bad or neutral for startups? Sachs?
SPEAKER_00: I generally would lean towards saying yes. I mean, a lot depends on better neutral for each party startups.
SPEAKER_03: And for consumers.
SPEAKER_00: I think it could ultimately be good for both. But it really depends on how it's done. And I think there is a big risk here that this just degenerates into hyper politicization. You get intensive amounts of lobbying by big tech in Washington. That what happens is, you have a good cop, bad cop where Lena Khan just becomes the bad cop. She's there to keep big tech in line, threatens to break them up. And then the good cop is Biden and the administration. And then they become the protection under the extortion racket. They raise ungodly amounts of money. And really, it'll be a bonanza for all elected officials, because now big tech is going to have to increase its donations even more. Super cynical. Wow. That's the cynical take. So we could end up with something much worse than what we have now. But I think the words you're going to hear a lot are common carrier. Because what she seems to be saying is, look, if you're a tech monopoly that controls core infrastructure, we need to regulate you like a common carrier. You cannot summarily deny service to your competitors who are downstream applications built on top of your platform. Conservists can get behind that because that is the argument they've been making about Facebook cutting off free speech is you are a speech utility. You should be regulated as a common carrier. You cannot cut off people summarily. You cannot discriminate against people who should be allowed to have free speech on your platform. And so I think there is I think the left and the right here can cut a deal where they regulate these guys, these big tech companies as common carriers. I think that is what we're headed towards. So bakery can deny service as we talked about previous issue to a gay couple who wants a
SPEAKER_03: cake because it's a tiny little company and there's other choices. But when we're talking about Facebook and Twitter, there are not other choices. And once you're removed, like Trump has been from the public square, there is no recourse, you are essentially zeroed out. Chamath is it good for startups bad for startups neutral, same thing for the public. It's good for consumers if you know one chunk of every company got cleavered off. It's unanimously good for startups in any scenario in which they get involved.
SPEAKER_01: And I think in most cases in which the government gets involved, it's it's good for consumers as well. And why in both cases. So for startups, it's just because I think right now we have a massive human capital ground that big tech creates in the ecosystem, which is that there is an entire generation of people that are basically unfortunately frittering away their most productive years, getting paid what seems to them like a lot of money, but is what is effectively just, you know, payola to not go to a competitor or go to a startup at by big tech. To explain that clearly, for example, like if you're a machine learning person, right, those machine learning people, you know, can get paid 750 to $1 million a year to stay at Google. And instead, they won't go to a startup because they take sort of the bird in the head, right? You multiply that by 100 or 150,000 very talented, you know, technical people. And that's actually what you're seeing every day. Now, those numbers are actually much higher, you know, if you're if you're a specific AI person, you can get paid 510 million dollars a year. My point is, they could have started a startup, and they could have and frankly, they just million, they look, let's be honest, they go to Google, Facebook, and whatever. And I don't think anybody sees the real value of what they're doing in those places except getting paid. Now, they're making a rational economic decision for themselves. And so nobody should blame them for that. But if startups had more access to those people, or if you know, those engineers finally said, you know what, enough's enough, I'm actually going to go and try something new. That's net additive to the ecosystem. It's net additive to startups, right? That's, that's, that's for them. And then for consumers, I think the reason why it's positive is that it'll start to show you in which cases you had been giving away something that you didn't realize was either
SPEAKER_01: valuable, or you didn't realize you were giving away something that you didn't realize was you were giving away in return for all of these product subsidies that you were getting. And I think that's the next big thing that's happening. You can see it in the, the enormous amount of investment Apple, for example, is making in both advertising the push to privacy, as well as implementing the push to privacy. You know, this last WWDC, you know, they really threw the gauntlet down, you know, they were really trying to blow up the advertising business models of Google and Facebook. And as consumers become more aware of that, they're probably willing to pay more. So a simple example is, you know, there are a lot of people now who will pay higher prices for food, if they know it to be organic, right? There are people who will pay higher prices for electricity or for an electric car because of its impact or the lack thereof in the climate. So it's not to say that people always want cheaper, faster, better.
SPEAKER_03: Right. I mean, sometimes people will buy an iPhone because it's obviously protecting their privacy and they know it's not an ad based model. And in fact, Apple is now making that part of their process. So freeburg, I asked the other gentleman, if they thought some large unit being chopped off of every company, YouTube, AWS, Instagram, you pick it would be a net positive for startups, or negative or neutral. And the same thing for consumers. What do you think?
SPEAKER_04: Which gentleman did you ask? You mean? I was specifically referring to the ones who are wearing.
SPEAKER_03: Hello, sir. Yes. I'm using the term lightly.
SPEAKER_04: So if you guys go back a few years ago, you'll remember there were these, I think there were congressional hearings. And Jeremy Stoppelman from Yelp was pretty vocal about how Google was redirecting search engine traffic to their own kind of reviews. And they were pulling Yelp content off the site. But then they said to Yelp, if you don't want us to pull your content, you can turn the web crawler toggle off and we won't crawl your site. But your site is publicly available. We can crawl it and we show snippets on our homepage. But then their argument was, well, you're using our content to drive your own reviews. And they made this whole case that Google's monopoly in search was harming their ability to do business. The counter argument was, well, if you guys have a great service, consumers will go to your app directly or your website directly to get reviews. They won't go to Google. And so it created a little bit of this kind of noise for a while. I think there was some follow up. And this is all very much related because ultimately, if he was able to get Google to stop providing a review service, his business would do better. Because Google would effectively redirect search traffic to his site as opposed to their own internal site. So it is inevitably the case that in-house apps or in-house services that compete with third party services when you're a platform business, if they're removed, it's certainly going to benefit the competitive landscape, which is typically startups. Imagine if Apple didn't have Apple Maps pre-installed on the iPhone. Everyone would download and use Google Maps. Right? I mean, MapQuest, whatever. Or MapQuest or whatever. And so whatever startup came along like Waze and said, hey, we've got a better map. But because they have this ability to kind of put that Apple Maps in front of you as a consumer, and it's a default on your phone, you're more likely to just click on it and start using it and you're done. It certainly opens up this window. But I think the question is what's ultimately best for the consumer? If you believe that consumers will choose what's best for themselves, you're starting to kind of manipulate with the market a bit. And Saks, I don't know, I think you've got a different point of view on this. But yeah.
SPEAKER_00: Well, I'm a free markets type of guy. But my experience at PayPal really changed my thinking on this because PayPal was a startup that launched effectively as an involuntary app on top of the eBay market. At that time, eBay had a monopoly on the auction market. And that was the key sort of beachhead market for online payments. So we launched on top of eBay. They were constantly trying to dislodge us and remove us from their platform. And really, the only thing keeping them from just switching us off was an antitrust thread. We actually spun up, you could call it a lobbying operation, where we would send information to the FTC and the DOJ and say, listen, you've got this auction monopoly here that's taking anti-competitive actions against us, this little startup. And so we were able to rattle the saber and sort of brush them back from the plate from taking a much more dramatic action against us. And frankly, we did something kind of similar with Visa MasterCard because PayPal was essentially an application on top of Visa MasterCard as well. We offered merchants the ability to accept Visa MasterCard, but also PayPal payments, which were gradually eating into and supplanting the credit card payments. And so Visa MasterCard had a very dim view of PayPal. And they were constantly making noise about switching us off. And I do think that without the threat of antitrust hanging over these big monopolies or duopolies, it would have been very hard for us as a startup to get the access to these networks that we needed. And so it really kind of changed my thinking about it because if you let these giant monopolies run wild, run amok, they will absolutely stifle innovation. 100%. They will become gatekeepers. And so you have to have the threat of antitrust action hanging over their heads, or you will stifle innovation. Absolutely.
SPEAKER_03: I mean, if you just look at the interesting Google flights over time, I'm looking at a chart right now, we'll put it into the notes. Google flights, you know, I know some of us don't fly commercial anymore. But, you know, for somebody who's looking for flights on a regular basis, watching Google intercept flight information, put up Google flights, and it's an awesome product. And just Expedia and bookings.com. So Jason, that was that was a company called ita software based out of Boston, and ita
SPEAKER_04: was acquired by Google ita was the search engine behind flight search. For most companies, it was like 70 PhDs, they were all statistics guys. And they basically built this logistical model that identified, you know, flights and pricing and all this sort of stuff. Wow. So as I should never been. Well, they created a white label search capability that they then provided, and they were making plenty of money providing this as a white label search capability to Expedia and kayak and all the online travel agencies. And Google wanted to be in that business because travel search was obviously such a big vertical. And rather than just buy a travel search site, they bought the engine that powers travel search for most of the other sites. So gangster. And then they also revealed the results in their own search result homepage, which effectively cut off the OTA's and the OTA's are big spenders on Google ads. So basically, Google, this is how nefarious it is, if I'm hearing what you're saying,
SPEAKER_03: freeburg correctly, they watched all this money being made by those OTA's, they watched where they got their data from, then they bought their data source. And then they decided, you know what, we won't take your cost per click money, we'll just take your entire bill. I don't know. So let me just let me just say it another way.
SPEAKER_04: What's best for consumers? So does a consumer because what happens a lot in the negative dictatorships, I guess that don't want to make money in online advertising. There are a lot of these ad arbitrage businesses is one way to think about it, where a service provider will pay for ads on Google to get traffic, the ads will come to their site, and then they will either make money on ads or sell that consumer in another way. Services. And so that's effectively what the OTA's were. They became online search engine intermediaries that were arbitraging Google's ad costs versus what they could get paid for the consumer. And so Google look at this and they're like, wait a second, we're only capturing half the pie. And consumers don't want to have to click through three websites to buy a flight or buy a hotel. And by the way, if they did, they would keep doing it. So why don't we just give them the end result right up front? And then consumers will be happier the less time they have to spend clicking through sites and looking at other shitty ads, the happier they'll be. And the product just works incredibly well. Can see consumers lives less arduous while building a power base that then could make
SPEAKER_03: their lives miserable. What I think Lena Kahn is saying though, is you can't just look at the short term interests
SPEAKER_00: of consumers. You got to look at their long term interests. What's in the long term interest of consumers is to have competition in the short term. These giant monopolies can engage in predatory pricing to lower the cost for consumers. And so just looking at the price on a short term basis isn't enough.
SPEAKER_01: And they can trick people to giving them something else that they don't know to be valuable. So in the case of these, you know, a lot of these companies, what are they doing? They're tricking them to get enormous amounts of user information, personal information, user generated content, and they get nothing for it. And then on the back of that, if you're able to build a trillion, look at look at the value that YouTube has generated economic value, and then try to figure out how much of that value is really shared with the creator community inside of YouTube. I'm guessing it's less than 50 basis points. Well, 55% of revenue, but you're saying downstream with all that data.
SPEAKER_03: Google is making a massive amount of money. I just want to if you if you impute the value of all of the PII that Google basically get
SPEAKER_01: personally identifiable information, all the cookies that they drop all that information, and you equate it to an economic enterprise value, not necessarily yearly revenue, like a discounted cash flow over 20 years, you would be in the trillions and trillions of dollars. And then if you discounted the same 20 years of revenue share that they give to their content producers, it will be in the hundreds of billions of dollars at best. And so you're talking about an enormous trade off where Google basically has built, you know, a multi trillion dollar asset, and has leaked away less than 10 or 15% of the value. But that's an example where they are giving people something that they think is valuable, but in return, they're able to build something much, much more valuable. I just want to address like Saxe's point, which is the regulators are now going to start to
SPEAKER_04: think about the long term interest consumer over the short term interest of the consumer as effectively giving the regulatory throttle to elected officials. And this means that you're now giving another throttle, right, another controlled joystick to folks that may not necessarily come from business, that may not necessarily have the appropriate background, and that may have their own kind of political incentives and motivations to make decisions about what is right and what is wrong for consumers over the long term. And ultimately, those are going to be value judgments, right? There's no determinism here, there's no right or wrong. They're going to be decisions based on the kind of opinion and nuance of some elected people. And so it is a very dangerous and kind of slippery slope to end up in this world, where the judgment of some regulator about what's best for consumers long term, versus the cold hard facts, oh, prices went up prices didn't, you know, but really say, well, this could affect you in the future in this way, starts to become kind of a really, you know, scary and slippery slope. If we kind of embrace this, this this new regulatory order.
SPEAKER_03: All right, moving on big news this week, Apple had a gag order, it has been revealed. This is unbelievable. It's pretty crazy. And we only have partial information here. But the Justice Department subpoenaed Apple in February of 2018, about an account that belonged to Donald McGahn, who obviously was the Trump's White House counsel at the time, and obviously was part of the campaign. He is very famously known for being interviewed by Mueller. And at that this is the time period, by the way we're talking about here in February of 2018. When Mueller was investigating Manafort, who of course, was super corrupt and went to jail and then was suddenly pardoned, because they he was also involved in the campaign in 2016. It's possible that this related to Mueller it's unknown at this time. Many other folks were also caught up in this dragnet rod rosenstein was his second and it's unclear if the FBI agents were investigating whether McGahn was the leaker or not Trump had previously ordered began the previous June to have the Justice Department remove Mueller, which began refused and threatened to resign and began later revealed that he had in fact leaked his resignation threat to the Washington Post. According to the Times disclosure that agents had collected data of a sitting White House counsel, which they kept secret for years is extraordinary. Go ahead, sacks. Well, I just think it looks good to all the facts out here. I think
SPEAKER_00: you're missing some of the key facts. So the the Justice Department under Trump starts this investigation into leaks of classified information. They're on a mole hunt effectively. And they start making the subpoena the DOJ subpoenas records from Apple and it goes very broad. And they end up subpoenaing the records not just of McGahn, who's the White House counsel, which is very bizarre and curious. They'd be investigating their own White House counsel. But they also they also well wasn't a ship. Yes, but they're all they also subpoena records of Adam Schiff and small well and members of the House Intelligence Committee. And so you have now an accusation, which is being breathlessly reported on CNN and MSNBC that here you had the Trump administration investigating its political enemies and using the subpoena power of the DOJ with Apple's compliance to now spy on their political enemies that those are some big jumps. Those are some big jumps set up. Yeah, and that those are some big jumps because,
SPEAKER_03: according to Preet Bharara, and some other folks who are in the industry, who have done these actual subpoenas, they could have been subpoenaing, you know, one of Manafort's, you know, corrupt, you know, partners in crime. And then those people, he could have been talking to many people in the Trump administration, and then subsequently family members and others. So he might have not been the target, he could have been caught up in the metadata of other people. Yeah. So this might not be Trump saying get me his iPhone records, it could be there's some dirty person, they know they're dirty, and that person had reached out to other people. And they might have even done one more hop from it. Shemagh thoughts. I mean, okay, that's one version. Yeah. And then you know,
SPEAKER_01: the other the other version, which is important is you subpoena your own lawyer by going to Apple, getting basically God knows what data associated with this man's account. And then, you know, institute the gag order on that company so that they can neither tell the person until now when the gag order expired, nor tell anybody else nor have any recourse to the extent that they think that this is illegitimate. That to me smells really fishy. And so you know, like, there are other mechanisms that that we know of, like physical requests and other things that these big companies have to deal with all the time. This at least the way that it's written and how it's been reported is something outside of the pail. And so I think you have to deal with it with this question of like, what the hell was going on over there? Yeah. It does seem like they were going. I mean, you know, kindly, maybe mole hunting more nefariously, which hunting. But they were trying to pin it on people. And they may have used this blanket, sort of deniable plausibility of the Russia, you know, in brolio. But really, what these guys were doing was they were investigating anybody that they thought was a threat. And that is a really scary thing to have in a democracy. And then the fact that these big tech companies basically just turned it over and didn't have any recourse to protect the user or to inform the public. Forget Trump for a second. I think we don't necessarily want that to be the precedent that holds going forward. Yeah. And the interesting thing here is that sacks, Jeff sessions, Rosenstein, and bar all
SPEAKER_03: say they're unaware of this. So what would be the charitable reason they were unaware of it? Or what would be the nefarious reason? Or is that important at all? Because that really is a really strange, well, they would go after the White House Council and Adam Schiff. And those top three people would have no idea. Are they? Next is the SCS, you know, are we going to basically go to a point where like, you know,
SPEAKER_01: every single every no, but I mean, like, every single post that one makes on Facebook is basically surveilled. If you make an anonymous post on Twitter, will you be tracked down? I remember like, as much as everybody thinks there's anonymity on the internet, there really isn't. And you should just completely assume that you are trackable are being tracked, have been tracked, everything is in the wide open. It's just a matter of whether it's disclosed to you or not, or whether it's brought back to you or not. So yeah, so look, I mean, I agree with Jamaat that this stinks. And it's an invasion of people's
SPEAKER_00: civil liberties. But I would not make it too partisan, because the Obama administration was engaging in similar activity back in 2013. And I don't think people realize this, these are realize this, there's an old saying in Washington that the real scandal is what's legal. And the fact of the matter is that what the Trump administration did was certainly suspicious, and it might have been politically motivated, we don't know. But it was legal, the DOJ convened a federal grand jury, got these, got these subpoenas, presented them to Apple and got this information. And in a similar way back in 2013, the Obama administration did something similar. It's quite extraordinary. They subpoenaed the records of the AP they for they for two months, they got the records of reporters, and five branches of the AP and all their mobile records, and they were on a mole hunt to try and find leakers of classified information. So the Trump administration basically did exactly what the Obama administration did. The only new wrinkle is that they'd only went after reporters, they actually subpoenaed records of members, you're missing one huge, you're missing
SPEAKER_03: one huge difference. Trump was under investigation for espionage and treason at the time. So it is slightly different. I don't think it's that different in the sense that Trump used powers
SPEAKER_00: that were pioneered by the Obama administration. They just took them they just took them well, one little addition to that sacks. In addition to that, when Obama did it, all the top brass at the
SPEAKER_03: Department of Justice were aware of this. And in this case, you have three people who are running the department administration all claiming they don't know. No, in 2013, there's a New York Times
SPEAKER_00: article on this, I'm going to post on the show notes. But it said that when first of all, the AP was not informed about the subpoenas until a number of months later. So it was a secret seizure of records. Same thing here with the gag order. And so you have people being investigated, or even know they're being investigated, investigated, they can even get a lawyer spun up to oppose the invasion of their rights. I agree with you, but the Attorney General knew about
SPEAKER_03: that. Maybe the Attorney General did, but the White House claims that it didn't know. So in any
SPEAKER_00: event, I mean, look, yeah, what we I in my view on this is that we shouldn't try to make this too partisan. What we have here is an opportunity to hopefully get some bipartisan legislation to fix the issue. And I think the fix should be this, that when you investigate somebody, when you subpoena records from a big tech company, you have to notify them. You should not be able to do that secretly. Because the fact of the matter is that Apple and these other big tech companies don't have an incentive to oppose the subpoena. They're not your lawyer. And actually, Brad Smith, the president of Microsoft, had a great op-ed in the Washington Post that we should post, that we should put in the show notes, where he said these secret gag orders must stop. He said that in the old way of the government subpoenaing records is that you would have essentially offline records. You'd have a file cabinet, and the government would come with a search warrant that presents the search warrant to you, and then you could get a lawyer to oppose it. Well, they don't do that anymore because your records aren't in a file cabinet somewhere. They're in the cloud. And so now they don't even go to the person who's being investigated, right? They just go to a big tech company, seize the records, and then put a gag order on top of it. So you don't even know you're being investigated. That's a part of it that still by the way, it's even more pernicious in that
SPEAKER_03: sex because to combine this with the previous story, what incentive does Apple have to say to an administration that could break them up? We're not going to cooperate. It is zero incentive.
SPEAKER_00: They are not your agent in this. And here's the thing. Those are your records. They're in the cloud, but they're your records and every other privacy context. We say those records belong to you, not the big tech. So what is moving everything to your phone? Why should the government be able to do an end run around you, the target of the investigation, go to big tech, get your records from because they are not your records. Well, first of all, they're not your records. These
SPEAKER_01: companies tricked all of us by giving it to us for free so that we gave them all of our content. They are fair, not just that they are not just the custodian, they are the trustee of our content. And it's a huge distinction in what they're allowed to do. And Jason brings up an incredible point, which is, which is that, of course, they're now incentivized to have a backdoor and live under a gag order because their their defense in a back room is you guys, you know, when when in the light, somebody says we should break you up in the dark, they can say guys, come on, we got a backdoor, you just come in gag order us give us which will give you what you want. You want a honeypot, right? You don't want this thing all over the internet. And can you imagine how credible David that is to your point, because that is a body of concentrating power that I think is very scary. In fairness to Apple, Friedberg, they have locked down the phone, and they've moved all of this
SPEAKER_03: information from the cloud, or they're starting this process and saying, we're going to keep some amounts of data encrypted on your phone. And of course, with the San Bernardino shooting, they refused in a terrorist shooting a known terror shooting to not give a backdoor. Well, that's a crazy standard. It's like, you know what, okay, there was a San Bernardino shooter.
SPEAKER_01: And they were like, Nope, sorry, that's a bridge too far. But you know, Don McGann and basically, like, you know, political espionage. They're like, here you go. Yeah, I don't know. I don't know. How do you make these decisions? Let me ask you guys a question. Go ahead for
SPEAKER_04: your work. Would you be? Could you see yourself thriving in a world where all of your information was completely publicly available? But also all of everyone else's information was completely publicly available? Yes. Oh, everybody has all their nudes on the web is what you're saying.
SPEAKER_03: Every everybody. There's a there's a there's a book by Stephen Baxter called the light of other
SPEAKER_04: days. It's one of my favorite sci fi books. I sent it out to all of my investors this last, we do like a book thing every year. And I reread it recently. But the whole point of the book is that there's like a wormhole technology that they discover and they can figure out how to like look in, you can boot up your computer and look in anywhere, and see anything and hear anything you want. And so all of a sudden, society has to transform under this kind of new regime of hyper transparency, where all information about everything is completely available. But I think the fear and the concern that we innately have, with respect to loss of privacy, is that there's a centralized or controlled power that has that information. But what if there was a world that you evolve to, where all of that information is generally available quite broadly? And I'm not advocating for this, by the way, I'm just pointing out that like, the sensitivity we have is about our information being concentrated in the hands of either a government or a business. And I think you have to kind of accept the fact that more information is being generated about each of us every day, that was being generated by us a few weeks ago, or months ago, or years ago, basically, in a jury, buddy, everybody's the Truman and everybody's the Truman show is what you're
SPEAKER_03: saying. Well, in a geometrically growing way, information, which we're calling PII or whatever
SPEAKER_04: is being generated about us. And I think the genie's out of the bottle, meaning like the cost of sensors, the access to digital, the digital age, and what it brings to us from a benefit perspective, is creating information about us and a footprint about us that I don't think we ever kind of contemplated. But as that happens, the question is, where does that information go? Can you put that genie back in the bottle? And I think there's a big philosophical point, which is like, if you try and put the genie back in the bottle, you're really just trying to fight information wants to be free information wants to grow. What's the name of the book you were talking about there? The light of other days by Stephen Baxter and Arthur C. Clarke helped write it. But the book is most interesting about the philosophical implications of a world where all information is completely freely available. Tren anyone? Yeah, completely transparent. And so like, do we see ourselves because I think there's two paths. One is you fight this and you fight it and you fight it every which way, which is I want my PII locked up. I don't want anyone having access to it. Yada, yada, yada. You'll either see a diminishment of services or you will see... And the other one is you do a selfie on Twitter where you take your shirt off? Or you'll see this concentration of power where we all kind of freak out where the government or some business has all of our information. The other path is a path that society starts to recognize that this information is out there. There is, you know, whatever... It's not just about PII here. This is about due process. This is about our Fifth Amendment right
SPEAKER_00: to due process. You have the government secretly investigating people. They could never do this if they had to present you with a search warrant. They are doing an end run around that process by going to big tech, just to put some numbers on this. Big tech is getting something like 400 subpoenas a week for people's records. They only oppose 4% of them. Why? They have no incentive to oppose them. You should be able to send your... How many of those are secret? Do you know how
SPEAKER_03: many of those are secret or not? We don't know how many of them have a gag order. They are required
SPEAKER_00: to tell the target what happened but not if there's a gag order attached to it. We don't know how many have a gag order. You should have the right to send your own lawyer to oppose the request not to... If you want to see an amazing movie, The Lives of Others, which is about the
SPEAKER_03: state security service in East Berlin, Germany, also known as the Stasi and the impact of literally in your apartment building, there are three people spying on the other 10 people. And they're the postman and you know, the housewife and the teacher. And they're all tapped and secretly recording to each other. It leads to chaos and bad feelings. And obviously, when East Berlin, when the wall came down, all of this came out and it was really dark and crazy.
SPEAKER_00: Yeah, I mean, look, let me connect this to the censorship issue, actually, because in my view, they're both very similar civil liberties issues, which is, in the case of the censorship issue, you have the government doing an end run around the First Amendment by demanding that big tech companies engage in censorship that the government itself could not do. You have something very similar taking place here with these records. The government is demanding secrecy about its seizure of records. They're imposing that on big tech. They're making big tech do its dirty work for them. They could never do that directly if they had to go to the target of the investigation and ask for their end and subpoena the records that way. So you what you have here is a case where we don't only need to be protected against the power of big tech, we need to be protected against the power of government usurping the powers of big tech to engage in, you know, behavior they couldn't otherwise engage in. And let's be honest, big tech and the government are overlapping and in cahoots,
SPEAKER_03: or they're inside. Yeah, they're in some really crazy dance. The money is flowing freely from lobbyists and it's a very, very complicated relationship. It's a very complicated, very complicated relationship. Alright, seven day average for COVID. Debts is now at 332.
SPEAKER_03: Finding cases of people who have had COVID is now becoming like almost shocking. I don't know if you guys saw but the point guard Chris Paul, who is having an incredibly winning season, the NBA, he basically got COVID. They said he was vaccinated. So it could be a mild case, but he's been pulled out indefinitely. And he's about to play in the Western Conference Finals. So it's pretty crazy. And freeburg. Obviously, California's opened up after 15 months, and we were the first to shut down the last open up and we were hit the least I think of any state or amongst the least of any, certainly the least of any large state. And you're being asked to still wear a mask at your office. I'm also being asked to take off my shoes when I get on an airplane. Yeah, 20 years
SPEAKER_04: later, and I don't think al Qaeda exists anymore. Maybe some parts of it. Explain what's happening
SPEAKER_03: to you in the Presidio, which is a lovely state park here in California. My office in the Presidio
SPEAKER_04: California, San Francisco County and the federal government have all removed mask mandates. But our landlord has determined in their judgment that everyone should still wear a mask to go to work. And so to go into my rented office and work, I have to wear a mask. And I think it's an issue for a lot of people who like those people that I've been probably a couple of restaurants this week. And you know, you go to some restaurants and everyone's just chilling, the employees are not wearing masks. There's other restaurants where they're being told they have to keep wearing masks by their manager or their boss. And so this brings up this big question, which is like, we've now got the kind of psychic shadow of COVID. That's good. It's gonna cast a very long shadow. You predicted it. You predicted it. And so people that are in power want to continue to kind of impress upon, you know, whatever, you know, employees or tenants or what have you they might have in whatever they deem their judgment to be, which is obviously, in many cases, an under informed, uninformed, non scientific, and non mandated judgment about effectively what people should have to wear. So if the threat or the risk has been removed, and all of the health officials and all of the government agencies are saying the threat has been removed, you no longer need to kind of wear masks. But your boss, or your manager, or your landlord tells you, you have to wear a mask to conduct your business or to go to work. You know, it's going to bring up this whole series of challenges and questions I foresee for the next couple of months, at least, and maybe for several years about what's fair and what's right. And there will always be the safety argument to be made on the other side. So it's very hard to argue against that. And, oh, well, the inconvenience is just a mask, it's not a big deal. But for, you know, a number of people to now kind of be told, you know, what to do and what to wear, it'll take a year to sort all these things out, because they'll all get prosecuted, or not
SPEAKER_01: prosecuted, but litigated. And they're going to go to court, they will get for sure there will be
SPEAKER_04: lawsuits on this. And and what's going to happen is that you're going to basically have again,
SPEAKER_01: Jason, back to that example of the the bakery in Colorado, private institutions will be allowed some level of independence in establishing, you know, certain employee guidelines and so on.
SPEAKER_04: Exactly. And you you'll have to conform to those. And the it is what it is. I mean, I just very
SPEAKER_01: strange in Austin, in terms of these COVID dead enders who just will not let it go. I'm in Austin
SPEAKER_03: where nobody is wearing a mask. And then there were like, I went into Lululemon. And they like, two people charged me with masks in hand. And they were like, you have to wear a mask. And I was like, Do I know like, yes, it's our policy. I was fine. I'll put it on. I don't care. You know, no big deal thing. This thing has really fried a bunch of people's brains. I mean, crazy. I mean, it's
SPEAKER_01: basically like you've taken an entire group of folks and kidnap them. And kidnap them essentially. Stockholm syndrome. It's incredible. Everyone's been held hostage, you know, in a
SPEAKER_04: prison for the last year. And so you've kind of accepted that this is the new reality. I got to wear a mask. I got to wear gloves. And you know, it's the similar sort of shift in reality that I think was needed going into this, where people didn't believe what it was. And now it's hard for them to believe what it's become. We flagged human nature. Yeah, yeah, we flagged on this
SPEAKER_00: pot a few months ago, the threat of zeroism. Yeah, which is that we wouldn't let, you know, all the special rules and restrictions lift until there were zero cases of COVID. And we all know that's never going to happen. COVID will always be around in the background. And just to add a layer to what's happening here in California is, yeah, on June 15th, we lifted the restrictions. But Governor Newsom has not given up his emergency powers. And he says he will keep them until COVID has been extinguished. So he's now embraced zeroism on behalf of this sort of authoritarianism. Yeah. And, you know, so we've got this like Golden State Caesar. And now what's interesting is, I don't think this is just because he's a tyrant, although he's certainly been heavy-handed. I think it's because that the, I think it's more about corruption than ideology because federal funds, emergency funds from the federal government keep flowing to the state as long as we have a state of emergency. And so the longer he keeps this thing going, the more money he gets from the federal government that he can then use in this recall year to pay people off. And so we've already seen he's been buying every vote he can, right? He gave 600 bucks to everyone making under 75,000. He's forgiving all the traffic fines and parking tickets. He's doing this lottery ticket thing for getting the vaccine. And so he just wants to keep the gravy train from Washington, full coin to California, even though we have a surplus.
SPEAKER_05: It's what Governor Timoth would have done.
SPEAKER_04: I mean, it reminds me of 911, where people were just like, hey, we can keep this gravy train.
SPEAKER_03: No, I mean, like, 911 is the perfect kind of psychic, you know, scenario, you know,
SPEAKER_04: replaying itself with COVID. There are behavioral changes that have lasted forever. There are regulatory changes, this, you know, Department of Homeland Security, I mean, you go through the amount of money that gets spent by the TSA every year, and the qualified risk and the qualified benefit completely unquantified, right? Like the amount of money that flows into these programs, because you can make the subjective statement, there is a threat, there is risk, therefore, spend infinite amounts of money, right? Because you never kind of put pen to paper and say, what is the risk? What is the probability? What is the severity of loss? And therefore, let's make a value judgment about how much we should spend to protect against that downside. And we're now doing the same thing with COVID. We're not having a conversation about how many cases how many what's the risk? Should we really still be spending billions of dollars of state funding to continue to protect a state where 70% of people are vaccinated, and we have a massive surplus. And we're still giving people money who may or may not need it.
SPEAKER_03: And we're doing it indiscriminately speaking of discussions and hard topics and being able to have them. YouTube, which kicked off a ton of people on the platform for talking about things that were not approved by the wh o has taken Professor Brett Weinstein's podcast down because he had a very reasonable discussion about ivermectin and its efficacy or lack of efficacy. This is a doctor a PhD talking to an MD and the video was removed. Apple did not really it's scary this episode, these people should not be the gatekeepers of the truth. They have no idea what the truth is.
SPEAKER_00: Let's talk about the Jon Stewart appearance on Steve. Well, that's what I was about to do. Yeah, he killed he killed on Stephen Colbert, but the things he was saying about the lab leak would not have been allowed on YouTube. If it was three months ago that you would have been removed for it.
SPEAKER_03: Even as a comedian, the performance was amazing. He basically says, you know, the Wuhan COVID lab is where the Wuhan you know, no, the disease is named after the lab. So where do you think
SPEAKER_01: it came from? Was like a panel in murder, you know, mated with a bat. I mean, this isn't any goes on this whole diatribe. It's incredibly funny. Yes. But then at the end of it, well, I had two takeaways. I don't know if you guys felt this. At first I was like, I had Jon Stewart's a little unhinged here. Like, I mean, there was a part of it that was funny. And then there was a part of it, which is like, wow, Jon Stewart's been trapped indoors a little months. Yeah. So I thought that as well, to be honest. But then the second thing, which I saw on Twitter was all these people reminding anybody who saw the tweet that this exact content would have not been allowed on big tech platforms, were it said three or six months ago. And I was like, wow, this is this is really nuts. Meaning it takes a left leaning, smart, funny comedian to say something about satire. If the if the right if the right would have said it would have just been instantly banished. And that's like, that's kind of crazy. Yeah. The great quote was, I think we owe a great
SPEAKER_03: debt of gratitude to science. Science has in many ways helped ease the suffering of this pandemic, which was more than likely caused by science.
SPEAKER_00: Yeah, it was a funny line where he said something like, if there was an outbreak of chocolate goodness in Hershey, Pennsylvania, Pennsylvania, because you know, whatever the pangolin kissed the bat, it's because there's a fucking chocolate factory. I don't know, maybe a steam shovel made
SPEAKER_03: it with a cocoa bean. Chocolate factory. He was so funny.
SPEAKER_01: So I agree with Jamal's takeaways. I mean, this was a great example of censorship run amok at
SPEAKER_00: these big tech companies. But the other thing I saw that was really interesting was Stephen Colbert lose control of his audience. And, you know, Stuart killed on that show. But you could see Stephen Colbert was I think, visibly nervous, very uncomfortable. Yeah, very, very uncomfortable. She did not know what was coming. And he was trying to and when when john stuart kept pushing this, he was like, well, he's not trying to qualify. Well, so what you're saying is now that Fauci has said this might be a possibility you're saying it might be a possibility. And john stuart was having none of it. He ran right over that said, No, the name is the same. It's obvious. Come on. And yeah, when Colbert kept challenging him, I don't know if you saw this part where he said,
SPEAKER_03: Hey, listen, is it possible that they have a lab in Wuhan to study the Coronavirus disease? Because one there are a lot of novel Coronavirus diseases because there's a big bat population. And then Stewart is like, No, I'm not standing for that. He goes, I totally understand. It's the local specialty. And it's the only place to find bats. You won't find bats anywhere else. Oh, wait, Austin, Texas has thousands of the flat of a cave every night at dusk. And he wouldn't let it go. So it's just great watching. It was it was a reminder, frankly, of how funny both john
SPEAKER_00: stewart and Stephen Colbert were about 15 years ago. And I frankly, I don't think Stephen Colbert is funny anymore. Because No, because he's got to keep his job. He's carrying out. He's also too
SPEAKER_03: woke. And yeah, yes, he's become very polemical. And what Stewart reminded us is that comedy is
SPEAKER_00: funny, when it's making fun of the people who are pretentious, and basically who aren't telling the truth. And Stephen Colbert has become so polemical that he's lost sight of the comedy. And yeah, just brought it back. And I hope you know, by the way, Colbert Colbert had this element of satire,
SPEAKER_01: which even Stewart Stewart was in your face funny, whereas Colbert was like subtle and dry, and you had to think about it, there was layered. Oh, for sure. He's totally lost it totally, totally. Well, if you know, and then and then, and then and then I thought Stewart came out swinging hard. I do think though, it sucks. You have to agree. Did it seem to you though, like Stewart had not like he just needed more human to human interaction. He was a cage tiger. He was like, I'll go to off. Absolutely.
SPEAKER_00: It was the funniest thing john stuart's done in many years. And the reason is because he connected with the fact that here is this obvious thing that we're not allowed to say, and that is what comics should be doing. Yes, put a light on it. I mean, if comedy is tragedy plus
SPEAKER_03: time, I think that this is a great moment for us to reflect on like, I think we're going to go back to normal pretty quick. If you remember, after 911, there was this idea that comedy was over forever, you were not going to be able to make fun of things. And that this was the end of satire, people were this is, you know, a bridge too far, etc. And I think we're back, we're back, and that's it. You know, we can joke about the Coronavirus, we can talk about it, we don't need to censor people for having an opinion. We're all adults here. You know, the idea that, you know, we have to take down people's tweets, because they have some crazy theory or put a label on them. Like, we went a little crazy during the pandemic, and tried to stifle discussions for what reason? Exactly. Like, when we look back on this, it's gonna look really strange that we demanded that we put labels on people questioning or having a debate, including doctors. Doctors were not allowed to debate to the public on YouTube or Twitter about what was the drug that Trump kept promoting? Hydra, chloroquine, chloroquine, like, remember that whole chloroquine, I think this ivermectin or whatever it is, it's just triggering people because it feels like that last drug, which is a drug that may or may not work to slow down the progression of COVID. But anyway, this is all over. If you haven't gotten your goddamn vaccine, please get it. Stop denying science. Climate change is not real.
SPEAKER_05: Oh, my God, the YouTube just canceled our account. What are you doing?
SPEAKER_00: We talked about science as if science is a definitive answer to a question. It's a process by which you come to answers, you test them. And look, hydroxychloroquine may have been completely wrong, but let the debate happen. The answers came out anyway. I'll tell you a fundamental premise of science is to challenge assumptions. And so, when you
SPEAKER_04: challenge an existing hypothesis or kind of an existing thing that we hold to be true, you are engaging in science. And the rigorous debate around what works and what doesn't work was notably absent over the past year, because everything became about the political truth. You're either true or you're false based on your political orientation. And we reduced everything down to kind of this one-dimensional framework, which we have a tendency to do. By the way, let me just point this out to you guys. I was gonna mention this a few weeks ago, but like, think about every conversation you have, how common it is now to immediately think about what the person on the other side that you're talking to just said, and then trying to put them on a blue or red spectrum. It's how we've all kind of been reprogrammed over the past decade or so, where it used to be about the topic itself, and the objective truth finding or the specifics of what we're talking about. And now it's become about, you immediately try and resolve them to being conservative or not, red or blue, Trump or not, purple. And so, every conversation, you kind of try and orient around that simple, ridiculous one-dimensional framework. And it's a complete loss of the discovery of objective truth in all matters in life, and all matters that affect all of us. And it's really quite stark and sad. Jared Ranerel This is why we need a new political party, the Reason Party. David Tompa I think it's less about that. I think it's more about everyone just reorienting themselves when you have a conversation, just notice yourself doing it. And then recognize that maybe that's not the way to make a decision about the conversation or about having an opinion or point of view, but have an opinion or a point of view about the topic itself, not about the orientation of the topic on a on a single dimensional spectrum. Jared Ranerel And then layer identity politics into that.
SPEAKER_03: So not only your politics, but your gender, your race, your sexual preference, the color of your skin. And now how is anybody supposed to have a reasonable argument when I have to process, like, oh, Chabot's from, you know, Sri Lanka, but he went through Canada, and he worked for I mean, David Tompa it's so reductive that no one gets. It's so reductive that no one gets to have an
SPEAKER_04: identity anymore. Right? Because we are all complex, and all issues are complex, and they are all nuanced. And when you reduce everything down to kind of this one dimensional framework, you lose any ability to have depth to have nuance to have Jared Ranerel said another way the issues are complex enough, we don't have to put identity
SPEAKER_03: politics or political, you know, leanings on top of it. All right, so we had the worst fire season in California ever last year. Obviously, as Chabot said, global global warming is a conspiracy. By the Chinese, as per your guy, Trump, sacks, and what there is climate change in Switzerland,
SPEAKER_04: there is a center called the Center for Climate Change. There is a reason that there's climate change in Switzerland. It's coming from that lab. Ah, that center did it. Look at the side.
SPEAKER_05: They're getting paid to propagate this conspiracy theory. Yeah. All right. So it's it's going to be
SPEAKER_03: the worst. Well, we are at risk more than ever, right. So we're entering June. So as of June 1,
SPEAKER_04: the California snowpack is down to 0% of normal. That's never happened before. So it's the lowest it's ever been there. There is absolutely like no snowpack in the entire Sierra in the entire state. 40% of the state is in a state of extreme drought right now. We've had 16,000 acres burn as of a few weeks ago, up from 3600 during the same time period the same day of the year last year. And so the tinder is there. Now remember, last year was the highest California has ever seen. We burned 4 million acres last year. California has about 33 million acres of farmland or forest land representing about a third of our total land size in the state. 60% of that land is federal, 40% is private. And so the big variable drivers this year are going to be wind and heat. And we're already seeing a few heat waves. But it's the wind that kind of kicks these things off. But the tinder is there, right? So like the state is dry. The snowpack is gone. We're on severe water restrictions in a lot of counties throughout the state. It's worth, I think, talking about the carbon effect. Last year, based on the forests that burnt in California, we released about one and a half times as much carbon into the atmosphere from our forest fires as we did from cars burning fossil fuels in the state. And so, wow. So here's some statistics for you guys, which I think are just worth highlighting. There's about 2 billion metric tons of carbon stored in California forest land, which is about 60 tons per acre. So there's about 9 million new tons of carbon sequestered
SPEAKER_04: per in California by our forest land per year. When there's a fire, we release about 10 tons per acre. So about one sixth of the carbon in that forest land. The rest of the carbon doesn't burn up. So remember, when there's a forest fire, typically the outside of the tree burns, the whole thing doesn't burn to ash. And so a forest fire can actually, if you look at the longitudinal kind of effect of it, burning forests can actually preserve the carbon sequestration activity versus just removing forests or removing trees. And so there is, to some extent, an effort that has been shut down several times, which is to do these kind of controlled burns through the state. But it's met with such resistance, given that it's so controversial. No one wants to have smoke in their neighborhood. It shouldn't be controversial. The problem is you can't present simple data and have
SPEAKER_01: people have a logical conversation about it. And the cost per acre to clear land and to forest
SPEAKER_04: land in California, it ranges depending on the complexity of the land, but it's somewhere between $50 and $1,000. So call it a couple hundred dollars per acre. So you can very quickly kind of do the math on a carbon credit basis, Chamat. So it's about 40 bucks per ton for carbon credit today. So you can kind of preserve about $400 per ton by not putting carbon into the atmosphere. And if you can actually manage farmland, forest land clearance and forest land preservation from fire at a cost of $400 or less, and there was an active carbon credit market, you should be able to cover the cost of managing that forest land back. But we're at incredibly high risk this year. It doesn't mean that we're necessarily going to have a fire because weather is the key driver. The weather is highly variable. We need wind, we need wind, and we need a heatwave with wind and then there will be fires. But then what do they do when they
SPEAKER_03: when the wind kicks up right now, the electric company turns off power in California because they don't want to be blamed when a power line goes down and starts a fire. So we have these regular moments. This is where we just lose power. Yeah, this is not just a California problem. I
SPEAKER_04: know everyone wants to beat up on California, but like the whole western us go look at Google Maps, you'll see how much green stuff there is on Google Maps. It's green up and down the western half of the US. It was Trump right that raking up the forests, to put it in layman's terms or simple
SPEAKER_03: terms is an actual thing that helps 60% of forest land in California is federal land. And it was
SPEAKER_04: the federal government's responsibility to manage that that cost down to manage that risk down. What is the incentive? What is the motivation? You know, what are the key drivers? Those are obviously it does work to clear it though. It theoretically when you reduce the amount of tinder, you will
SPEAKER_04: reduce the risk of a burn, right? And so the cost, but the cost of doing so as we mentioned, it's probably a couple $100 per acre. And so who's gonna let's say you want to do that on 5 million acres, you know, wouldn't this create a bunch of jobs? Oh, wait, we're paying people to
SPEAKER_03: stay home. Yeah, like, it would create a ton of jobs. I mean, I hate to be like that guy. But like, could we $35 an hour jobs for people? I've heard scuttlebutt that Newsome is so worried about
SPEAKER_00: fire season that they're going to try and accelerate the recall election. So it happens before there was, you know, the conventional wisdom, the conventional wisdom, do that,
SPEAKER_05: he's so smart. It would be strategic. The conventional wisdom was that you'd want to wait
SPEAKER_00: as long as possible to the recall because the longer you wait, the longer you get the rebound of the economy from COVID. Right? But now they're talking about accelerating it to beat fire season, because it's looking really bad. And freebirds, that we needed much more aggressive forest management. It's not just climate change. It's also forest management. We don't do it in California anymore. And so I think we're we are in for a really hellish fire season.
SPEAKER_01: We're going to have a terrible we're going to have a terrible fire season. There's going to be brownouts, probably throughout a lot of the western states.
SPEAKER_01: What played out in Texas that affected folks a few months ago, I think will some version of that will happen in many places in the US. This is and it's all roughly avoidable. And the critical principle act to share is the progressive left, they need to marry their disdain for climate change. And their disdain for the things that need to happen to prevent it. Because right now these two things for them are just like it's cataclysmically not possible for us to agree on, for example, as freeberg says, a controlled burn program, as a mechanism of sort of like fighting climate change, or, you know, investing more in the the greenification of the economy so that we can actually eliminate the use of a lot of these non sustainable energy sources. All these things basically just come down to a group of individuals deciding that they can both have an opinion on something as important as climate change, but then are also willing to then go and act right now they won't until they do. It's just going to spill over everywhere. It's going to be a very bad fire season. And the only reason I know that it is, is that every year before it has been every single year has gotten warmer. It's not only to be better. Yes. By the way, let me just correct
SPEAKER_04: a statistic I said because the statistic I gave was a few weeks ago. But as of today, we are actually at the average, the historical average in terms of number of acres that are burnt in California, as we have seen historically. I will also say that, you know, close to one sixth of California's forest land burnt last year. So, there is a tremendous amount of tinder that has been removed from the risk equation. And we typically burn about a million acres a year. I think we burnt like 4 million last year, a little over 4 million last year. So, you know, as you look at the cumulative kind of reduction of burnable acres, we're actually the good thing that's going on is we're actually at a lower risk scenario going into this year in terms of total amount of tinder, the risk of the tinder catching is higher, because it's drier. NASA, but when you add this all up, there's certainly a high probability of a bad fire season. But there could be an area here where we end up with zero scenario that's gonna happen. NASA publishes
SPEAKER_01: temperature studies, they do measured measurements of how much warming there is in the earth. Last year, we set yet another record, it was the seventh year in a row where it was warmer than all the previous successive years. It's just going in the same place. I mean, and so if we're all of a sudden supposed to bet that a trend that has effectively been reliable for the last decade is going to turn. I'm not sure that that's a bet you'd want to make, or that the winds is not going to be a bet. It would be stupid. There's no reason to make that bet. I mean, this is like
SPEAKER_03: betting on a one outer we need we need we need the left to take control of this issue and solve it.
SPEAKER_00: Get ready for Martian skies over California. I mean, literally, I'm thinking about an escape
SPEAKER_03: plan from California. And I'm putting a generator in this month. I bought six new air filters, you know, like, beautiful. That's not that's not good enough. Well, I have my house is totally
SPEAKER_03: sealed. And I have the air purifiers in I have a built in air purifier of the house. And I have six portable ones in each every bedroom. Are you coming back in August?
SPEAKER_01: In September at the end of August, but by the way, let me let me tell you where it really the rubber meets the road. Just again, I'm speaking to the progressive left. They care apparently, so much about minorities, I just want to make sure you guys understand that, you know, air quality disproportionately affects minorities. Why? Because we are not not me anymore. But you know, minorities are the ones that typically live near industrial output, near transportation, throughways and thoroughfares. It is it is statistically proven that blacks, brown, other minority people are the worst people to suffer from respiratory diseases, and airborne illnesses. And these are things that are that are happening today. So again, I want to go back to the same group of individuals who apparently believe in climate change, but don't believe in nuclear. They don't believe in controlled burns. They believe in inequality, but they don't want to do what's necessary to regulate emission. What are we doing guys? Just do the job. Do the job. I think you're talking job.
SPEAKER_00: What you're saying is correct from off but I think it's a sad statement about the progressive left that the only way to reach them through an argument is to argue for that disparate impact on a minority. The reality is all Americans. Yes, exactly. Exactly. It's bad. Red pill me give me those red pills. God, God, you're holding out. But but but your mouth understands that audience. He
SPEAKER_00: is making the argument they're going to respond to. But the argument that they and everyone should be responding to is bad for everybody. The planet, all humans. Exactly. What are you guys going to
SPEAKER_04: do for fire season? Do you actually I'm thinking about renting a house? Like I rented a house in Chicago and like Michigan last year, and I went there and it was a great escape for a month to get away from fire season. I don't I don't I'm very scared to be in California during all of
SPEAKER_01: this, to be completely honest with you. I just want to be there. Yeah, I'm out. I'm gonna try to figure out some some back in late of August and hopefully everything is calmed down by that although it won't because it gets very, very hot. September was the heart of it. It's typically the
SPEAKER_04: heart of it. Jake, how do you think you're gonna go to Miami or Austin or something? You know, I,
SPEAKER_03: I went back to Austin for a wedding and I met the governor. And don't get sweating and you met Greg.
SPEAKER_01: You met the governor. Yes. And going to Austin in 2021 is like when I would come to San Francisco
SPEAKER_03: and go to the battery in 2003. And Zach 2013. And Zach would say, Why don't you live here? There's so much going on in San Francisco, come to San Francisco. And I did. And I got the last five years of the peak. But Austin very appealing to me. And then I've been looking at beach houses in Miami. And I'm 50% of the way there, folks. Oh my god. I mean, the fact that you can now buy a beach
SPEAKER_00: house. I mean, God bless America. Three year average. I had a 71 three year average in high
SPEAKER_05: school. And I forgot that I convinced you to move to San Francisco yet another way in which I
SPEAKER_00: contributed to the monster your career towards absolutely abs. Okay, I'm gonna use call in every
SPEAKER_03: day. Call in syndicates underway. Everything. You wouldn't even be a VC if it wasn't for me.
SPEAKER_00: You'd still be a mute. That's right. We do a conference producing your your you and Navole
SPEAKER_03: really pushed me towards it. And then special thank you to you and Chamath Billy for anchoring and Dave. We love you. You know what I mean, I tweeted the other day, at the end of the day, you know, our lives are a collection when we look back on them of memories with our friends. And you know, I include family and friends. And this podcast not to get all gushy and whatever is been a delight over the you know, really hard pandemic that's now ending. And it's I just I'm really happy that we get to spend this time every week together every week. I get a you know, a little bit of excitement. Like I used to get when we go you'd host poker, sacks or chum up. You know, those days when we'd have a poker game. Sky Dayton would tell me and you know, I get a little tingly feeling like, Oh my god, I'm gonna see my friends tonight and play poker and laugh. And you know, we got that amazing note from the woman who said she was really having a hard time during the pandemic and that the podcast all in podcast really helped her and you know, shout out to Sam. Thanks for that. Yeah, Sam that really made our week. So shout out to Sam. Long way of saying I love you, sex. Well,
SPEAKER_01:
SPEAKER_00: Jake, how you are the Stephen Colbert to my john stewart.
SPEAKER_02: I think it's the opposite. I think it's I have to call I have to come on your show and red pill you
SPEAKER_00: and make sure that you're saying the truth and not getting too wrapped up in your Trump derangement syndrome or whatever. At the end of the day, you know, we we are I think all of us
SPEAKER_03: working through complex issues to freeburg. I really loved your contribution today about how complex these issues are, and layering more complexity onto them of our identities, our wealth, you know, our histories, immigrants, not whatever politics. These issues are so hard, and in some ways also so easy with technology and world class execution, that the world needs to have more reasonable conversations. And I think that what we've demonstrated here is that for friends can have reasonable discussions and laugh about life and enjoy life. And that should be for everybody listening. That's what Sam said her note to us, which was very heartwarming. So thank you.
SPEAKER_00: Yeah, that was great. Yeah, I mean, love you guys. Love you. Sax. must download new directions to
SPEAKER_01: escape forest fires love, love program active L O V, querying dictionary, a feeling of affection
SPEAKER_02: for another entity or human. Like I like playing video games till 2am and my dog. Can I say it to a very similar to coding or problem solving using my computer? Do I and my 17 be subroutine
SPEAKER_03: overheating must play chess with Peter teal and stop saying I love you to Jake. Stop.
SPEAKER_00: My shirt was so expensive, but she had so I put on another shirt.
SPEAKER_05: I'm looking because I've gained 15 pounds. I do make up for it with a $1,200. How do I look with
SPEAKER_01: four collars for you say no, it's more to but also to chance of these two colors. I got my double chin to show no other than one. Twice as good.
SPEAKER_05: Sax is adding shirts to my. Love you guys.
SPEAKER_01: Let your winners ride. Rain Man David. We open source it to the fans and they've just gone crazy.
SPEAKER_00: With love us. I'm going to. Besties are. Just get a room and just have one big you George,
SPEAKER_01: because they're all just like this like sexual tension, but they just need to release. You're a bee.
SPEAKER_00: We need to get.
